Name:_________________________________Period:_______________
1.
Graph.
The Production Possibilities Curve (PPC)
Guns
10
9
7
4
0
Butter
0
1
2
3
4
2. Label an impossible level of production with the letter A.
3. Label a point of underutilization with the letter B.
4. Draw a shift in the PPC (Labeled C) that shows what would happen if changes in gun technology
make production of guns easier.
5. Draw a shift in the PPC (Labeled D) that shows what would happen if the country moved from a
50% to 90% literacy rate.
6. Calculate the opportunity cost of producing the first unit of butter.
7. Calculate the opportunity cost of producing the first unit of guns.
8.
In most political campaigns, candidates promise more than they can deliver. In the US, both
Republicans and Democrats promise better health care, a better environment, better education,
and only minor reductions in defense. What economic concept do candidates ignore?