# Macroeconomics - Production Possibilites Curve Problem Set

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1. Based on the graph below, which point for 2006 will lead to the largest increase in the PPC for 2007 and later years? J
2. Based on the graph below, what is the opportunity cost of moving from point C to point D? Zero
3. Which point on the 2006 PPC would be best for this economy? This PPC does not indicate which points are better or worse than other points.
4. Based on the graph below, how much would cell phone production decrease if DVD production was increased from 20 at point B to 65 at point D? 25
5. Based on the graph below, what is the opportunity cost of moving from point B to point D? 25 units of corn
6. Based on the graph below, what is the opportunity cost of moving from point C to point B? zero
7. Production at a point lying inside a production possibilities curve is
possible but not efficient
8. What is the opportunity cost of moving from point E to point D? 15 million DVDs
9. Production at a point lying outside a production possibilities curve is
not possible
10. Based on the graph below, how much wheat is produced at point B? 55
11. If we are producing at point D, which of the following would be true? It is not possible to increase the output of wheat.
It is not possible to increase the output of corn.
It is not possible to increase the output of corn and wheat simultaneously.
It is not possible to decrease the output of wheat.
It is not possible to decrease the output of corn.
It is not possible to increase the output of corn and wheat simultaneously.
12. Based on the graph below, which point for 2006 will lead to the smallest increase in the PPC for 2007 and later years? M
13. True or False, if false, explain why: An increase in prices across a nation will lead to an increase in that
nation's PPC.
False. Higher prices do not lead to an increase in productive capacity. Factors that could increase the PPC include a larger labor force, improved technology, greater access to natural resources, an increase in the number of capital goods, and increased productivity of resources.
14. In the graph below, which point is inefficient? C
15. Based on the graph below, what is the opportunity cost of moving from
point D to point A? 82 units of wheat
16. Production at a point lying on the production possibilities curve is
both possible and efficient.
17. In the graph below which point is best for the economy? This graph does not indicate which points are better or worse than others.
18. In the graph below, what quantity of each good is produced at point B? 11 million computers and 9 million pairs of jeans
19. A point lying inside the production possibilities curve is
possible but not efficient.
20. Which of the following points would lead to the largest growth in the PPC for the following year? A
21. If we move from point D to point E on the graph, what is the opportunity cost? 8 million computers
22. In the graph below, what quantity of each good is produced at point D? 8 million computers and 11 million pairs of jeans
23. Which of the following points would lead to the least growth in the PPC for the following year? D
24. A point lying outside the production possibilities curve is
not possible
25. If we move from point C to point D on the graph, what is the opportunity cost? Zero
 Author: OGodHowGreatThouArt ID: 15409 Card Set: Macroeconomics - Production Possibilites Curve Problem Set Updated: 2010-04-21 00:08:13 Tags: Production Possibilites Curve Problem Set Folders: Description: Production Possibilites Curve Problem Set Show Answers: