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WS-1 AS Eco Opportunity Cost

The document is an educational resource for Economics AS Level students, focusing on Opportunity Cost, Production Possibility Curve (PPC), and Production Possibility Frontier (PPF). It includes multiple-choice questions, true or false statements, and short answer questions designed to assess students' understanding of these economic concepts. The content is structured to facilitate learning and evaluation of key economic principles.

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Ahmad Farooq
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14 views7 pages

WS-1 AS Eco Opportunity Cost

The document is an educational resource for Economics AS Level students, focusing on Opportunity Cost, Production Possibility Curve (PPC), and Production Possibility Frontier (PPF). It includes multiple-choice questions, true or false statements, and short answer questions designed to assess students' understanding of these economic concepts. The content is structured to facilitate learning and evaluation of key economic principles.

Uploaded by

Ahmad Farooq
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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PEACE Insttitute of Virtual Education and Learning Solutions

Subject: Economics AS

Topic: Opportunity Cost / Production Possibility Curve (PPC) / Production Possibility Frontier (PPF)
Grade Level: 11 / AS Level

Part A: Multiple Choice Questions (MCQs)

Choose the correct answer.


1. What does the Production Possibility Curve (PPC) represent?
a) Market demand
b) Inflation rate
c) Opportunity cost
d) Consumer satisfaction

2. A movement along the PPC indicates:


a) Economic growth
b) A change in opportunity cost
c) Efficient resource allocation
d) Unemployment

3. When a PPC is concave to the origin, it shows:


a) Constant opportunity cost
b) Increasing opportunity cost
c) Decreasing opportunity cost
d) Zero opportunity cost

4. If an economy is operating inside the PPC, it means:


a) It is operating efficiently
b) Resources are fully employed
c) There is unemployment or inefficiency
d) There is economic growth

5. Which of the following would cause an outward shift of the PPC?


a) Higher taxes
b) Natural disasters
c) Technological improvement
d) Increase in imports

6. Opportunity cost can best be described as:


a) The total money spent
b) The next best alternative foregone
c) The total benefit received
d) The least expensive option
PEACE Insttitute of Virtual Education and Learning Solutions

Subject: Economics AS

7. If the PPC shifts inward, it indicates:


a) Economic growth
b) An increase in resources
c) A loss of resources or capacity
d) No change in opportunity cost

8. A straight-line PPC shows:


a) Constant opportunity cost
b) Increasing opportunity cost
c) Decreasing opportunity cost
d) No opportunity cost

9. Which of the following is NOT a reason for the shape of a PPC?


a) Resource specialization
b) Law of increasing opportunity cost
c) Resource limitations
d) Unlimited wants

10. Which of these would NOT be represented on a PPC?


a) Trade-offs
b) Opportunity cost
c) Allocative efficiency
d) Price level

Part B: True or False

1. The PPC shows the maximum possible combinations of two goods that can be produced using all
resources efficiently. [ True / False ]
2. Opportunity cost is the same as the total cost of production. [ True / False ]
3. A shift of the PPC to the right represents economic growth. [ True / False ]
4. All points on the PPC show inefficient use of resources. [ True / False ]
5. Technological advancements can shift the PPC outward. [ True / False ]
6. A point outside the PPC is currently unattainable with existing resources. [ True / False ]
7. The PPC does not apply to service-based economies. [ True / False ]
8. A bowed-outward PPC shows increasing opportunity costs. [ True / False ]
9. An economy always operates on the PPC curve. [ True / False ]
10. Opportunity cost arises due to scarcity of resources. [ True / False ]
PEACE Insttitute of Virtual Education and Learning Solutions

Subject: Economics AS

Part C: Short Questions

Answer each question briefly. { 3 -Marks each }

1. Define opportunity cost with an example.

2. What does a point on the PPC indicate?


PEACE Insttitute of Virtual Education and Learning Solutions

Subject: Economics AS

3. What is meant by economic efficiency?

4. What can cause the PPC to shift inward?

5. Why is the PPC typically concave to the origin?


PEACE Insttitute of Virtual Education and Learning Solutions

Subject: Economics AS

6. Explain the concept of trade-offs using a PPC diagram.

7. What does it mean when an economy operates inside the PPC?


PEACE Insttitute of Virtual Education and Learning Solutions

Subject: Economics AS

8. How can a country achieve a point beyond its current PPC?

9. Distinguish between actual and potential economic growth.

10. Describe the relationship between scarcity and opportunity cost.


PEACE Insttitute of Virtual Education and Learning Solutions

Subject: Economics AS

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