O-LevelEconomicsThe basic economic problem2281/12 · Oct/Nov 2020 · Q31 Mark

The diagram shows a production possibility curve (PPC) for a country. The country moved from position X to position Y on the PPC. [Figure 3.1] What is the most likely reason for this change?

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.

AFirms have decided to increase investment in technology.

BNew economic resources have been discovered in the country.

CThe government has brought about an increase in living standards.

DThe government has encouraged long-term economic growth.

✓ Correct answer

C: The government has brought about an increase in living standards.

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Topic: The basic economic problem, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, Oct/Nov 2020 Paper 1 Variant 2, question 3.

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