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AP Macroeconomics 1.2 Opportunity Cost and the Production Possibilities Curve Ppc Questions

Use production possibilities curves to calculate opportunity cost, classify feasible output combinations, and explain how resources or technology change capacity.

Syllabus
Effective Fall 2022
Course
AP Macroeconomics

Exam points

  • draw and label a PPC with specified goods and a required output point
  • classify points on, inside or beyond a PPC as efficient, underutilized or unattainable
  • calculate opportunity cost from a PPC, table or movement between output combinations
  • infer constant or increasing opportunity cost from the shape or data of a PPC
  • distinguish movement toward capacity from inward, outward or sector-specific PPC shifts

Covered syllabus points

MOD-1.B—a. Define (using graphs as appropriate) the PPC and related terms. b. Explain (using graphs as appropriate) how the PPC…

Question 1

[Maximum number: 1]

Assume that in the country of Zeta, the civilian noninstitutional population aged 16 and over is 1,000,000. The labor force participation rate is 70%, the unemployment rate is 9%, and the natural rate of unemployment is 5\%.

Consumer goods and capital goods are produced in the country of Zeta. Draw a correctly labeled graph of the production possibilities curve for Zeta. Indicate a point, labeled A, that represents the current state of Zeta's economy.

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