Economics 0455 · IGCSE · Production possibility curve (PPC) diagrams
Production possibility curve (PPC) diagrams — practice question
Indonesia's output is shaped by its factors of production. A production possibility curve diagram can be used to illustrate the link between resources and output. Indonesia does have extensive fishing waters, yet it does not actually catch many fish. Most fishing firms are small, and they compete with much larger foreign firms. Those larger foreign firms have been drawn into Indonesia's waters because demand for fish is rising. The price elasticity of demand for different types of fish has changed over the last few years.
(a)[2]
Identify the two human factors used in production.
(b)[4]
Explain two economic concepts demonstrated by a production possibility curve diagram.
(c)[6]
Analyse why demand for a product may become more elastic over time.
(d)[8]
Discuss whether small firms can compete successfully against large firms.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Labour input” …