O-LevelEconomicsThe basic economic problem2281/12 · May/June 2015 · Q31 Mark

The diagram shows production possibility curves (PPC) for a country that can produce agricultural products or manufactured products. [Figure 3.1] Its current PPC passes through points Q and S but the country is currently experiencing unemployment. If there is now full employment at the same time as new agricultural techniques enable an increase in productivity, what would be the movement on the PPC diagram?

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AP to R

BP to S

CQ to R

DS to Q

✓ Correct answer

A: P to R

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Topic: The basic economic problem, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2015 Paper 1 Variant 2, question 3.

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