Economics 2281 · O Level · 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 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.
(a)[2]
Identify the two human factors of production involved.
(b)[4]
Explain two economic concepts represented by a production possibility curve diagram.
(c)[6]
Analyse why demand for a product may become more elastic as time goes by.
(d)[8]
Discuss whether small firms can compete successfully with 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.” …