Economics 0455 · IGCSE · Production possibility curve (PPC) diagrams
Production possibility curve (PPC) diagrams — practice question
In Belgium, some markets are in equilibrium. The nation makes a broad range of goods and services that have different levels of price elasticity of demand. The Belgian Government wants the economy to shift to a production possibility point beyond its present production possibility curve (PPC). One sector of Belgium’s economy that is performing well is the scientific industry. Workers in this industry have a high degree of specialisation.
(a)[2]
Define the term market equilibrium.
(b)[4]
Explain two ways an economy could move to a point beyond its current PPC.
(c)[6]
Analyse how price elasticity of demand can influence a firm’s pricing decisions.
(d)[8]
Discuss whether firms do or do not benefit from workers undertaking training.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Demand and supply are equal” …