Explain how a production possibility curve with increasing opportunity costs illustrates the consequences of a government's choice to produce more military goods. Use a diagram to support your answer.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2017). The mark or mark type is shown in brackets.

1. [2] For Knowledge and Understanding: For an accurate ppc diagram with increasing opportunity costs showing military goods on one axis and some other appropriate category of goods on the other. E.g. merit goods
2. [2] For illustration showing that a movement along the ppc (1 mark) means an opportunity cost in terms of the next best alternative forgone. (1 mark)
3. [2] For Application: For a clear explanation that the 'increasing opportunity costs' means that the opportunity cost is rising as resources are re-allocated to the production of more military goods.
4. [2] For a clear explanation of why opportunity costs will rise as resources are re-allocated to produce more military goods
5. [4] For Analysis: That explains how the growth of an economy can result from the application of supply-side policies
6. [4] For an explanation of why supply-side policies might not work
7. [4] For Evaluation: That exercises judgement in considering whether supply-side policies are likely to be most ineffective/effective in generating growth. This must include a conclusion.