When all these points of different combinations of production of the two goods are joined, they form a Production Possibility Curve. 89. e. inside the curve. In this video, Sal explains how the production possibilities curve model can be used to illustrate changes in a country's actual and potential level of output. Q. Any point inside the production possibilities curve is a (an) a. efficient point. b. at the top corner of the curve. During World War II, what was an opportunity cost of the decision to increase production of military goods? Find the combination of 2,000 WMD and 40,000 pounds of Food. possibilities curve. Using a production possibilities curve, unemployment is represented by a point located a. near the middle of the curve. c. at the bottom corner of the curve. Tags: Question 3 . 1. Label this point D. Show that it is inefficient by When it is at full employment, it operates on the PPC. Tags: Question 5 . If an economy is producing at a point inside a production possibilities curve: A. the economy is efficient. Label a point F inside the curve. B. productivity has increased. A production possibilities curve … C. productivity has declined. Concepts covered include efficiency, inefficiency, economic growth and contraction, and recession. d. maximum output combination. Inside the curve. d. outside the curve. A point beneath the curve indicates inefficiency, and a point beyond the curve indicates impossibility. Opportunity costs are constant. Why is the point unattainable. b. unfeasible point. Low on the curve. D. society has chosen a different set of outputs. 2. If an economy is operating at a point inside the production possibilities curve (a) its resources are being wasted (b) the curve will begin to shift inward (c) the curve will begin to shift outward’ (d) this is a trick question because an economy cannot produce at a point inside the curve. Does this production possibilities curve reflect the law of increasing oppurtunity costs? A movement along the production possibilities curve would imply that: A. the labor force has grown. 7. Explain. An output combination that is unobtainable with the current. the shape of the production possibilities curve illustrates the law of increasing cost. A point inside a production possibilities curve indicates Resources are not being used efficiently. Operation of the Economy on the PPC. 30 seconds . A point inside of the production possibilities curve is inefficient because it is possible to produce more of one or both goods without opportunity cost. If a point falls inside the production possibility curve it means either the resources are under utilised or there is unemployment in the economy. !--Humor). 9. The PPC shows the maximum available possibilities which an economy can produce. This curve represents a mere production possibility between a durable and a consumer good, FMCG--fast moving consumer good. Resources are being used very efficiently. SURVEY . c. inefficient point. Why are points A through E all efficient points? SURVEY . At the given points, it is necessary to go through the curve in determining the answers for your question (and this means that you have to do your ground work on curves!! Why is this an inefficient point? 88. When an economy is in a recession, it is operating inside the PPC. Outside the curve. ANS: c. While operating within the boundaries of the production possibilities curve, more of both goods can be attained if efficiency is improved. Opportunity cost is The point on the PPC where the economy operates depends on how well the resources are utilised. Lable a point G outside the curve. 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