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Try
your
best
to
answer
the
questions
on
each
page
and
then
check
your
answer.
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you
need
to,
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the
question
again
to
get
a
closer
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ready.
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Question
1
What
does
the
curved
line
on
the
PPF
model
show?
Check
answer.
The
curved
line
on
the
model
shows
the
maximum
output
combinations
possible
with
the
given
amount
of
resources
(factor
endowments
)
and
technology
that
an
economy
may
have.
Next
Question.
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Question
2
Any
point
inside
the
PPF,
like
that
shown
at
point
A
in
the
diagram
shows...?
Check
answer.
Unemployment.
Unemployed
resources.
Excess
capacity.
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Click
to
enlarge
image.
Click
and
hold
to
reduce
.
Question
3
A
shift
to
the
right
of
the
PPF
like
that
shown
in
the
diagram
could
be
caused
by
changes
in
what?
Check
answer.
New
or
improved
technology.
Immigration
-
more
people
coming
into
the
country
so
more
labour
/
resources.
Improved
productivity
-
making
better
use
of
the
resources
available.
New
resources
discovered.
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Question.
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Question.
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Click
to
enlarge
image.
Click
and
hold
to
reduce
.
Question
4
Producing
on
the
PPF
shows
that
a
country
is……?
Check
answer.
Operating
at
full
capacity.
Has
no
unemployment.
Is
operating
at
full
employment.
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Question.
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Question.
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Question
5
Starting
at
point
C
on
graph
1.
Which
point
would
show
the
effect
of
a
recession?
Why
does
it
go
to
this
point.
Check
answer.
It
would
go
to
point
A,
a
recession
means
that
there
are
unemployed
resources.
The
economy
has
a
recessionary
gap
and
so
there
are
unemployed
resources.
Point
C
shows
the
economy
producing
on
the
PPF
and
so
there
are
no
unemployed
resources
/
it
is
at
full
capacity.
Point
A
shows
the
economy
producing
inside
the
PPF
and
so
there
are
unemployed
resources.
Next
Question.
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Question.
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Click
to
enlarge
image.
Click
and
hold
to
reduce
.
Question
6
In
going
from
point
A
to
B
what
does
the
diagram
show?
Check
answer.
The
diagram
shows
an
increase
in
employment.
In
going
from
A
to
B
the
economy
is
producing
at
a
point
which
is
closer
to
the
PPF
-
the
point
of
full
capacity
or
output,
and
so
it
is
using
more
of
its
resources
and
there
is
less
unemployment.
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Question.
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Question.
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to
enlarge
image.
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and
hold
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reduce
.
Question
7
Use
the
diagrams
A
and
B
to
compare
and
contrast
the
impact
of
a
recession
with
an
increase
in
emigration
on
employment.
Check
answer.
Click
to
enlarge
image.
Click
and
hold
to
reduce
.
Define
-
A
recession
is
two
quarters
of
negative
growth,
it
is
cyclical
unemployment.
Emigration
i
s
people
or
labour
leaving
a
country
and
so
there
is
a
loss
of
resources.
A
recession
with
mean
that
the
economy
will
be
producing
inside
the
PPF,
there
are
unemployed
resources,
but
eventually
the
economy
may
recover
and
employment
increase.
Emigration
will
cause
the
economy
to
lose
resources
and
so
the
PPF
will
shift
inwards,
meaning
it
is
now
not
able
to
produce
as
much.
The
loss
of
people
will
cause
a
loss
of
income
and
consumption
and
so
AD
will
fall,
this
will
cause
unemployment
to
rise.
Emigration
will
have
a
larger
negative
impact
on
the
economy
than
a
recession.
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Question
8
Producing
at
which
point
in
the
diagram,
A
or
B,
will
have
the
greatest
future
impact
on
growth?
Fully
explain
your
answer..
Check
answer.
Click
to
enlarge
image.
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and
hold
to
reduce
.
Define:
Consumer
goods
are
goods
that
satisfy
households
needs
and
wants.
Capital
Goods
are
human
made
goods
used
to
produce
other
goods
and
services.
Producing
at
point
A
will
result
in
greater
future
economic
growth
because
it
will
result
in
more
capital
goods
being
produced
which
will
result
in
a
greater
increase
in
economic
capacity
as
more
resources
(capital
resources)
are
produced,
resulting
in
a
shift
of
the
PPF
to
the
right.
Previous
Question.
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