Economics 0455 · IGCSE · Production possibility curve (PPC) diagrams
Production possibility curve (PPC) diagrams — practice question
During 2013, an earthquake at the Iran/Pakistan border ruined many factories and homes. Some officials argued that the Governments ought to rebuild the factories and homes, despite the opportunity cost. Others suggested that some people should be encouraged to emigrate.
(a)[2]
Define what is meant by ‘opportunity cost’.
(b)[4]
Explain why the economic problem can never be fully solved.
(c)[6]
With a production possibility curve diagram, analyse how the destruction of some of its resources affects an economy.
(d)[8]
Discuss whether a country is likely to benefit from some of its people emigrating.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “the next best alternative” …