(A) Identify the FOUR (4) assumptions underlying the Production Possibilities Curve.
Ireland is known for the production of Houses and Agricultural products. The following is a production possibility schedule for Ireland.
Combinations | Houses | Agricultural Products |
A | 0 | 150 |
B | 10 | 145 |
C | 20 | 130 |
D | 30 | 100 |
E | 40 | 60 |
F | 50 | 0 |
(B) Draw and label the PPC for Ireland. Place houses on the Y-axis.
(C) i. Use the letter K to illustrate a point of economic inefficiency on your graph.
ii. Explain why this point represents economic inefficiency.
(D) Explain THREE (3) factors that may cause a shift of the PPC to the right.
(E) The typical shape of a PPC bow outward or concave. Explain what this shape illustrates.
(F) Assuming that the Government increases resources to the Housing sector causing output to increase by 100%, illustrate this on a new graph.