ECON 2030 – 136 well gathered 2026 update SAMPLE TEST QUESTIONS - PRODUCTION POSSIBILITY MODEL Louisiana State University

ECON 2030 – 136 well gathered 2026 update SAMPLE TEST QUESTIONS -
PRODUCTION POSSIBILITY MODEL Louisiana State University


1
Productive efficiency is not achieved at any point inside the production possibility curve.
True

2
If the principle of increasing marginal opportunity cost holds, the opportunity cost of producing
each additional unit of a good should fall as production of that good rises.
False

3
Which of the following cannot be determined by using a production possibility table?

A) What combination of outputs can be produced?
B) How much less of one output must be produced if more of another output is produced?
C) What combination of outputs is best?
D) How much output can be produced from a given level of inputs?
What combination of outputs is best?

4
Production possibility curves are upward-sloping because increased production of one good
implies reduced production of another good.
False

5
With the resources available, you can make the combinations of Ums and Umies (trinkets
from a place called Bandarban)shown in the table. The opportunity cost of producing 60
Umies instead of 30 Umies is:
Number af Ums Number af Umies 60040302060090 Number af Ums 6040200
Number af Umies 0306090
A) 10 Ums
B) 20 Ums
C) 30 Ums
D) 40 Ums
20 Ums

6
Investment in capital goods is one way to increase the standard of living in the future.
Investment in capital goods, however, means that we must forgo consumption today. One
of the trade-offs facing an economy is the balance of consumption today with that of the
future. The following table shows such a trade-off. With this information we know that the
opportunity cost of which of the following is the greatest?

,Current consumptinn Future conguptinn 800100750260650340600380550400
Current consumptinn 800750650600550 Future conguptinn 100260340380400
A) Increasing current consumption from 750 to 800
B)Increasing current consumption from 650 to 750
C)Increasing current consumption from 600 to 650
D)Increasing current consumption from 550 to 600
Increasing current consumption from 750 to 800

7
The production possibility model can be used to demonstrate the concept of opportunity cost.
True

8
The law of one price means that prices eventually will be the same in all countries and eventually
countries will not have a reason to trade.
False

9
Refer to the graph below.




Laura's
production possibility curve for math and economics problems in one night is shown in the
graph. Her opportunity cost of finishing six math problems instead of four math problems
is:

A) one economics problem.
B) two economics problems.

,C) three economics problems.
D) four economics problems.
one economics problem.

10
An economy that operates inside its production possibility curve is less efficient than it would be
if it were operating on its production possibility curve.
True

11
Evan can grow both roses and carnations in his garden. His production possibility table is
shown below. If he is currently producing 110 roses, his opportunity cost of producing 40
more roses is:
Number d roses Number of carnatims 015560135110109150781800 Number d
roses 060110150180 Number of carnatims 155135109780
A) 20 carnations
B) 26 carnations
C) 31 carnations
D) 78 carnations
31 carnations

12
If a country has a comparative advantage in the production of a good, its resources are better
suited to the production of that good than are the resources of other countries.
True

13
The production possibility table below is for growing broccoli and asparagus in a 320-
square-foot garden in one season.
Praductinn Passibility Braccoli Asparapus 30020181026030 Praductinn Passib
ility Braccoli 3020100 Asparapus 0182630

, Which curve on
the graph on the right corresponds to this table?

A) I
B)II
C)III
D)IV
IV

14