AP Macroeconomics Practice Quiz: Opportunity Cost and the Production Possibilities Curve (PPC)
Written by AP Content Team, Verified for 2026 AP Exams, Last updated: May 2026
Test your understanding with short quizzes. This quiz has 12 questions to check your progress.
Question 1 of 12
All Questions (12)
A) Unattainable with current resources and technology.
B) Efficiently produced.
C) Achievable, but indicates underutilized resources.
D) The result of economic growth.
Correct Answer: C
According to the provided content, the PPC illustrates efficiency and underutilized resources. Points on the curve are efficient, while points inside the curve represent an inefficient allocation or underutilization of resources, meaning more of both goods could be produced.
A) Price levels and inflation.
B) Supply and demand dynamics.
C) Tradeoffs and resource allocation.
D) Market equilibrium.
Correct Answer: C
The content explicitly states that the PPC is a model used to show the tradeoffs associated with allocating resources. It demonstrates the choices an economy must make due to scarcity.
A) Shift outward uniformly.
B) Shift inward uniformly.
C) Pivot outward along the capital goods axis.
D) Pivot outward along the consumer goods axis.
Correct Answer: C
The content states that the PPC can shift due to changes in productivity/technology. A change affecting only one good will cause an asymmetrical shift. The maximum production of capital goods will increase, while the maximum production of consumer goods remains unchanged, causing the curve to pivot.
A) An increase in the labor force.
B) A discovery of new natural resources.
C) A decrease in the availability of a key factor of production.
D) An improvement in technology.
Correct Answer: C
The content explains that the PPC can shift due to changes in factors of production. An inward shift represents an economic contraction. A decrease in the availability of a factor of production, like land, labor, or capital, would reduce the economy's overall productive capacity.
A) Increasing opportunity costs.
B) Decreasing opportunity costs.
C) Constant opportunity costs.
D) Economic inefficiency.
Correct Answer: C
The provided content specifies that the shape of the PPC depends on whether opportunity costs are constant, increasing, or decreasing. A straight-line PPC indicates that the resources are perfectly adaptable for producing either good, resulting in a constant opportunity cost for switching production from one good to the other.
A) 0.5 tons of wheat.
B) 1 ton of wheat.
C) 2 tons of wheat.
D) 50 tons of wheat.
Correct Answer: C
Opportunity cost is what is given up to get something else. To produce 50 tons of steel, the economy must give up 100 tons of wheat. The opportunity cost of one ton of steel is calculated as (What you give up) / (What you gain) = 100 tons of wheat / 50 tons of steel = 2 tons of wheat per ton of steel.
A) A movement from a point inside the curve to a point on the curve.
B) A movement along the curve.
C) An outward shift of the entire curve.
D) A point outside the current curve.
Correct Answer: C
The content directly states that 'Economic growth results in an outward shift of the PPC.' This signifies that the economy's overall productive capacity has increased, allowing for more of both goods to be produced.
A) 2 cars
B) 4 cars
C) 6 cars
D) 24 cars
Correct Answer: B
To move from combination B (10 computers, 28 cars) to combination C (20 computers, 24 cars), the country gains 10 computers but gives up 4 cars (28 - 24). The question asks for the opportunity cost of this change, which is the 4 cars that were sacrificed.
A) An increase in the overall productive capacity of the economy.
B) A reduction in unemployment.
C) A tradeoff, requiring the sacrifice of some amount of one good to produce more of another.
D) A change in the factors of production.
Correct Answer: C
The PPC shows the maximum combinations of goods that can be produced efficiently. Moving along the curve means reallocating resources from one good to another. This inherently involves a tradeoff and an opportunity cost, as producing more of one good requires producing less of the other.
A) Underutilized resources.
B) Constant opportunity costs of production.
C) Increasing opportunity costs as more of one good is produced.
D) Economic growth from new technology.
Correct Answer: C
The content states that the shape of the PPC depends on whether opportunity costs are constant, increasing, or decreasing. A bowed-out (concave) shape reflects increasing opportunity cost. This occurs because resources are not perfectly adaptable to the production of all goods; as you produce more of one good, you must give up increasingly larger amounts of the other.
A) Inefficient
B) Unattainable
C) Efficient
D) Ideal for consumption
Correct Answer: C
The content explains that the PPC illustrates the concept of efficiency. Any point on the curve represents a combination of outputs where all available resources are being used fully and efficiently. To produce more of one good, some of the other must be given up.
A) Constant opportunity costs.
B) Increasing opportunity costs of producing consumer goods.
C) Increasing opportunity costs of producing capital goods.
D) Decreasing opportunity costs for both goods.
Correct Answer: C
To get the first 10 capital goods (move B to A), the economy gives up 5 consumer goods. For the second 10 (C to B), it gives up 10 consumer goods. For the third 10 (D to C), it gives up 15 consumer goods. For the last 10 (E to D), it gives up 20 consumer goods. Because the amount of consumer goods given up increases for each additional 10 capital goods, there is an increasing opportunity cost of producing capital goods.