Production Possibilities Curve Analysis
An economics worksheet for Grade 12 students covering the Production Possibilities Curve, opportunity cost, efficiency, and economic growth.
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Production Possibilities Curve Analysis
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Read each question carefully and provide thoughtful answers. Use the provided Production Possibilities Curve diagram to answer relevant questions.
The diagram below illustrates a Production Possibilities Curve (PPC) for an economy that produces two goods: Consumer Goods and Capital Goods.
1. What does point A on the PPC represent?
An inefficient allocation of resources.
An unattainable level of production.
An efficient allocation of resources.
Economic growth.
2. Moving from point B to point C on the PPC demonstrates:
Increased production of both goods.
A decrease in opportunity cost.
The concept of opportunity cost.
Technological advancement.
3. The Production Possibilities Curve illustrates the concept of scarcity by showing the amounts of goods and services that can be produced with a given amount of resources.
4. Points inside the PPC indicate that resources are being used .
5. An outward shift of the PPC signifies , which can be caused by advancements in technology or an increase in available resources.
6. Explain the law of increasing opportunity cost in the context of the PPC. How is this illustrated by the shape of a typical PPC?
7. Describe two factors that could cause the PPC to shift outward. Provide an example for each factor.
8. A point outside the Production Possibilities Curve is currently attainable with the economy's existing resources and technology.
True
False
9. Specialization and trade can allow an economy to consume beyond its current Production Possibilities Curve.
True
False
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