CAIE A-Level Economics 1.5 Production Possibility Curves Question Bank

CAIE A-Level Economics 1.5 Production Possibility Curves Question Bank
Cambridge International AS & A Level Economics 9708 syllabus for exams in 2026, 2027 and 20282026–2028

Practise using production possibility curves to analyse scarcity, choice, opportunity cost, efficiency, unemployment, capacity growth and reallocation between outputs.

Exam points

  • draw labelled PPCs and distinguish points inside, on and beyond current productive capacity
  • calculate or explain opportunity cost from movement along straight or bowed-out curves
  • separate a reallocation or utilisation change from an inward or outward capacity shift

Covered syllabus points

1.5.1—Production possibility curve1.5.2—PPC shape and opportunity cost1.5.3—PPC shifts1.5.4—Position within a PPC

Question 3

[Maximum number: 1]

The diagram shows a production possibility curve for an economy that produces capital goods and consumer goods.

Figure for Question 3 — CAIE A-Level Economics

Why is the production possibility curve drawn concave to the origin?

A

Capital goods are a more labour-intensive output than consumer goods.

B

Consumers always seek to maximise their satisfaction from consumption.

C

Profit maximisation for firms always ensures efficiency in production.

D

Some resources are more efficient in production of some goods than others.

Question 3

[Maximum number: 1]

The production possibility curve shows the maximum potential output of apples and pears for an economy using current resources.

Figure for Question 3 — CAIE A-Level Economics

Which pair of positions identifies an efficient and an inefficient outcome?

A

W and Y

B

W and X

C

X and Z

D

Y and Z

Question 4

[Maximum number: 1]

What does a production possibility curve show?

A

the actual demand in an economy given its existing resources

B

the maximum output an economy can achieve using existing resources

C

the maximum output an economy can ever achieve

D

the minimum combinations of output an economy can achieve

Question 5

[Maximum number: 1]

The diagram shows a production possibility curve (PPC) for an economy that produces two goods, X and Y . Both goods require labour to produce. The initial position of the PPC is at PPC 0{ }_{0}.

Figure for Question 5 — CAIE A-Level Economics

What is the effect on the PPC following the emigration of a large number of workers?

A

the PPC remains at PPC 0{ }_{0}

B

the PPC shifts from PPC0\mathrm{PPC}_{0} to PPC1\mathrm{PPC}_{1}

C

the PPC shifts from PPC0\mathrm{PPC}_{0} to PPC2\mathrm{PPC}_{2}

D

the PPC shifts from PPC0\mathrm{PPC}_{0} to PPC3\mathrm{PPC}_{3}