1.5 Production possibility curves

a) With the help of a diagram, explain the reasons for a movement within a production possibility curve (PPC) and a shift of a PPC and consider the extent to which opportunity cost determines the shape of a PPC. [8]

b) Assess whether a shift to the right of a PPC is only caused by an increase in the quantity of resources. [12]

a) With the help of a production possibility curve (PPC) diagram, explain the term scarcity and choice and consider the extent to which every choice has an equal opportunity costs. [8]

a) With the help of a diagram, explain the significance of a position within a market economy's production possibility curve (PPC) and consider whether such a position is likely to be permanent. [8]

a) With the help of a production possibility curve (PPC) diagram(s), explain the difference between constant and increasing opportunity costs and consider how choices in deciding which type of goods to produce in the short run may influence future economic growth. [8]

a) Use a production possibility curve (PPC) diagram to explain how a government in a mixed economy might allocate more resources to consumption and fewer resources to investment and consider a limitation of this approach to resource allocation. [8]

b) Assess whether producers are the only ones to benefit when an economy decides to allocate additional resources to investment. [12]

a) Explain how a production possibility curve can be used to demonstrate scarcity, choice and opportunity cost. [8]

a) Explain, with the use of a diagram(s), how the production possibility curve of an economy could be affected by a decrease in the quantity of labour available, but an increase in its quality. [8]

a) Explain with the help of a production possibility curve diagram(s) how a decision to re-allocate resources in an economy to produce more capital goods and fewer consumer goods would affect consumers in both the short run and the long run. [8]

a) With the aid of a diagram, compare what happens to an economy's resources to cause a movement along its production possibility curve with what happens to an economy's resources to cause a shift of its production possibility curve. [8]

a) Use a diagram(s) to explain how a production possibility curve can be used to show opportunity cost and why such a curve is usually drawn with increasing opportunity costs. [8]

a) Explain, with the aid of a production possibility curve (PPC) diagram, why scarcity makes choice inevitable for firms and how each choice has an opportunity cost. [8]

a) Use a production possibility curve diagram(s) to distinguish between the growth of an economy and a reduction in the number of unused resources in an economy and explain one reason that might cause each to occur. [8]

a) Explain, with the help of diagrams, how (i) constant and (ii) increasing opportunity costs determine the shape of an economy's production possibility curve. [8]

a) Show how a production possibility curve can be used to explain scarcity, choice and opportunity cost. [8]

b) Discuss whether enterprise is crucial to the outward shift of the production possibility curve in a mixed economy. [12]