If a country is producing efficiently, it will produce __ its production possibilities curve. If...
Question:
If a country is producing efficiently, it will produce _____ its production possibilities curve.
If a country is producing inefficiently, it will produce _____ its production possibilities curve.
a. above; on
b. above; below
c. below; on
d. on; below
Production possibilities curve
Production possibilities are the various product combinations that can be possibly produced by the firm or economy with its available resources. The resources give two goods output and the firm can use its full capacity. These combinations are depicted by profit-maximizing full capacity utilization on this curve.
Answer and Explanation: 1
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d. on; below
If the firm is producing using its full production capacity with the least cost possible, then the firm is on its production...
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Production Possibilities Curve: Definition & Examples
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Chapter 11 / Lesson 28
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Understand what the production possibilities curve is, and learn how to construct and interpret a production possibilities curve along with the example.
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- In the production possibilities model of an economy, when there is full employment of resources A. a nation will be operating at an interior point within its production possibilities curve. B. a nation will be operating on the production possibilities c
- An increase in a country's technology would most likely: A. move the country further up its production possibilities curve. B. move the country to a point closer to its production possibilities curve C. shift its production possibilities curve to the righ
- When an economy is producing inside its production possibility frontier a. it is efficient so long as it is producing what people want. b. it must overcompensate by producing outside the curve to achieve efficiency. c. only technological advances will
- Production is inefficient A. only when an economy is producing inside its production possibility frontier (PPF). B. only when an economy is producing at the origin (0,0) on the PPF. C. Production is never inefficient. D. only when the economy is producing
- Suppose that a country is producing at a point inside its production possibilities frontier. Which of the following is true? (a) There will be a large opportunity cost if the country tries to increase its production of any good. (b) The country is produ
- A country that must decrease production of one good in order to increase the production of another A) Must be using resources inefficiently. B) Must be using resources efficiently. C) Must be producing inside its PPF. D) Must be producing outside its PPF
- Production is inefficient: a. Only when an economy is producing inside its production possibility frontier (PPF), b. Only when an economy is producing at the origin (0.0) on the PPF, c. Production Is never inefficient, d. Only when the economy is produ
- A war would most likely: a. Make the production possibilities curve flatter b. Shift the entire production possibilities curve outwards c. Shift both of the economic sectors' intercepts inwards d. Make the production possibilities curve steeper
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- In order for a country to increase its future economic growth, it must choose a point that is: a. below its production possibilities curve. b. further along on its production possibilities curve toward the capital goods axis. c. further along on its produ
- A nation is producing at a point inside of its production possibility curve. Which of the following is a possible explanation for this outcome? A. This nation has experienced a permanent decrease in its production capacity. B. This nation has experienced
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- Consider the production possibilities frontier for a country. Which points can be defined as efficient? a. all points that are on the production possibilities frontier b. all points that are feasible c. all points outside the frontier d. all points either
- 45. The production possibilities curve represents the set of all A). Feasible combinations of goods that the economy can produce given that a nation?s resources are fully employed B). factors of produ
- In autarky, a country will maximize its standard of living when: a. its production point is on the production possibilities frontier. b. its production point is inside the production possibilities frontier. c. its production point is outside the productio
- If there is an increase in labor productivity: a) the production possibilities curve would shift outward and the long-run aggregate supply curve would shift rightward. b) the production possibilities curve would shift inward and the long-run aggregate sup
- A production possibilities frontier with a bowed outward shape indicates: (a) the possibility of inefficient production (b) constant opportunity costs as more and more of one good is produced (c) increasing opportunity costs as more and more of one good i
- With trade, the production possibilities for two nations lie a. outside their consumption possibilities. b. inside their consumption possibilities. c. at a point equal to the world production possibilities curve. d. None of the answers above are corre
- The slope of a country's production possibility frontier is equal to __ and the optimal production point is located where the slope is equal to __. Assume that output of good Y is measured on the vertical axis, the output of good X is measured on the hori
- A production possibilities curve is negatively sloped because: a. Once on the frontier, it is only possible to increase production of one good by reducing production of the other b. The price of a goo
- A country possesses a comparative advantage in the production of a product if: a. The opportunity cost, in terms of the amount of the other products that it gives up to produce this product, is lower
- While producing on the production possibilities frontier, if additional units of a good could be produced at a constant opportunity cost, the production possibilities frontier would be: a. bowed outward b. bowed inward c. positively sloped d. a straight l
- On a production possibilities frontier, when is production efficient? a. If the production point is on the frontier. b. If the production point is outside the frontier. c. If the production point is on or inside the frontier. d. If the production point
- If an economy is producing efficiently and has chosen to produce and consume 12 units of X and 128 units of Y. At this point on the production possibilities frontier, one can use calculus to obtain the opportunity cost of Y as: A) -12 B) -6 C) 0 D)
- Allocative efficiency occurs: A. Anywhere inside or on the production possibilities frontier. B. When the total cost of production is minimized. C. At all points on the production possibilities frontier. D. At only one point on the production possibilitie
- Draw and explain the production possibilities curve, noting the point that are feasible, efficient, inefficient, not feasible, and possible movements of the curve.
- Using production possibilities concepts explain: 1. How allocative efficiency determines the optimal point on the production possibilities curve. 2. Attainable vs. Unattainable production 3. Full em
- In a production possibilities frontier, which of the following would describe the location of an efficient point of production? a) Just on the inside of the curve or line, b) On the inside of a curve, but not on the inside of a straight line, c) Just on t
- Any point inside the production possibilities curve is a(n): a. efficient point b. unfeasible point c. inefficient point d. maximum output combination
- Any point inside the production possibilities curve is a (an) a. efficient point. b. unfeasible point. c. inefficient point. d. maximum output combination.
- To achieve gains from trade, a country: a. needs to have an absolute advantage in the production of all goods. b. specializes in producing a good in which it has a lower opportunity cost. c. must produce at a point beyond its PPF. d. should produce at the
- With trade, the production possibilities for two nations lie a. outside their consumption possibilities. b. inside their consumption possibilities. c. at a point equal to the world production possibilities curve. d. None of the answers above are correct.
- As we move along the production possibilities frontier: a. more of both goods can be produced. b. the possibilities of tradeoffs diminish. c. a tradeoff is not possible because nations need all goods. d. the production of one good increases as the product
- If the resources within a nation are not being fully or efficiently utilized, it means: (a) that the nation is operating at a point along its production possibilities curve. (b) the government of that nation should seize ownership of the resources in orde
- On a production possibilities curve, a change from economic inefficiency to economic efficiency is obtained by: a. movement along the curve. b. movement from a point outside the curve to a point on the curve. c. movement from a point inside the curve to a
- On a production possibility frontier, opportunity cost is: a. independent of the slope of the curve. b.the decrease in the output of one good when the output of the other good is increased. c. the
- A production possibilities curve shows the various combinations of two outputs that: a. consumers would like to consume. b. producers would like to produce. c. an economy can produce. d. an economy should produce.
- Why is the shape of the production possibilities frontier (PPF) often curved instead of straight? a) Because the PPF is based on the productive capabilities of a nation overall rather than the produ
- If country A is the lowest opportunity cost producer of X and country B is the lowest opportunity cost producer of Y, what happens to their absolute and comparative advantages if country A suddenly becomes three times more productive at producing both X a
- Country X has a high unemployment rate. It follows that country X is operating a. beyond its production possibilities frontier (PPF) b. on its PPF c. inside(below) its PPF d. at a productive effi
- On a production possibilities curve, growth is represented by: a. a movement down the production possibilities curve. b. a movement up the production possibilities curve. c. an outward shift of the production possibilities curve. d. an inward shift of the
- Country X has a high unemployment rate. It follows that country X is operating: a. beyond its production possibilities frontier (PPF) b. on its PPF c. inside (below) its PPF d. at a productive efficient point
- If a producer has a comparative advantage in producing a good, a. they have an absolute advantage in the production of that good. b. they have the ability to produce that good at a lower opportunity cost than another producer. c. relative to other produce
- Any point inside a production possibilities curve gives what indication about the subject economy? a. That it is efficient b. That unemployment is decreasing c. That production levels are increasing d. That it is inefficient
- The producer that can produce a product with a lower opportunity cost: (x) has a comparative advantage in the production of that good. (y) may not have an absolute advantage in the production of that good. (z) should specialize in the production of that p
- All points on this production possibilities curve necessarily represent: a. society's optimal choice. b. less than full use of resources. c. unattainable levels of output. d. full employment. FIGURE 1.2 The production possibilities curve. Each point on th
- Along a production possibilities curve, an increase in the production of one good can be accomplished only by which of the following? a. decreasing the production of another good b. increasing the production of another good c. holding constant the product
- Economic growth can be pictured in a production possibilities curve diagram by: a. shifting the production possibilities curve out. b. moving from right to left along the curve. c. moving from left to right along the curve. d. shifting the production poss
- Country X has an output of 150 and factors of production that equals 2, while Country Y has an output of 50 and factors of production that equals 6, what is the ratio of productivity in Country X to Country Y? a. 10 b. 1 c. 9 d. 5
- You are told that the economy is producing efficiently and has chosen to produce and consume 1 unit of X and 39.6 units of Y. At this point on the production possibilities frontier, you can use calculus to obtain the opportunity cost of Y as.
- A point on the frontier of the production possibilities curve is: a. attainable and the economy is efficient. b. attainable, but the economy is inefficient. c. unattainable and the economy is ineffici
- A point outside the production possibilities curve is: A. unattainable without economic growth. B. attainable and the economy is efficient. C. unattainable without inflation. D. attainable, but the economy is inefficient.
- Which of the following is impossible? a. producing inside the production possibilities frontier b. producing on the production possibilities frontier c. producing outside the production possibilities frontier d. producing at the endpoints of the productio
- We can safely say that each point on a country's production possibilities boundary (PPB) is A) allocatively efficient. B) one at which P = MC for all goods. C) productively efficient. D) Pareto optimal. E) not productively efficient.
- The economically efficient input combination for producing a given level of output a. minimizes the average cost of producing the given level of output. b. occurs at the maximum value of the total product curve. c. can produce that level of output at the
- A nation's production possibilities curve is "bowed out" from the origin because a. resources are not perfectly adaptable to the production of alternative goods. b. capital goods and consumer goods utilize the same production technology. c. resources are
- You are told that the economy is producing efficiently and has chosen to produce and consume 2 units of X and 22.5 units of Y. At this point on the production possibilities frontier, you can use calculus to obtain the opportunity cost of X as: A) 1.4 B)
- You are told that the economy is producing efficiently and has chosen to produce and consume 6 units of X and 16 units of Y. At this point on the production possibilities frontier, you can use calculus to obtain the opportunity cost of X as: A) 2 B) 1/2
- Unemployment: A. causes the production possibilities curve to shift outward. B. can exist at any point on a production possibilities curve. C. is illustrated by a point outside the production possibilities curve. D. is illustrated by a point inside the pr
- When two countries decide to specialize and exchange, both countries will be able to consume: a. at a point on the production possibilities frontier, b. at a point outside the production possibilities frontier, c. at any point inside the production pos
- Increasing opportunity costs of producing goods imply that the production possibilities curve will be: a. downward sloping. b. upward sloping. c. bowed inward. d. bowed outward.
- Economic growth causes the: A. a production possibilities curve to shift rightward and the long-run aggregate supply curve to shift rightward. B. production possibilities curve to shift leftward and the long-run aggregate supply curve to shift leftward. C
- Will a production possibility curve expand outward more if the country prefers more consumer goods than capital goods, after 10 years?
- World output of goods and services increases with specialization because: A. the world's resources are used more efficiently. B. the production possibilities curve shifts outward for each country. C. the workers in each country work fewer hours per week.
- An output combination is technically efficient if: A) it is possible to produce more of all goods. B) it is possible to produce more of one good without producing less of another. C) it is not possible to produce more of one good without producing less of
- On a production possibilities curve, a change from economic inefficiency to economic efficiency is obtained by which of the following? a. movement along the curve b. movement from a point outside the curve to a point on the curve c. movement from a point
- The curve that shows different combinations of inputs that yield the same level of output is called _________. a) an Isoquant b) an Isocost curve c) a Production function d) a Production possibility curve
- If a firm is producing so that the point chosen along the production possibility frontier is socially preferred, then that firm is said to have reached its: a) minimum price efficiency. b) utility-maximizing efficiency. c) allocative efficiency. d) produc
- All points inside a production possibilities frontier are: A. possible and inefficient. B. possible. C. inefficient. D. efficient and possible.
- If the red curve is the production possibilities frontier (PPF) derived by the production function, then a) Any point that lies to the left of the PPF is unattainable. b) Any point that
- A production possibilities curve shows A. that people prefer one of the goods more than the other. B. that resources are unlimited. C. the maximum amounts of two goods that can be produced assuming the full and efficient use of available resources. D. com
- An individual or country that has a comparative advantage in the production of one good: a. must have an absolute advantage in the good's production. b. must not have an absolute advantage in the good's production. c. may or may not have an absolute advan
- A point outside (to the right of) the production possibilities frontier is: a. easily attainable. b. not attainable. c. efficient. d. inefficient.
- A point that lies inside the Production Possibilities Curve may be caused by _____.
- A point inside the production possibilities frontier is: a. feasible but not efficient. b. efficient but not feasible. c. both efficient and feasible. d. neither efficient nor feasible.
- Points located within the production possibilities frontiers is best described as: a. Efficient. b. Unattainable. c. Attainable. d. Possible.
- What is the Production Possibilities Curve? Give a personal example of a production possibilities curve.
- Production possibilities curves reflect: A. Constant opportunity costs if technology is held constant, no matter what skills the factors of production have. B. Maximum efficiency in the production of all outputs, given that technology does not change. C.
- To achieve gains from trade, a country: A. should produce at the midpoint of its PPF. B. specializes in the producing a good in which it has a lower opportunity cost. C. must produce at a point beyond its PPF. D. needs to have an absolute advantage in the
- In the specific factors model, a country's production possibility frontier is __ because of __. A) a straight line; diminishing marginal returns B) a curved line; diminishing marginal returns C) a straight line; constant marginal returns D) a curved
- When it can produce a product at a smaller opportunity cost. A country is said to have: a. comparative advantage, b. allocative efficiency, c. productive efficiency, d. absolute advantage.
- (a) Explain the difference between consumption possibilities and production possibilities. (b) How is it possible for a country to consume a greater quantity of goods and services than it is actually capable of producing?
- In order for Ethiopia to increase its future economic growth, it must choose a point that is: a. below its production possibilities curve. b. further along on its production possibilities curve toward the capital goods axis. c. further along on its produc
- 1. A production possibilities frontier can shift outward if a. resources are shifted from the production of one good to the production of the other good. b. the economy abandons inefficient producti
- Which of the following is not true about a production possibilities curve? The curve: a. indicates the combinations of goods and services that can be produced with a given technology. b. indicates the efficient production points. c. indicates the none
- Given production possibilities frontier (a), point N suggests that The economy is: a. attaining full employment but not efficient production. b. attaining efficient production but not full employment. c. using its available resources inefficiently. d. att
- Shifting the production possibilities curve An outward shift of an economy's production possibilities curve is caused by a. entrepreneurship. b. an increase in labor. c. an advance in technology. d. all of the above.
- What is a curve representing the maximum possible combinations of total output that could be produced assuming a fixed amount of resources of a given quality: a. The Production Possibilities Curve, b. Market Demand Curve, c. The Land and Labor Efficiency
- When an economy produces on its PPF: a. it is producing the maximum amount it will ever be able to produce b. it is producing efficiently c. it is using up all of its resources in production d. it cannot gain from trade e. all of the above
- Why is a point below the production possibilities curve less efficient than a point on that curve?
- A point or combination that is on the production possibilities frontier is a) attainable and efficient. b) attainable but not efficient. c) unattainable and efficient. d) unattainable, but not eff
- With an example, use a production possibility frontier as a straight line, assume that the country has two factors of production, L and K. The payments to the factors are what?
- Over a period of time during which a country's production possibilities have been increasing, for the given aggregate demand curve, the result will be: a. lower real output and a higher price level. b. lower real output and a lower price level. c. higher
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