AP Econ 1.2 F25

If more of one good is produced, less of another good must be produced.

An economy can produce a limitless amount of all goods.

All individuals are able to satisfy their consumption desires.

Scarcity is eliminated by government provision of goods.

Scarcity only exists as a problem when there is more than one good to produce.

Private ownership of resources

Government sets all prices

Consumer demand drives production decisions

Prices fluctuate with supply and demand

Labor

Land

Capital

Money

Point A

Point B

Point C

Point D

Points inside the PPF are inefficient.

Points on the PPF are efficient.

Points outside the PPF are unattainable with current resources.

All points on the PPF represent equal opportunity cost.

France

England

Both have the same opportunity cost

Cannot be determined

Resources are equally efficient in all activities.

Opportunity cost increases as more of one good is produced.

There is no opportunity cost involved.

The PPF is always a straight line.