The diagram shows the production possibility curve (PPC) of a country producing at point T. The country has an ageing population and decides to allocate more resources to the production of health services. Which movement shows this change in resource allocation? A deposit of shale oil is discovered in an area of farming. The following estimates are made for a ten-year period. ? If the land is used only for farming it would yield income after tax of $10 billion. ? If the land is used only for shale oil extraction it would yield income after tax of $40 billion. ? The government would receive $5 billion in taxes from farming and $10 billion in taxes from shale oil extraction. What is the opportunity cost of using the land only for farming? The diagram shows a production possibility curve (PPC) for an economy that can produce cotton and cars. The economy is at point Q. Which of these points on the production possibility curve (PPC) shows the largest possible output of product Y currently achievable? What is the opportunity cost in the two years of completing the apprenticeship? What would cause the shift from X to Y? A farmer decides to grow potatoes instead of wheat. What is the opportunity cost of growing the potatoes? A government is not allowed to increase its military spending. Government spending is currently at X. Which diagram illustrates a possible change in government spending? The diagram shows an economy’s production possibility curve (PPC). The economy moves from point X to point Y. What is the most likely effect of this change? The diagram shows a production possibility curve (PPC) for a country. The country moved from position X to position Y on the PPC. What is the most likely reason for this change? The diagram shows the production possibility curve (PPC) of an economy producing at point X. What would be the opportunity cost of moving from point X to produce only consumer goods? A government reduces social security spending by $10 bn in order to increase defence spending by $10 bn. What is this an example of? The table shows the maximum production possibilities for goods and services for a country. The country originally produced only goods but now produces 20 million units of services. The country continues to operate at maximum production possibility. What is the opportunity cost for this country? A builder spends one hour travelling to and from work. He works 40 hours per week for $200. He is given a choice to work 50 hours a week for an extra $75. What would be the opportunity cost to the builder of working the extra hours? A country’s infrastructure was damaged by a natural disaster. Before the disaster, the country was producing at point Y on the production possibility curve (PPC). Which point represents the country’s production immediately after the disaster? A farmer sells land used for crops to a firm that will use the land for wind turbines to produce electric power. What is the opportunity cost of this decision by the farmer? Increasing output of one good reduces production of another good. Which economic concept does this change represent? The production possibility curve (PPC) shows the hours per day that a person has for either work or leisure. This person works 6 hours a day but then decides to work 9 hours a day. Which movement shows this change? The production possibility curve (PPC) shows the hours per day a student has for either entertainment or revision. The student revises for 3 hours a day. As exams approach, the student decides to revise for 9 hours a day. What is the opportunity cost of this decision? Helium is a gas that is limited in supply because it takes thousands of years to form. The US government holds 35% of the world’s supply of helium and has been selling its stocks. Helium is essential in medical scanners. It is also used for party balloons, which is a wasteful alternative use of a valuable good. Which two concepts apply to this statement? What is an opportunity cost for a consumer spending money on a holiday? Which diagram shows an opportunity cost by movement from point X to point Y? A student has nothing to do on a Friday evening. She withdraws $5 from the $100 she has in a savings account and buys a present to take to a party, to which admission is free. What does this involve? What is the purpose of an economy’s production possibility curve (PPC)? The diagram shows the choices for an individual between leisure and earnings. The person decides to take a job that gives more leisure time. What is the opportunity cost to the individual of moving from position Y to position X? A student defined opportunity cost as 'the alternative given up when a course of action is followed'. Why is this definition inadequate?