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2.4   Economic Growth, Production Possibilities, and the Trade-Off Between Present and Future

 

1) In order for an economy to increase its production possibilities, the economy must

A) be very efficient.

B) increase inputs.

C) increase its wants.

D) reduce output.

 

2) The discovery of new natural resources will cause

A) the economy to move closer to the production possibilities curve.

B) the production possibilities curve to shift up and to the right.

C) an upward movement along the curve.

D) the curve to shift back and to the left.

 

3) The production possibilities curve can shift inward when

A) production increases.

B) employment increases.

C) the stock of productive capital rises.

D) a country experiences a natural disaster.

 

4) Refer to the above figure. Which of the following would allow society to move to point d?

A) producing efficiently

B) concentrating production in wheat

C) increasing the quantity of labor

D) using the best land to produce wheat and the lower quality land to produce beans

 

5) Economic growth can be pictured in a production possibilities curve diagram by

A) making the production possibilities curve more bowed out.

B) making the production possibilities curve less bowed out.

C) shifting the production possibilities curve out.

D) shifting the production possibilities curve in.

 

6) All of the following would cause the production possibilities curve to shift outward EXCEPT

A) an improvement in technology.

B) an increase in the amount of labor available.

C) a decline in the unemployment rate.

D) an increase in the level of capital stock.

7) How is economic growth shown by the production possibilities curve?

A) by shifting the curve to the right

B) by moving the curve to the left

C) by moving up the existing curve

D) by changing the shape of the curve from a straight line to one that is bowed

 

8) The production possibilities curve shifts outward when

A) the law of increasing additional cost takes hold.

B) the economy is producing efficiently.

C) we produce more consumption goods over productive investment in equipment.

D) there is an increase in resources or technology.

 

9) Economic growth can be pictured in a production possibilities curve diagram by

A) shifting the production possibilities curve in.

B) shifting the production possibilities curve out.

C) making the production possibilities curve straighter.

D) moving from a point inside the production possibilities curve to a point on the curve.

 

10) The only way that a society can produce outside the production possibilities curve is

A) through economic growth.

B) by producing efficiently.

C) by obeying the Law of Increasing Additional Cost.

D) to use the concept of opportunity cost.

 

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