A PPC shows the most an economy can make of two goods with all its resources in use.
What the PPC assumes
Two goods
The economy makes only two goods, so the picture fits on two axes.
Fixed resources and technology
Land, labour, capital and know-how do not change.
Full and efficient use
Every resource is working, and working as well as it can.
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Moving along the curve shows what each choice costs.
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The points to remember
- Opportunity cost = what you give up of the other good.
- Read both changes off the axes: more wheat, fewer cars.
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The shape of the curve tells you how fast the opportunity cost grows.
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The points to remember
- Bowed out: resources suit one good better: increasing opportunity cost.
- Straight line: resources equally good at both: constant opportunity cost.
Quick reminder
- Axes: one good up the side, the other along the bottom
- Curve: one PPC, bowed out (a straight line also scores)
- Points: A and B on the curve, C beyond it for scarcity
- Dashed lines from each point to both axes, an arrow from A to B
- No numbers, no title
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A 10-mark answer on scarcity adds a point beyond the curve, then the move along it.
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Standard Level Paper 1 asked this in May 2025, as part (a) for 10 marks; it fits Higher Level too.
Using a production possibilities curve (PPC), explain the concepts of scarcity and opportunity cost.
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How the 10 marks are given
| Marks | What your answer needs |
|---|---|
| 9–10 | Theory fully explained, terms used correctly all the way through, the diagram included and fully explained |
| 7–8 | Theory explained, terms mostly right, the diagram included and explained |
| 5–6 | Theory partly explained, some terms, the diagram included |
| 1–4 | Theory only described or stated; few relevant terms |