A-LevelEconomicsBasic economic ideas and resource allocation9708/12 · Oct/Nov 2014 · Q31 Mark
The diagram shows the production possibility curve XX of an economy that produces consumer goods and capital goods. If the economy moves from point M to point N, which diagram represents the most likely position of the production possibility curve YY in the future?
This question uses a diagram from the original paper, which isn't shown here. Open the full paper from the past papers archive to see it.
A[Diagram showing PPC YY inside PPC XX]
B[Diagram showing PPC YY outside PPC XX, with a greater outward shift along the consumer goods axis compared to the capital goods axis]
C[Diagram showing PPC YY outside PPC XX, with a greater outward shift along the capital goods axis compared to the consumer goods axis]
D[Diagram showing PPC YY outside PPC XX, with a proportional outward shift from PPC XX]
✓ Correct answer
B: [Diagram showing PPC YY outside PPC XX, with a greater outward shift along the consumer goods axis compared to the capital goods axis]
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