O-LevelEconomicsThe allocation of resources2281/12 · May/June 2014 · Q21 Mark

How is an immediate effect of an increase in unemployment illustrated on a production possibility curve diagram?

Amovement of the production point closer to the curve

Bmovement of the production point further inside the curve

Cshift of the production possibility curve inwards

Dshift of the production possibility curve outwards

✓ Correct answer

B: movement of the production point further inside the curve

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Topic: The allocation of resources, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2014 Paper 1 Variant 2, question 2.

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