Lesson 1.3.1

1.3.1 Opportunity cost and production possibility curves Quiz: OCR Economics, Unit 1

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 1.3.1, Opportunity cost and production possibility curves: 20 multiple choice questions for the OCR Economics (H460), Unit 1: Introduction to Microeconomics, written with Revision Ninja.

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The 20 questions

  1. What is the formal economic definition of opportunity cost?

    • Average production cost
    • Future accounting profit
    • Next best alternative
    • Total financial cost

  2. What does a Production Possibility Curve illustrate for an economy?

    • Maximum potential output
    • Actual total demand
    • Minimum production costs
    • Equilibrium market price

  3. What does any point located inside a Production Possibility Curve represent?

    • Productive efficiency
    • Unattainable output
    • Maximum economic growth
    • Underutilised resources

  4. What does any point positioned directly on a Production Possibility Curve show?

    • Productive efficiency
    • Economic decline
    • Allocative inefficiency
    • Unattainable production

  5. Why is a standard Production Possibility Curve bowed outwards from the origin?

    • Zero factor mobility
    • Increasing opportunity cost
    • Decreasing marginal returns
    • Constant opportunity cost

  6. What does a straight-line Production Possibility Curve indicate about resource substitution?

    • Increasing opportunity cost
    • Unattainable production
    • Constant opportunity cost
    • Zero productivity

  7. What long-run economic change does an outward shift of the PPC illustrate?

    • Long-run economic growth
    • Resource reallocation
    • Short-run demand shift
    • Increased inflation rate

  8. What happens to an economy's PPC following a severe natural disaster?

    • Shifts outwards
    • Becomes linear
    • Shifts inwards
    • Moves along curve

  9. An economy shifts resources from making food to making machinery. What is the opportunity cost?

    • Food foregone
    • Total money spent
    • Machinery produced
    • Labour time saved

  10. Sacrificing 20 units of Good A yields 30 units of Good B. What is the opportunity cost per unit of B?

    • 30 Good A
    • 1.5 Good A
    • 10 Good A
    • 0.67 Good A

  11. What is true about an output combination located beyond an economy's current PPC?

    • Economically wasteful
    • Currently unattainable
    • Productively efficient
    • Allocatively efficient

  12. What is the long-term benefit of devoting more resources to capital goods today?

    • Future outward shift
    • Immediate inward shift
    • Current consumption rises
    • Zero opportunity cost

  13. How does international trade affect a country's consumption possibilities relative to its PPC?

    • Restricts consumption inside
    • Consumes outside PPC
    • Makes PPC linear
    • Shifts PPC inward

  14. What does a movement along a fixed Production Possibility Curve represent?

    • Fall in technology
    • Reallocation of resources
    • Economic decline
    • Increased productive capacity

  15. An economy reduces its unemployment rate from 10% to 3%. How is this shown on a PPC?

    • Movement along PPC
    • Outward PPC shift
    • Inward PPC shift
    • Movement towards PPC

  16. Which additional information is required to identify the allocatively efficient point on a PPC?

    • Total resource cost
    • Level of technology
    • Consumer preferences
    • Rate of inflation

  17. What formal economic term describes the slope of a production possibility curve?

    • Marginal utility
    • Marginal rate of transformation
    • Economic growth rate
    • Opportunity cost ratio

  18. Why can a PPC alone NOT identify which specific output combination is allocatively efficient?

    • Measures only inflation
    • Ignores production costs
    • Assumes fixed resources
    • Ignores consumer demand

  19. How is the economic concept of scarcity directly illustrated on a PPC diagram?

    • Unattainable region outside
    • Movement along boundary
    • Inside underemployment area
    • Negative slope curve

  20. A nation improves technology solely in car manufacturing. How does its PPC respond?

    • Remains unchanged
    • Shifts inwards
    • Shifts parallel outwards
    • Pivots outwards

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