Directorate: Curriculum FET
SUBJECT and ECONOMICS GRADE 10
GRADE:
TERM 2 WEEK 7
TOPIC: Micro Economics
LESSON Movement of the Production Possibility Curve. Efficiency and Inefficiency
AIMS OF LESSON: I must be able to understand:
• the movement of the production possibility curve.
• how to draw the movement/shift of the production possibility curve.
• the internal and external factors which determines the shift in the production possibility curve.
• Differentiate between efficiency and inefficiency
• Reasons for inefficiency
• Consequences of inefficiency
INTRODUCTION: The Production Possibility Curve is linked to content covered in:
Gr.8 EMS – Needs and Wants. Gr.9 EMS- Scarcity and Choices Gr.10 Economics: Basic Economic Problem
KEY CONCEPTS: CONCEPT DESCRIPTION
Make flashcards by 1. Efficiency Is illustrated by all the points on the production possibility curve
writing the concepts 2. Inefficiency Production points inside the Production Possibility Curve. Waste of resources occurs.
on the one side and 3. Inputs Resources such as land, capital, labour, entrepreneurship and technology
the explanations on
4. Outputs Goods and services produced with given inputs
the other side. Go
through it daily. 5. Productive Maximum outputs produced with minimum inputs
6. Efficient To do something good / To apply resources in the right manner
SKILLS: At the end of the lesson I should be able to:
1. draw a fully labelled graph and explain the movement of the PPC.
2. explain with the aid of a clearly labelled curve the impact of both the internal and external factors which may cause a
movement of the PPC.
3. Distinguish and explain the different types of efficiency and inefficiency
4. Explain the consequences of inefficiency
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NOTES: MOVEMENT OF THE PRODUCTION POSSIBILITY CURVE: 3. Increase in the production of both cellphones and
Walka’s.
1. Increase in the production of only WALKA’S. • The PPC as a whole move to the right from AB
• PPC swivels to the right from AM to AN to CD.
because more Walka’s are being produced.
Carefully read
through the notes.
Rewrite it in your
notebooks.
2. Increase in the production of cellphones. 4. Internal factors which determine a shift in the PPC
• The PPC swivels to the right form LO to LP • Improved production techniques
Factories shift from a labour intensive production process to
a capital intensive production process.
(Replace manual labour with machines)
• New and improved technology
This leads to more efficient production methods which will
increase output.PPC will shift to the right.
• The improvement of skills of workers through training and
motivation.
Increased training and motivation will improve productivity
and shift the PPC to the right.
5. External factors which determined a shift in the PPC
• The quality of factors of production
• Efficient transport services
• Efficient communication systems
• Health care which leads to healthier workers
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NOTES: EFFECTS OF INEFFICIENCIES IN THE MARKET:
Productive Efficiency Productive Inefficiency
• When all available resources are efficiently • When all available resources are NOT efficiently and
and productively used to produce the productively used to produced the maximum output
maximum output with the minimum inputs with the minimum inputs
Allocation Efficiency Productive Inefficiency
• Resources are allocated in the right • Resources are NOT allocated in the right
proportions proportions.
• Different goods and services that the • Goods and services produced are NOT required by
community requires are being produced. the community.
Pareto Efficiency
Carefully read
• It is a economic position where it is impossible to relocate resources to advantage one party without disadvantaging
through the notes.
the situation of another party
Rewrite it in your REASONS FOR INEFFICIENCIES
notebooks.
Lack of employment opportunities:
• If many people are unemployed labour is not used to its maximum and as a result, there will be productive inefficiency.
Slow economic development:
Go through it daily. • This can be as a result of unused farmland, unmined minerals etc.
Exploitation of consumers:
• High prices and poor-quality products
Poor infrastructure:
• Insufficient and unmaintained roads and communication
EFFECTS OF INEFFICIENCIES
• The economy as a whole cannot produce the potential quantity, quality and variety of goods and services that consumers prefer.
• The scarce factors of production are wasted.
• Consumers are offered fewer goods and services, often of a poor quality and at a higher price.
• The consumer standard of living is dropped below the country’s potential.
• Hardship for the economically vulnerable / marginalised
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ADDITIONAL Econ Gr.10 Core Notes
RESOURCES: Econ Gr. 10 Answer Series
Any other Caps Approved Econ Gr.10 Textbook
WCED EPortal( https://wcedeportal.co.za)
CONSOLIDATION
ACTIVITIES: 1. Choose the correct answer and write only the letter (A–D) next to the question number.
1.1 This factor will lead to an outward movement of the PPC:
A Improved technology
B Unavailability of labour
C Lack of raw materials
D Unproductive labour (2)
2. Give the correct term for the following descriptions:
2.1 It shows the alternative combinations of any two goods or services that can be
produced if all the available resources are fully and efficiently used. (1)
Answer these
questions in your 2.2 Land, Labour, Capital, Entrepreneurship. (1)
workbook.
2.3 A Market that does not produce the maximum output with the minimum input. (1)
2.4 It is achieved when the product mix reflects the tastes and preferences of consumers. (1)
2.5 This is where the goods and services produced do not reflect the needs and wants
and tastes and preferences of consumers. (1)
2.6 It is achieved when productive and allocative efficiency coincide. (1)
2.7 Producers produce at a point inside/ below the PPC. (1)
3. List TWO effects of productive inefficiency. (2x1) (2)
4. Name TWO types of efficiency. (2x1) (2)
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5. Explain the reasons for the movement of the PPC below. (8)
PRODUCT A
PRODUCT B
6. Study the graph below and answer the questions that follows:
6.1 What is depicted in the above graph? (1)
6.2 Identify one product the this country produce. (1)
6.3 Briefly explain the change in the graph above. (2)
6.4 Name TWO external factor for the change in the PPC. (2)
6.5 Explain TWO external factors for the change in the PPC. (4)
7. Discuss productive inefficiency and allocative inefficiency as effects of market failure. (8)
8. Explain the consequences of inefficiency. (8)
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