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3 marksCentral Problem of Economics

CAPE Economics Unit 1 · 2011 · Paper 2 · Question 1(a)(ii)a)

Section I question on production possibility frontier and market equilibrium.

Using the PPF diagram, explain the concept of scarcity.

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Other parts of this question

  1. 1(a)(i)Draw and label a production possibility frontier (PPF) diagram.[4 marks]
  2. 1(a)(ii)b)Using the PPF diagram, explain the concept of choice.[3 marks]
  3. 1(a)(ii)c)Using the PPF diagram, explain the concept of opportunity cost.[3 marks]
  4. 1(b)(i)State three assumptions underlying the production possibility frontier.[3 marks]
  5. 1(b)(ii)a)Use the PPF diagram to distinguish the efficient level of production.[3 marks]
  6. 1(b)(ii)b)Use the PPF diagram to distinguish the inefficient level of production.[3 marks]
  7. 1(b)(ii)c)Use the PPF diagram to distinguish the unattainable level of production.[3 marks]

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