Production Possibilities Curve Worksheet
Explore the concepts of scarcity, trade-offs, opportunity cost, and efficiency using the Production Possibilities Curve.
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Production Possibilities Curve Worksheet
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Read each question carefully and answer to the best of your ability. Refer to the Production Possibilities Curve (PPC) diagram to answer specific questions.
1. Which of the following best describes the concept of scarcity?
Unlimited resources and limited wants.
Limited resources and unlimited wants.
Equal amounts of resources and wants.
The ability to produce everything desired.
2. A point located inside the Production Possibilities Curve indicates:
Economic growth.
Inefficient use of resources.
An unattainable level of production.
Full employment of resources.
3. The Production Possibilities Curve illustrates the concept of and .
4. Moving from one point to another on the PPC demonstrates a , meaning that to produce more of one good, less of another must be produced.
5. The cost is the value of the next best alternative that must be given up to obtain something else.
6. Using the PPC diagram above, explain what point D represents in terms of efficiency and resource utilization.
7. What factors could cause the PPC to shift outward, as shown by the dashed line in the diagram above?
8. The law of increasing opportunity costs states that as production of a good increases, the opportunity cost of producing an additional unit of that good decreases.
True
False
Match each term on the left with its definition on the right.
9. Scarcity
a. The value of the next best alternative given up.
10. Opportunity Cost
b. Society's wants are unlimited, but resources are limited.
11. Efficiency
c. Using all resources to their fullest potential.