Name:

_______________________________

Period: _________________________

Lesson 1.3 Review

Production Possibilities Curves
Multiple Choice

1.

Based on this table, each time this country moves more resources away from producing
shoes towards growing watermelons,
a. the cost of growing additional watermelons decreases.
b. the cost of growing additional watermelons increases.
c. the cost of growing additional watermelons remains the same.
d. the cost of growing additional watermelons is not affected.

2. Which of the following causes a production possibilities frontier to shift to the right?
a. The economy grows.
b. The economy shrinks.
c. The economy stagnates.
d. The economy destabilizes.

3. A point on a production possibilities frontier represents

a. a point at which an economy is using all resources most productively.
b. a point at which a nation is producing only one good or service.
c. a point of economic growth.
d. a point at which the economy is being underutilized.

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 Name:
_______________________________

Period: _________________________

4.

Look at the figure above, showing production possibilities for watermelons

and shoes. What keeps Capeland from producing 21 million tons of
watermelons each year as well as 15 million pairs of shoes?

5. Many countries produce a single good upon which much of their economy
depends. That good might be coffee or wool or oil. How might a production
possibilities curve help economists in such a country determine how to
diversify their economy?

6. An inventor found a new way to produce more steel from each ton of her
country's iron ore. How would a production possibilities curve reflect the
application of that discovery to the country's production of steel cookware?
Why?

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 Name:
_______________________________

Period: _________________________

7. The leader of Capeland gave all workers a month-long vacation from work to
celebrate a national holiday. Would this show up on the production
possibilities curve as underutilization or as a shift of the production
possibilities frontier to the left? Explain.

8. If a country chose to produce twice as many wooden chairs as before, how

would that affect its production of wooden tables? How would the law of
increasing costs apply to the chairs?

9. Capeland's workers made shoes by hand. This year, Capeland Shoe

Company bought 100 computerized shoe-sewing machines. At the same
time, the government funded a shoe-making course at Capeland Community
College. Why did it make economic sense for the government to fund the
course?

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 Name:
_______________________________

Period: _________________________