6 marksCentral Problem of Economics
CAPE Economics Unit 1 · 2008 · Paper 2 · Question 1(b)(ii)
Using the production possibilities frontier, discuss the following concepts:
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- 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]
- 1(a)(ii)State TWO assumptions upon which the PPF is based.[4 marks]
- 1(b)(i)Scarcity[6 marks]
- 1(b)(iii)Increasing Opportunity Cost[6 marks]
- 1(c)(i)aAllocative Efficiency[3 marks]
- 1(c)(i)bProduction Efficiency[3 marks]
- 1(c)(ii)Using the production possibilities frontier, illustrate the concepts of 'efficiency' and 'allocative efficiency'.[4 marks]
- 1(d)(i)Decrease in resources[3 marks]
- 1(d)(ii)Improvement in technology[3 marks]
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