SECTION D: ESSAY WRITING SKILLS

Attempt the following essay question:

Using the PPC, explain how an economy achieves economic growth. [10]

Question analysis

The purpose of this question is to test the students’ ability to recall the definition of the PPC and the assumptions that go behind the drawing. Students will also be required to explain the three causes for an outward shift of the PPC and provide examples to apply this definition to their own example.

Students need to show that economic growth will bring about a shift either in or of the PPC. Students with a strong interest in the subject will be able to distinguish between actual economic growth and potential economic growth and how this can be illustrated on the PPC diagram.

Bloom’s Taxonomy

Knowledge Students should be able to:1. recall the definition of the PPC2. state the assumptions behind it3. draw the diagram and explain the reason for the

shape and the slope of the curve4. define the meaning of economic growth

Comprehension Students should be able to:1. explain that economic growth can be illustrated on

the PPC diagram2. identify the three reasons for this shift of the PPC

and explain how a change in them will cause the outward shift.

Application Students should be able to:1. provide supporting examples to substantiate the

reasons that cause a shift in the PPCAnalysis Students should be able to:

1. recognize that there are actual economic growth and potential economic growth and how both are illustrated on the PPC

Synthesis Not required in this questionEvaluation Not required in this question

Essay Writing Skills

The focus of this lesson will be on the teaching of a proper essay structure, i.e. Introduction, Body and Conclusion. The content to be included in each of these three sections together with the reason for their presence must be clearly and thoroughly communicated to the students.

It will also introduce students to the method on how to write a proper economic essay and a basic level of interpretation of the requirements of the question.

Introduction

Define PPC: The PPC, also known as Production Possibilities Curve, shows all

combinations of two goods that can be produced by an economy within a specified period of time with all its resources fully and efficiently employed.

Assumptions made in constructing the PPC are:

(1) The economy devotes all its resources to the production of only two goods;

(2) The economy has a fixed amount of resources;

(3) The level of technology is fixed.

Students should explain the point above with the help of a PPC illustration.

Define economic growth: Potential economic growth: Increase in the ability, capability or potential of

an economy to produce goods and services. Actual economic growth: Increase in an economy’s real/actual level of

output (goods and services) over time.

BodyUse PPC to illustrate (potential) economic growth: As potential economic growth represents the economy’s ability to produce

more goods and services, it is represented by an outward shift of the PPC If there is an increase in the production possibility of only one particular

good/service, the PPC will have a pivoted shift. (Illustrate with diagram). If there is an increase in the production possibility of both goods/services,

the PPC will have a parallel shift. (Illustrate with diagram).

Increase in amount of resources: Any increase in quantity of capital, labour and land will lead to an

expansion of the PPC outwards. When there is an increase in the quantity of resources, it means that more

resources can be devoted to the production of goods and services thus leading to economic growth.

Possible reasons for increase in resources:

Labour: more workers (e.g. foreigners) joining the work force, Land: new found source of natural resource (e.g. oil), or Capital: more factories built.

For example as more foreign workers come into Singapore, the amount of labour available for Singapore increases.

This will lead to an increase in the ability of Singapore to produce more goods and services.

Improvement in productivity of resources: Productivity of the resources will also affect economic growth. The increase in productivity of the resources will result in economic

growth. When the productivity of the resources increases, more goods and

services can be produced given the same amount of resources. This implies an improvement in the existing quality of resources

When an economy has better educated and skilled people, they are able to use the current resources to produce more goods.

Improvement in technology: Any technological discovery that results in better combination of available

resources will cause an outward shift of the PPC This means that producers may use current resources to produce more of

a given good. Producers in the economy engaging in Research & Development (R&D)

programmes to come out with better production technology will increase their ability to produce more goods and services with a given amount of resources.

Use PPC to illustrate (actual) economic growth: Economic growth can also be in the form of actual economic growth where

there is an increase in the real or actual output of an economy. As actual economic growth represents the economy producing more

goods and services, it is represented by a movement of a point within the PPC to another point closer or on the PPC.

(Illustrate with diagram). This can be due to hiring of more resources or better utilization of

underemployed resources to produce more good and services.

Conclusion Economic growth within a country can be due to improvement of

technology, increase in the resources and/or improvement in productivity of resources for potential economic growth. It can also be deal to better utilization of idle resources or using of unemployed resources for actual economic growth. They are illustrated on the PPC diagram as a shift of the PPC or a movement of a point in the PPC to another point nearer to the PPC respectively.

Knowledge, Understanding, Application and Analysis

L3

A thorough knowledge of the factors with an excellent ability to describe and explain these in a precise, logical and reasoned manner. New illustrations and examples appropriate to the material discussed are introduced as further evidence of the ability to recognise the principles of the question. The distinction between actual and potential economic growth is made and is clearly illustrated on the PPC diagram.

7 – 10

L2

The answer shows the ability to identify factors leading to economic growth with the aid of a clearly, correctly labeled PPC diagram. Explanations of factors are accurate but underdeveloped with evidence of some ability to discriminate and form elementary judgements. There is a lack of clear and logical presentation. There is not much evidence of the ability to recognise unstated assumptions or to examine the implications of hypothesis, nor the ability to organize ideas coherently.

5 – 6

L1 The answer contains only a few points lacking depth and detail in answering the question. There is no effort made to provide a context and

1 – 4

gross conceptual errors are evident throughout the essay.