Day: September 24, 2017

The diagram shows a production possibility frontier (PPF) for an economy.

The opportunity cost of a movement from point X to point Y is:

Select ONE answer:

1. 10 units of consumer goods
2. 20 units of capital goods
3. 30 units of capital goods
4. 80 units of capital goods
5. 90 units of consumer goods

Define the term ‘production possibility frontier’:
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This is multiple choice question is suitable for Economics KS5 classes.

The answer is 3 – By moving from point X to point Y, and extra 10 units of consumer goods have been produced at an opportunity cost of 30 units of capital goods as at Z they can produce 80 capital goods but only 50 capital goods at Y.

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