Production Possibilities Curve Quick Check

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Suppose an economy experiences an increase in unemployment across all industries. What is the result of this increase in unemployment on the production possibilities curve?

The curve would shift inward because labor is considered a factor of production. By reducing productive resources, the maximum level of production will decrease.

Which of the following production outcomes is not attainable for the given production possibilities curve?

15 tables and 15 benches

What happens when production is inside the production possibilities curve?

The production is not maximized, so some resources are unused.

What does the slope of the production possibilities curve represent?

The slope represents the opportunity cost of producing one good instead of the other.

A shift inward of the production possibilities curve signifies that ___________.

the available production resources have decreased, so potential production levels will decrease


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