Paper 1 · June 2009 · Opportunity Cost and Scarcity
The diagram shows an economy's production possibility curve. What is the effect on present and future total output of a move from Z to point X?
Alower / lower
Blower / higher
Cunchanged / lower
Dunchanged / higher
Explanation
Moving from Z to X on the PPC means producing more capital goods and fewer consumer goods. Present output is unchanged (still on the frontier) but more capital goods means greater productive capacity in the future, so future output is higher.
ZIMSEC Economics Paper 1, June 2009, Q2