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1.1 Economic methodology and the economic problem

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Question 10

The production possibility diagram below shows an economy operating on its frontier, producing a combination of consumer services and investment goods at point Z.

Production possibility frontier diagram

With no change in the current position of the production possibility frontier, there is now an increase in the production of investment goods.

Which row in the table below is most likely to occur over time because of this decision?

Short-term change in consumer servicesLong-term change in consumer services
AIncreaseIncrease
BIncreaseDecrease
CDecreaseDecrease
DDecreaseIncrease

Row A

Row B

Row C

Row D

1.1 Economic methodology and the economic problem Questions

  1. A Level
  2. /Economics
  3. /1.1 Economic methodology and the economic problem