Economics 0455 · IGCSE · Production possibility curve (PPC) diagrams
Production possibility curve (PPC) diagrams — practice question
The main sectors in the Seychelles, an island nation in the Indian ocean, are tourism and fishing. The price elasticity of supply of fish is influenced by the relatively short period for which fish can be kept. Economic goods and free goods are important in both fishing and tourism. As workers have become more skilled and enterprise has increased, GDP per head has risen by more than seven times over the last fifty years.
(a)[2]
State the formula used to work out the price elasticity of supply (PES).
(b)[4]
Explain the difference in opportunity cost between economic goods and free goods.
(c)[6]
Analyse, using a production possibility curve (PPC) diagram, how an increase in enterprise affects an economy.
(d)[8]
Discuss whether skilled workers are always paid more than unskilled workers.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Percentage change in quantity supplied / percentage change in price” …