Understanding the Production Possibility Frontier

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1.

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The production possibility frontier demonstrates which of the following economic concepts?
 Scarcity
 Supply and demand
 Opportunity cost
 Economic efficiency
 Circular flow

2.

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Why is the production possibility frontier convex, (bows outward)?
Economies must operate near capacity to be meet their citizen’s needs.
Manufacturers use the resources that are the most beneficial first.
There are really more than two goods in any economy.
None of the above

3.

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High unemployment means that the economy is operating:
On the production possibility frontier
Inside the production possibility frontier
Outside of the production possibility frontier
On the origin of the production possibility frontier

4.

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Which of the following are ways that economic growth pushes the production possibility frontier outward?
 Improvements in technology
 Workers have more skill
 More machines and capital
 Immigration

5.

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What makes it so difficult to put more resources into our homeland security?
Resources would be taken away from the private sector.
Investing in homeland security would push out the production possibility frontier.
The country operates inside the frontier when increasing the size of homeland security.
All of the above are true.
None of the above are true.