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4 marksMarket Failure

CAPE Economics Unit 1 · 2008 · Paper 2 · Question 1(c)(ii)

Define the following terms:

Using the production possibilities frontier, illustrate the concepts of 'efficiency' and 'allocative efficiency'.

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Other parts of this question

  1. 1(a)(i)With the aid of a diagram illustrating education and medical services, explain what is meant by 'production possibilities frontier (PPF)'.[12 marks]
  2. 1(a)(ii)State TWO assumptions upon which the PPF is based.[4 marks]
  3. 1(b)(i)Scarcity[6 marks]
  4. 1(b)(ii)Choice[6 marks]
  5. 1(b)(iii)Increasing Opportunity Cost[6 marks]
  6. 1(c)(i)aAllocative Efficiency[3 marks]
  7. 1(c)(i)bProduction Efficiency[3 marks]
  8. 1(d)(i)Decrease in resources[3 marks]
  9. 1(d)(ii)Improvement in technology[3 marks]

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