AP Microeconomics : Production Possibilities Curve Quiz

*Theme/Title: Production Possibilities Curve
* Description/Instructions
An important model in AP Microeconomics is the Production Possibilities Curve or PPC. This curve shows the relative opportunity cost of choice, specialization, and how trading can allow a country to live above its scarce resources. A country has an absolute advantage when it can produce more compared to its trading partner. A country has the comparative advantage when it can produce a product at a lower opportunity costs. Inherent in the use of a PPC is the fact that all resources are fixed and that any point along the PPC is efficient. Points outside the curve are considered to be "unattainable" and points inside the curve are considered to be "inefficient." A PPC can be a straight line or have a constant opportunity cost or bowed out having an increasing opportunity cost.

Figure 1 – PPF Schedule for Botswana and Haiti

Group: AP Microeconomics AP Microeconomics Quizzes
Topic: AP Microeconomics

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