Production Possibility Curves
37 questions· page 1 of 4
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.
Assess whether a shift to the right of a PPC is only caused by an increase in the quantity of resources.
With the help of a diagram, explain the difference between a movement along a production possibility curve (PPC) and a shift of this curve and consider whether a decision to produce more of one product will always incur an equal opportunity cost.
Assess the extent to which it is always necessary to increase the size of the labour factor of production in order to cause an outward shift of the production possibility curve.
Discuss whether enterprise is crucial to the outward shift of the production possibility curve in a mixed economy.
Discuss whether an outward shift in an economy’s production possibility curve is more likely to occur in a free market economy or a centrally planned economy.
With the help of a production possibility curve (PPC) diagram, explain the terms scarcity and choice and consider the extent to which every choice has an equal opportunity cost.
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.
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.
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.
With the help of a diagram, explain the difference between the causes of a movement along, and a shift of, a production possibility curve (PPC) and consider which is likely to have the most immediate impact on an economy.
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.