What is likely to occur as a result of a permanent rise in unemployment resulting in loss of skills?

The diagram illustrates the production possibility curve of an economy in Year 1 (X₁Y₁) and in Year 2 (X₂Y₂). What can be concluded from the diagram?

A country was at point P on its production possibility curve. Following the threat of invasion, it prepared for war. The war then reduced the country's infrastructure. What are the most likely changes on the production possibility curve diagram that are consistent with these events?

Which is a normative statement?

Meera has just finished a course at art college and has decided to set up a business on her own producing clay figures of famous people. Which factors of production is she likely to have to purchase from other businesses?

Which combination of events must increase the level of scarcity in an economy?

Some people are shipwrecked on a tropical island and allocate their time between gathering coconuts and fishing. Each individual is equally productive in collecting coconuts or catching fish. Which diagram represents the production possibility curve of this community?

The diagram shows the production possibility curve of a desert island economy where the inhabitants live off just two commodities, coconuts and fish. What explains the shape of the production possibility curve?

In 2013, there was much criticism of a government project to build a new high-speed rail link between two cities. What is the most likely reason for abandoning such a project?

What is the fundamental assumption of the economic problem?

The diagram shows the change in a country's production possibility curve from PQ to PR. What increases as a result of the change from PQ to PR?

The diagram shows a production possibility curve for an economy. Assuming that the production possibility curve remains unchanged, what is the most likely reason for the movement from point X to point Y?

The diagram shows a production possibility curve for an economy that produces only two goods, X and Y. The economy produces 800 of good Y and produces on its production possibility curve. Which quantity of good X is given up?

In the diagram, GH is an economy's initial production possibility curve. What could cause the curve to shift to JK?

Unemployment among young people in Spain was 56.1% in June 2013. Youth unemployment in Spain should be reduced. Which combination correctly describes these two statements?

Which question does not directly refer to the basic economic problem?

The diagram shows the change in an economy's production possibility curve as it grows in the long run. Which movement from point X is most likely to show the highest potential for growth?

The diagrams show the change in a country's production possibility curve between Year 1 and Year 2. What can be concluded from the diagrams?

An individual has an appointment with his bank manager. He has a choice between travelling to the appointment by car, or leaving the car at home and travelling by bus and then by train. The costs of the journey are given below.

Given this information, what is the opportunity cost to the individual of travelling by car rather than by bus and train?

What confirms that scarcity exists?

A driver makes the following estimates in considering the purchase of a car which she intends to use only when she would otherwise have used public transport.

What will be the opportunity cost in monetary terms to the driver over the year of travelling by car rather than by public transport?

The diagram shows the production possibility curves of two economies, X and Y. Which statement about the two economies is correct?

In 2007 there was a worldwide shortage of oil. The diagram shows the consumption and production of oil (billion tonnes) in 2007 for selected countries. What can be concluded from the diagram?

The diagram shows different production possibilities for a bakery. They wish to increase production of cakes from 15 units to 25 units. What is the opportunity cost?

The curve PP in the diagram is the production possibility curve for a country producing goods X and Y. The production of X is more labour-intensive than the production of Y. The working hours of the labour force are reduced by law. Which curve could be the country's new production possibility curve?

The production possibility curve for an economy producing capital goods and consumer goods is represented by the line PQ. What is the opportunity cost of producing OS of consumer goods?

An economy can produce only two goods at any one time. These are good X and one other good from A, B, C or D. The table shows the outputs of goods A, B, C and D with each output of good X when the economy's resources are fully employed. Which good must be produced with good X to show a production possibility curve with increasing costs?

The diagram shows a production possibility curve for an economy that is producing at point P. Which quantity of X is given up to produce the quantity of Y shown?

The diagram shows that the production possibility frontier of maize and beans has changed from PPF1 to PPF2. What has happened to the opportunity cost of maize and the returns to factors producing beans?

Line XX is the production possibility curve (PPC) of a worker picking peas and beans in a 10-hour working day. What would cause the worker's PPC to shift to the line YY?

What is an example of the use of ceteris paribus?

Economy X uses its resources in the labour-intensive production of wheat and wooden furniture as shown by the production possibility curve FW. With the help of new strains of wheat seeds, X increased yields and shifted to a new production possibility curve. Which diagram depicts this change?

R1S1, R2S2, R3S3 and R4S4 are production possibility curves (PPC) for four different countries 1, 2, 3 and 4. Which statement about the opportunity cost of good R in terms of good S is not correct?

A farmer is able to grow three crops, X, Y and Z, on his land. The farmer decides to grow at most two crops in any year. The table shows six possible combinations of units of output of the three crops. What is the opportunity cost of 1 unit of X?

What is not an example of the role of the factor enterprise in a modern economy?

The production possibility curves show the abilities of four economies to produce trucks and cars. In which economy is the opportunity cost of producing cars lowest?

YX is an economy's production possibility curve (PPC). The equation of the curve is q_Y = 1000 − 2q_x. What is the opportunity cost of producing one extra unit of good X?

A farmer picks 10 kg of strawberries in each hour. The farmer is twice as productive at picking raspberries. Which diagram shows the farmer's daily production possibility curve when working 8 hours a day?

XY is the production possibility curve (PPC) of a firm that produces desks and chairs. What are the opportunity costs of the 4th and 5th desks produced by the firm?

A government proposes to introduce a road congestion charge which would require private motorists to pay a toll for road use. Which statement relating to the proposal is normative?

The diagram shows an economy's production possibility curve for goods X and Y. What is the opportunity cost of moving from point R to point S on the production possibility curve?

The combinations of output of goods X and Y shown in the table could all be produced using the existing resources in a country to their maximum capacity. Which statement about the opportunity cost of good Y in terms of good X is correct?

The diagram shows a production possibility curve for a farmer. The original position is X. If the farmer switches some of his land from producing pears to producing apples, which point represents his new position?

A student buys a flute for $80 but then is unable to learn to play it. It has a resale value of $50, while the shop retail price of the same type of flute has risen to $95. What is the present opportunity cost to the student of keeping the flute?

The fundamental economic question is how to meet unlimited wants with limited resources. What is an example of limited resources?

The diagram shows a production possibility curve (PPC). It indicates the combinations of consumer goods and capital goods produced by an economy using all its available resources. What does position X indicate?

What would be a determinant of a country's production possibility curve boundary?

Which statement is correct?

What is correct at any point along an economy's production possibility curve?

Which labels might be used on a production possibility curve diagram?

A worker earns $40 per hour. Rather than work, she decides to visit a museum for three hours. The visit costs a total of $40. What is the opportunity cost of visiting the museum?

Which statement is normative?

An economist knows the current point at which an economy is operating within its production possibility curve. What can the economist judge from this knowledge about the economy?

The diagram shows an economy's production possibility curve. It has been employing its resources in the ratio of 80% consumer goods production and 20% capital goods production. What will be the result if it decides to double its output of capital goods?

The diagram shows a production possibility curve. What can be deduced from the shape of this curve?

An economy is operating at a point inside its production possibility curve. Why is this described as inefficient?

An American family is choosing between four holiday destinations in Europe, each at the same price. The table shows the family's order of preference for these holiday destinations.

If the family goes to Barcelona, what is the opportunity cost of this choice?

The diagram shows two production possibility curves for an economy. Which combination of movements correctly illustrates these changes in production?

A European airline opens a new route to Dubai. It purchases additional aeroplanes, rents additional landing slots, hires pilots and buys back some of its shares to raise the value of the firm on the stock market. What is an example of the factor of production capital?

In the diagram JK is the initial production possibility curve for an economy producing computers and cars. What could cause the curve to shift to JL?

A production possibility curve shows the combinations of outputs an economy can produce using all available resources. At which points on the diagram are all available resources used?

The Indian government operates a pension scheme. Which statement about this scheme would be classed as normative?

A doctor has very long working hours and a high level of stress. She can become a teacher instead of continuing as a doctor. What is the opportunity cost of choosing to continue as a doctor?

The diagram shows an economy's production possibility curve (PPC). The economy has moved from X to Y. What can be deduced from the diagram?

The table states the consequences of two macroeconomic policies. What correctly identifies whether the statements are normative or positive?

The diagram shows the production possibility curve for wheat and corn. What can be deduced from the diagram?

A hospital management board decides to reallocate $800 000 from its $1.2m new buildings budget to spend on cancer care. What is the opportunity cost of this decision?

The diagram shows the change in a country's production possibility curve from XX to YY. What would explain this change?

Country Z operates with a production possibility curve (PPC). Currently, output is at combination 1. Which movement has zero opportunity cost in terms of the goods produced?

PPC is the production possibility curve in country T. Which changes take place in country T's opportunity costs of producing X as it increases production of X?

The table shows different combinations of rings and bracelets that can be produced by Luke and Zoe in the same time period. Which statement is not correct?