2 Production Use production possibility frontier Show that scarcity can be illustrated graphically using PPFs, giving an possibility diagrams to depict choice, explanation that they represent the limit to an economy’s output at a given frontiers (PPFs) opportunity cost, short and long point in time with existing resources at existing factor productivity. term economic growth and efficiency. Understand movements along and Outward shifts and possible causes. Also, use as a link to specialisation shifts in PPFs. and division of labour and increasing efficiency of the production process. Link to skewed shifts i.e. greater improvements in one industry than the Understand why the PPF is usually other. drawn concave to the origin because of imperfect factor substitution and why a straight line Relate PPFs back to the discussions of market systems, to show that the PPF is an indication of perfect different choices systems made can be represented two dimensionally (e.g. factor substitutability of resources. capital vs. consumer trial balance UK vs. USSR), and then show that – over time, these changes may have implications for shifting the PPF. Also, Explain factors which may shift the use this as a link to economic growth (actual and potential), unemployment PPF inwards or outwards. and trade, and use this to discuss how short term decisions on resource utilisation may have longer term implications. Relate long-term economic growth and changes in productivity to Link to opportunity cost, as a concept and diagrammatically. outward or skewed shifts in an economy's PPFs. Inward shifts reflecting depletion of resources e.g. Ebola in West Africa, War in Syria. Specialisation, Understand the advantages and Refer to specialisation by countries, by regions and individuals in the division of disadvantages of specialisation. workplace. labour and exchange Define productivity and explain how Examine why exchange is an important consequence of it may be increased by the use of specialisation/division of labour i.e. countries/people cannot be entirely specialisation and other factors.
2 Production possibility frontiers (PPFs) Use production possibility frontier diagrams to depict choice, opportunity cost, short and long term economic growth and efficiency. Understand movements along and shifts in PPFs. Understand why the PPF is usually drawn concave to the origin because of imperfect factor substitution and why a straight line PPF is an indication of perfect factor substitutability of resources. Explain factors which may shift the PPF inwards or outwards. Relate long-term economic growth and changes in productivity to outward or skewed shifts in an economy's PPFs. Show that scarcity can be illustrated graphically using PPFs, giving an explanation that they represent the limit to an economy’s output at a given point in time with existing resources at existing factor productivity. Outward shifts and possible causes. Also, use as a link to specialisation and division of labour and increasing efficiency of the production process. Link to skewed shifts i.e. greater improvements in one industry than the other. Relate PPFs back to the discussions of market systems, to show that the different choices systems made can be represented two dimensionally (e.g. capital vs. consumer balance – UK vs. USSR), and then show that over time, these changes may have implications for shifting the PPF. Also, use this as a link to economic growth (actual and potential), unemployment and trade, and use this to discuss how short term decisions on resource utilisation may have longer term implications. Link to opportunity cost, as a concept and diagrammatically. Inward shifts reflecting depletion of resources e.g. Ebola in West Africa, War in Syria. Specialisation, division of labour and exchange Understand the advantages and disadvantages of specialisation. Define productivity and explain how it may be increased by the use of specialisation and other factors. Refer to specialisation by countries, by regions and individuals in the workplace. Examine why exchange is an important consequence of specialisation/division of labour i.e. countries/people cannot be entirely trial