ECON 2100 Name________________________________
Practice Set 1
True/False
___ 1. A production possibilities frontier (PPF) is a curve showing all combinations of 2
goods that can be produced with the resources and technology currently available.
___ 2. Productive efficiency occurs when you are getting as much output from as few
inputs as possible.
___ 3. A curved PPF exhibits constant opportunity costs.
Multiple Choice
____4. Economics is the study of
a. The production of commodities.
b. How human beings develop institutions to distribute limited resources.
c. Choice under conditions of scarcity.
d. How government policies solve the three economic allocation problems.
___ 5. The following is an example of a positive statement:
a. Mary is an excellent teacher.
b. Profits weren’t large enough this year.
c. The value of Microsoft’s stock should increase this quarter.
d. Exports to the US have risen since last January.
Short Answer
6. What is scarcity?
7. How does microeconomics differ from macroeconomics?
8. List the 4 types of resources discussed in class.
1. 3.
2. 4.
9. Graphically depict what occurs to a PPF due to capital accumulation (investment).
