Production possibilities curves

Grade 12 Social Studies Worksheet

Circle the best answer.

1. Read this first

   Use this

   Cards A to C on two countries (all made up). Card A, "Country M, one week (made up)". Who made it: written for this sheet. Summary in our words, not a quotation: Country M can make at most 60 radios or at most 120 shirts, or any mix on the straight line between. Card B, "Country N, one week (made up)". Who made it: written for this sheet. Summary in our words, not a quotation: Country N can make at most 20 radios or at most 60 shirts, or any mix on the straight line between. Card C, "A trade offer (made up)". Who made it: written for this sheet. Summary in our words, not a quotation: Country M will sell radios to Country N at 2.5 shirts for each radio. Before trade, each country uses only its own output. A student says Country N should stop making anything, since Country M is better at both goods.

2. 1.

   Jun compares cards A and B. Which country has the comparative advantage in radios, and why?

   • Country M: a radio costs it 2 shirts, against 3 shirts in Country N
   • Country M, because it can make more of each good than Country N can
   • Country N: a radio costs it 3 shirts, and a dearer good is one it should make
   • Country N: its 20 radios are fewer than M's 60, so its radios cost fewer resources
3. 2.

   Tala tests the student's claim on card C against cards A and B. What is the verdict?

   • Right: M has more output of both goods, so any trade must help M more than N does
   • Right: N cannot match M at either good, so N has no good to specialize in here
   • Wrong: N's shirt costs a third of a radio, M's costs half, so N should make shirts
   • Wrong: N makes 20 radios, and that many is enough to sell some of them to M
4. 3.

   Country M at home makes 40 radios and 40 shirts. Bo has M make 60 radios and trade 20 of them at card C's price. What happens?

   • M ends with 40 radios and 60 shirts, since each radio sold brings 3 shirts
   • M ends with 40 radios and 50 shirts, 10 shirts more than at home
   • M ends with 60 radios and 50 shirts, since it keeps its radios and also gets shirts
   • M ends with 40 radios and 40 shirts, the same as at home, since it sold 20 radios

5. Use this

   Cards A and B on a town's land (both made up). Card A, "The town's land each year (made up)". Who made it: written for this sheet. Table, columns Apartments (hundreds) | Park acres: 0 | 60; 1 | 58; 2 | 54; 3 | 48; 4 | 40; 5 | 30; 6 | 18; 7 | 0. Card B, "What residents would pay (made up)". Who made it: written for this sheet. Table, columns Next hundred apartments | Worth to residents, in park acres: 1st | 20; 2nd | 16; 3rd | 12; 4th | 9; 5th | 7; 6th | 5; 7th | 3. Note: residents' worth for each hundred is the park acres they would give up for it.

6. 4.

   Esme compares card A's cost of each next hundred apartments with card B's worth. Where should the town stop building?

   • At 700 apartments, the most possible, since each hundred is worth some acres of park
   • At 300 apartments, since the 3rd hundred is worth 12 acres, the highest worth for any hundred
   • At 400 apartments: the 4th hundred is worth 9 acres and costs 8, the 5th worth 7 and costs 10
   • At 500 apartments, since the 5th hundred is worth 7 acres and some value remains
7. 5.

   Residents come to value each next hundred apartments at 4 acres more than card B says. Zee reapplies the rule. Where does the town stop?

   • At 400 apartments, since the change moves the stop point when worth exceeds 20
   • At 700 apartments, since a worth of 4 more acres for each hundred makes each hundred worth building
   • At 600 apartments, since the 6th hundred is worth 9 acres and some value is left
   • At 500 apartments: the 5th hundred is now worth 11 acres and costs 10; the 6th is worth 9, costs 12
8. 6.

   A councilmember says 700 apartments and no park is best, since it is on the curve. Noah tests the claim. What is the verdict?

   • Weak: the 6th and 7th hundreds cost 12 and 18 acres but are worth just 5 and 3
   • Weak: the point is not on the curve, since the curve ends at 60 park acres
   • Right: apartments are worth more than parks, since the first hundred is worth 20 acres
   • Right: a point on the curve is the right choice, since it uses each acre of land
9. 7.

   The town now has 300 apartments and 40 park acres. Kira compares it with card A. Which statement is right?

   • Inside the curve, but any gain must cost apartments, since the town's land is fixed
   • Beyond the curve: 40 acres is less than the 48 acres that the table shows for 300
   • Inside the curve: 300 apartments allow 48 acres, so the town can add 8 at no cost
   • On the curve: 300 apartments and 40 acres both appear in the table of the town's land

10. Use this

    Cards A to C on the economy in 2020 (card A is real data; cards B and C are in our words or made up). Card A, "Capacity utilization, total industry". Who made it: the Federal Reserve Board (federalreserve.gov), via FRED, read November 14, 2026. Table, columns Month | Percent of capacity in use: February 2020 | 76.8; April 2020 | 64.1; December 2020 | 75.4; June 2021 | 77.3. Note: the index compares actual output with the Fed's estimate of sustainable maximum output for factories, mines and utilities; it leaves out most services. Card B, "Reading a curve (in our words)". Who made it: written for this sheet. Summary in our words, not a quotation: An economy using all its resources is on its production possibilities curve. Unused resources put it inside the curve. The curve itself moves outward when there are more resources or better technology. Card C, "Two claims (made up)". Who made it: written for this sheet. Claim 1: The drop to 64.1 percent in April 2020 shows the economy's curve shrank by about 12 points. Claim 2: By December 2020 industry was back near its curve.

11. 8.

    Milo tests Claim 1 on card C against cards A and B. What is the verdict?

    • Overstated: 64.1 percent shows output fell short of capacity, not that the curve shrank
    • Right: the fall shows the curve shrank, because card B says unused resources move the curve
    • Right: a fall of 12 points in utilization means the economy lost 12 points of capacity
    • Overstated: utilization covers factories, mines and utilities, so it says nothing about the curve
12. 9.

    Ren tests Claim 2 on card C against card A. Which statement is best?

    • Reasonable: 75.4 is above 64.1, so the economy was back to normal
    • Wrong: 75.4 is below 76.8, so industry was still far inside its curve
    • Proved: 75.4 percent shows the whole economy was back on its curve by December
    • Reasonable for industry: 75.4 is within 1.4 points of February's 76.8
13. 10.

    Ari asks what the cards leave out about whether the economy was inside its curve. Which missing fact matters most?

    • Whether unused capacity in services, which card A leaves out, moved the same way
    • Whether capacity utilization in 1980 was higher than in 2020, to compare the two decades
    • Whether the February figure is rounded, since 76.8 may differ from the exact index
    • Whether factories closed for good in April, since the index tracks closures