Production possibility curve (PPC) diagrams

At a fixed quantity of resources, an economy that can make food or computers is located at point Q on its production possibility curve. An increase in population means that a larger share of resources must be directed towards food production. In the short term, which point on the diagram will the economy be at?

May/June 2015

The diagram depicts production possibility curves (PPC) for a country able to make agricultural products or manufactured products. At present, its PPC goes through points Q and S, but the country is facing unemployment. If full employment now occurs and, at the same time, new agricultural techniques raise productivity, what change would be shown on the PPC diagram?

May/June 2015

The diagram depicts an initial production possibility curve, $\text{PPC}_1$. What might lead to the movement of the production possibility curve from $\text{PPC}_1$ to $\text{PPC}_2$?

May/June 2016

In 2014, Cuban doctors received pay increases that lifted their salaries substantially. This meant that doctors’ earnings became more than twice those of nurses. Cuba is putting more resources into both medical care and tourism, which is changing the country’s production possibility curve. Living standards are rising in the country, although the increase is slower than in some other nearby countries.

May/June 2016

The diagram illustrates a production possibility curve for an economy. Which point on the diagram shows the most efficient point at which the economy can produce both consumer goods and capital goods?

May/June 2017

The diagram illustrates a production possibility curve for cars and furniture. A recession leads to reduced output of both cars and furniture. Which movement would represent this change?

May/June 2017

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 has extensive fishing waters, yet it does not actually catch many fish. Most of its fishing firms are small and they compete with much larger foreign firms. These bigger foreign firms have been drawn into Indonesia’s waters by rising demand for fish. The price elasticity of demand for different types of fish has changed over the last few years.

May/June 2017

The diagram illustrates a production possibility curve (PPC). Which location is most likely to cause the greatest outward movement of the PPC?

May/June 2018

The diagram represents a production possibility curve (PPC). Why is the curve normally shown in this shape?

May/June 2019

The diagram illustrates a production possibility curve (PPC) for an economy producing both capital goods and consumer goods. At which point would this economy have the greatest potential for sustained long run economic growth?

May/June 2019

During March 2017, Peru suffered flooding and the strongest winds seen in decades. Roads, bridges, houses and capital goods were ruined. The resulting damage is expected to reduce Peru’s Human Development Index (HDI) and economic growth rate. In 2016, Peru recorded an economic growth rate of 4%, which was above the growth rate of the USA.

May/June 2019

A natural disaster damaged a country’s infrastructure. Before the disaster, the country was producing at point Y on the production possibility curve (PPC). Which point shows the country’s output straight after the disaster?

May/June 2021

When artificial intelligence is built into machines, the productivity of capital rises. What effect will this have?

May/June 2022

The economy goes into a recession and shifts from full employment to $5\%$ unemployment. Which movement from X to Y on the PPC diagram illustrates the effect on the economy?

May/June 2022

What is the role of an economy’s production possibility curve (PPC)?

May/June 2022

The diagram illustrates two production possibility curves for a country. What might have caused the country’s production to move from point $K$ to point $L$?

May/June 2022

What does a point on a production possibility curve show for an economy?

May/June 2023

A country’s production possibility curve (PPC) shifts from $\text{PPC}_1$ to $\text{PPC}_2$. What might have caused this shift in the PPC?

May/June 2023

The diagram illustrates a production possibility curve (PPC) for an economy. Why does the economy move from point M to point N?

May/June 2024

The diagram illustrates a country’s production possibility curve (PPC). Which present mix of capital and consumer goods would lead to the largest quantity of consumer goods in the future?

May/June 2024

The diagram illustrates a production possibility curve (PPC). The economy is making full use of all the resources it has available. A government chooses to promote the production of manufactured goods rather than agricultural goods. Which movement indicates this policy change?

May/June 2025

The diagram illustrates the production possibility curve (PPC) for an economy that is currently at point X. Which change in the economy’s labour market would enable it to move to point Y?

May/June 2025

In 2022, Paraguay’s production possibility curve (PPC) moved rightward. Paraguay has a mixed economic system. Its government supplies merit goods and public goods. The country’s private sector is a major shampoo producer. Firms in the shampoo industry use division of labour. There are several firms in the industry, but the number is declining. It is possible that soon there may be only one firm in the industry.

May/June 2025

The diagram illustrates a production possibility curve for an economy capable of producing rice or electronic equipment. The economy currently lies at point Q. A recession leads to unemployment in the electronics industries. At which point would the economy be shown in the diagram?

Oct/Nov 2015

The diagram illustrates a production possibility curve for an economy able to produce agricultural products or financial services. It is presently at point Q. A crop disease reduces agricultural production, whereas the financial services sector raises output because demand has increased. To which point is the economy likely to move?

Oct/Nov 2015

The diagram illustrates a production possibility curve for maize and cotton. Bad weather leads to a poor harvest for both crops. Which movement could be used to show this change?

Oct/Nov 2016

In 2014, private companies started drilling in parts of the country in order to exploit natural gas supplies that were already known to be there. How could this decision be shown on the diagram that illustrates a production possibility curve for the country?

Oct/Nov 2016

The diagram illustrates a production possibility curve. The country is fully utilising all of its resources to make both manufactured goods and services. Which movement would show an improvement in technology in manufacturing?

Oct/Nov 2017

The diagram is a production possibility curve diagram. The country begins at position X. New and improved manufacturing methods are adopted, and the country also upgrades its tourist facilities. What would this be shown by?

Oct/Nov 2017

In some countries, richer people are now working longer hours on average than poorer people. One explanation is that well-paid jobs are believed to give greater job satisfaction. Finding work enjoyable can result in high labour productivity.

Oct/Nov 2017

The diagram illustrates a country’s production possibility curve (PPC). Which statement is correct?

Oct/Nov 2018

The diagram illustrates a production possibility curve (PPC) for an economy. Which shift on the diagram might show a rise in unemployment?

Oct/Nov 2018

The diagram illustrates two production possibility curves. Which statement about the shift from point X to point Y is correct?

Oct/Nov 2019

The diagram illustrates a production possibility curve (PPC) for a country. The country shifted from position X to position Y on the PPC. What is the most likely explanation for this change?

Oct/Nov 2020

Russia’s birth rate decreased by $11\%$ in 2017, reaching its lowest level for a decade. Over the next $30$ years, Russia’s population is predicted to drop from $144$ million to $107$ million. The government introduced measures intended to halt this population decline. In 2017, it also set out privatisation plans and policies designed to stop a fall in investment, which could result in a reduction in the quantity of capital goods. Privatisation can weaken monopoly power in a market.

Oct/Nov 2020

The diagram presents a production possibility curve (PPC) together with several possible output combinations of tea and coffee. Which combinations of tea and coffee can the economy produce at present?

Oct/Nov 2022

The diagram illustrates production possibility curves (PPC) for an economy making two goods, sweet potatoes and onions. At the start, the economy is functioning on PPC$_1$. Which pair of changes could move PPC$_1$ to PPC$_2$?

Oct/Nov 2022

The economy of country X is always operating on its production possibility curve (PPC). At what point will the goods and services produced by country X become scarcer?

Oct/Nov 2023

In 2020, Singapore saw both its population size and labour force fall. 2020 was a year of significant change across several Singaporean markets. Some shifted from disequilibrium to equilibrium. Even with all of these changes, Singapore still succeeded in raising its exports of goods and services.

Oct/Nov 2023

During 2021, the UK’s production point on its production possibility curve (PPC) shifted. Mean wages rose. A waiter had an average annual wage of $23,580, whereas a chief executive of a large commercial bank earned $1,617,000. Higher wages allow people to dine in restaurants more frequently. Some food sold in UK restaurants is brought in from abroad. In 2021, the UK government entered into free trade agreements with a number of countries, which removed import restrictions.

Oct/Nov 2024

A country is operating at point X on its production possibility curve (PPC), which illustrates how its output can be divided between capital goods and consumer goods. A recession then leads to the shutdown of some factories. Which point could show the country’s new location?

Oct/Nov 2025

The diagram illustrates a production possibility curve (PPC). Which point is most likely to result in the largest outward movement of the PPC?

Oct/Nov 2025