13) How does an economy represented by a straight line production possibilities curve differ from
one represented by a traditional production possibilities curve with a bowed shape?
A) In the economy represented by a straight line production possibilities curve, there is no
opportunity cost.
B) In the economy represented by a straight line production possibilities curve, neither good
is scarce.
C) In the economy represented by a straight line production possibilities curve, the law of
increasing relative cost does not apply.
D) In the economy represented by a straight line production possibilities curve, changing the
amount of resources devoted to the production of each good will not alter the amount of
each good actually produced.
14) Look at the following production possibilities table for drill presses and corn. The table shows
the maximum combination of drill presses and bushels of corn that can be produced, when all
resources are fully employed.
Production Possibilities
Good A B C D E
Drill Presses 10 20 30 40 50
Corn (bushels) 150 140 120 90 50
Based on the above information,
A) there is a constant trade off between corn and drill presses.
B) the opportunity cost of producing 30 instead of 20 drill presses is 120 bushels of corn.
C) the opportunity cost of producing 40 instead of 30 drill presses is 30 bushels of corn.
D) the production possibilities curve for drill presses and corn will be a straight line.
15) A bowed Production Possibilities Curve (PPC) indicates
A) inefficient production.
B) that the trade off between the 2 goods is not constant.
C) changing technology.
D) only 1 good is always being produced.