CAIE IGCSE Economics 1.4.4 Shifts of a PPC
Link changes in the quantity or quality of productive resources to outward, inward or product-specific PPC shifts and explain the resulting change in maximum output.
- Syllabus
- 2027–2029
- Course
- Economics 0455
Exam points
- Draw and label an outward PPC shift when technology or the labour force raises productive capacity.
- Draw an inward PPC shift after resource destruction and explain the fall in maximum output.
- Interpret a pivot when improved technology increases capacity for only one of the two products.
1.4.4—Shifts of a PPC question 1
[Maximum number: 4]
Some markets in Belgium are in equilibrium. The country produces a wide range of goods and services with different degrees of price elasticity of demand. The Belgian Government wants the economy to move to a production possibility point beyond its current production possibility curve (PPC). Belgium's scientific industry is one industry which is doing well. Workers in this industry are highly specialised.
Explain two ways an economy could reach a point outside its current PPC.
Explain two ways an economy could reach a point outside its current PPC.
Logical explanation which might include the following.
- Increase investment ( 1 ) devoting more resources to capital goods (1).
- Encourage immigration (1) increase size of the labour force (1).
- Land reclamation (1) creating more land on which to e.g. grow crops (1).
- Increase in education and training (1) raise quality / efficiency / productivity of labour (1).
- Increase spending on research and development / new technology (1) increase quality / efficiency / productivity of capital (1).
- Discovery of sources of resources (1) example/enables extra output to be produced (1).
4
One mark each for two ways identified and one mark each for two explanations.
If more than two reasons are given, consider the first three.
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