Economics 0455 · IGCSE · Production possibility curve (PPC) diagrams
Production possibility curve (PPC) diagrams — practice question
In 2014, Cuban doctors were awarded pay increases that raised their salaries substantially. As a result, doctors earned more than twice the pay of nurses. Cuba is allocating more resources to both medical care and tourism, which is changing the country’s production possibility curve. Living standards are rising in the country, although the pace is slower than in some other nearby countries.
(a)[2]
What does the term production possibility curve mean?
(b)[4]
Explain, with examples, two factors of production used in the tourism industry.
(c)[6]
Analyse why doctors are paid more than nurses.
(d)[8]
Discuss whether living standards are always lower in developing countries than in developed countries.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Indicates maximum output combinations with given resources” …