📊 Part 1: Understanding the Production Possibility Curve

1. What does a Production Possibility Curve (PPC) show?

The maximum combinations of two goods that can be produced with available resources

The minimum amount of goods a country must produce

The cost of importing goods from other countries

The population growth rate of a country

2. A point ON the PPC curve represents:

Inefficient use of resources

Maximum efficient use of all available resources

Impossible production levels

Unemployment in the economy

3. A point INSIDE the PPC curve indicates:

Maximum production efficiency

Economic growth

Underutilisation of resources or unemployment

Technological advancement

4. A point OUTSIDE the PPC curve represents:

Efficient resource allocation

Production levels that are currently impossible with existing resources

Economic recession

Perfect competition

✏️ Part 2: Applying PPC Concepts

5. Imagine New Zealand can produce either cars or computers. If the country is producing at a point inside the PPC, what does this suggest about the economy?

6. Complete the sentence: To move from a point inside the PPC to a point on the PPC, an economy would need to ________________.

7. Explain why a point outside the PPC is considered "impossible" in the short term.

8. What would need to happen for a point that was previously outside the PPC to become achievable?

Economic growth through increased resources

Technological improvements

Better education and training of workers

Increased government spending

🎯 Part 3: PPC Analysis

9. Draw and label a simple PPC curve showing the trade-off between producing wheat and milk in New Zealand. Mark and label one point each: ON the curve (Point A), INSIDE the curve (Point B), and OUTSIDE the curve (Point C).

10. Using your diagram above, explain what each point (A, B, and C) tells us about New Zealand's production efficiency.