2 Use the concept of opportunity cost to explain why the following two statements have the same meaning: a efficiency in production means producing by use of the fewest possible resources b efficiency in production means producing at the lowest possible cost. 3 a Distinguish between output actually produced and output on the PPC. b Outline why an economy's actual output is most likely to be located somewhere inside its PPC. 4 Say an economy is initially at point F, producing 15 microwave ovens and 12 computers (Figure 1.1). State what would be the opportunity cost of moving to a point on the production possibilities curve, such as point C, where it would be producing 26 microwave ovens and 25 computers. 5 a Using diagram(s), distinguish between actual growth and growth in production possibilities. b List the factors that can give rise to each of these. 6 Use the production possibilities curve model and diagrams to show how the following can result in actual growth or growth (or decrease) in production possibilities: a a discovery of new oil reserves b firms hire more workers c a vaccine for contagious diseases is invented d firms improve how they manufacture and lower their costs of production e the widespread use of a new technology f a violent conflict destroys a portion of a country's factories, machines and road system