Describe the shape of the typical production possibilities curve and explain why it has this shape.
What will be an ideal response?
The typical production possibilities curve bends or bows outward. It has this shape because opportunity costs increase as society produces more of a good. In order to get more of a particular good, increasing quantities of other goods must be given up. This is known as the law of increasing opportunity costs.
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According to your textbook,
A) millions of people know how to make pencils, but only a few know how to use them. B) millions of people know how to make pencils, but nobody knows how to use them. C) no single person anywhere in the world knows how to make a pencil. D) no single person anywhere in the world knows how to use a pencil. E) none of the above.
Among the various Internet and tech industries such as search, social networking, and operating systems:
A. firms such as Google, Facebook, Apple, and Microsoft have colluded so that each has a monopoly in its respective market. B. government antitrust regulations keep these markets highly competitive. C. competitive pressures keep prices and profits relatively low. D. firms like Google, Facebook, and Microsoft each dominate a particular market, yet remain active in the other markets to keep pressure on the dominant rivals in those markets.
The following graph is the production possibility curve for a three-person economy, with workers Janna, Drew, and Kari. 
Who has the greatest comparative advantage in shoe production?
A. Kari B. Janna C. Drew D. None of them
Retirement savings allows retirees to consume more of their disposable income because
A. they have a better work ethic than the young. B. they have better credit histories than the young. C. they can withdraw from their retirement savings accounts. D. they do not have debt.