Question

1. A production possibility frontier is made up from all of the combinations of two goods or services that can be efficiently produced with the currently available resources and technology.

True or False

2. The PPF is curved (bowed) outward from the origin because resources are limited.

True or False

3. The slope of the PPF (in absolute value) shows the opportunity cost as production is switched from one good or service to another.

True or False

4. One can calculate the opportunity cost of an action by adding together all of the alternatives forgone when making a decision or choosing a course of action

True or False

5. Price floors are designed to “protect” the sellers of a particular good or service.

True or False

Answer 1

TRUE ( PPF shows resource constraint , choice , scarcity , ooportunity cost and efficieny of production )

FALSE ( The shape of a PPF is usually drawn as concave to the origin to represent increasing opportunity cost with increased output of a good.)

TRUE ( The slope is called  is called the marginal rate of transformation (MRT). )

FALSE (  It is expressed as the relative cost of one alternative in terms of the next-best alternative. , relative between two options )

TRUE ( Price floors prevent the price from falling to equilibrium or market price which is very low in some cases )