Po Leung Kuk Choi Kai Yau School

IGCSE Economics
Y9

Name: James Daniel Cowling Class: 9E Class No.: 10

Refer to the production possibility curve of Country O.

1. Which points in the diagram are attainable?

A. Q only
B. P and R only
C. P, Q and R only
D. P, Q, R and S Answer: C

2. Which movement represents a rise in unemployment?

A. P to Q
B. P to R
C. Q to R
D. R to P Answer: A

3. What is the opportunity cost of increasing the output of books from 15 to 50

units?
A. 10 units of weapons
B. 20 units of weapons
C. 30 units of weapons
D. 35 units of books Answer: B
Po Leung Kuk Choi Kai Yau School
IGCSE Economics
Y9
4. Explain how scarcity is shown in the PPC curve. (2)

Any point on the line is rendered an efficient use of the limited resources available to

produce books or weapons. Because of the problem of scarcity and the limited resources at

hand, to produce more of one good would mean the point moves along that line and less of

the other resource can be produced.

5. Name and describe two causes of the PPC shifting from point R to S. (6)

There could be a sudden increase in the resources and FOPs readily available to produce

weapons, therefore the curve would be able to expand upwards and the possibility to

produce more of weapons would increase and the unattainable point could become efficient.

There could also be a boost in economic capital alone and that would be enough to drag the

production curve up. For example, there could be an increase in investment in the mining

and quarrying industries, thereby increasing the extraction speed and subsequently the

supply of metals. That would move the point of efficiency from the previously efficient point R

to the previously unattainable point S that now becomes attainable and efficient.

6.In the first column of the following table, place the following movements on the
PPC shown in the above figure against the correct explanation:
- Y to X
- Y to Z
- Z to Y
- X to Y

Movement on the Explanation of the movement

PPC

Y to X Increase in unemployment
Po Leung Kuk Choi Kai Yau School
IGCSE Economics
Y9
Z to Y Increase in workers leaving the country to work abroad

Y to Z Improvements in technology for factory machinery

X to Y Spare capacity in factories gets used up and now factories

are working at full capacity