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6. A production possibility curve (PPC) shows...

  • Options 1 and 3
  • The opportuity cost of changing quanty produced
  • The maximum output of one product
  • The maximum output of 2 products at different combinations

7. A shift outward of the PPC could be caused by...

  • Discovery of more raw materials
  • All of the above
  • A rise in price of a substitute.
  • A change in consumer tastes and preferences

8. Specialisation has the risk that...

  • Finite resources such as oil or copper may run out.
  • All of the above.
  • Change in consumer tastes and preferences.
  • De-Industrialisation when alternatives such as imports become cheaper.

9. Demand is...

  • The quatity of a product that consumers are willing and able to purchase at different prices over a period of time.
  • How much people buy
  • The relationship between price and quantity
  • The extra costs above those actually paid by the consumer

10. A point inside a production possibility curve (PPC) represents...

  • An efficient allocation of recources
  • Could be any of the above
  • A inefficient allocation of resources
  • An impossible level of production that cannot be achieved unless there is a rise in technology or amount of raw materials