CAIE IGCSE Economics 1.1 The Nature of the Basic Economic Problem Questions
Practise the basic economic problem by linking scarce resources to choices, allocation questions, and economic versus free goods.
- Syllabus
- 2027–2029
- Course
- Economics 0455
Exam points
- define scarcity as finite resources against unlimited wants in consumer or government contexts
- distinguish what, how and for whom decisions from non-allocation choices
- compare economic and free goods using scarcity, resources and opportunity cost
Covered syllabus points
Question 1
[Maximum number: 1]
A government wants to build a new hospital.
What is most likely to prevent the government from doing this?
A
People in the country cannot afford healthcare.
B
People in the country would go abroad for healthcare.
C
The government cannot agree how big the hospital should be.
D
The government does not have enough money.
D
Question 2
[Maximum number: 1]
There are three key questions to be decided in determining resource allocation within an economy.
What does not relate to one of the choices in the three key questions?
A
whether all income groups receive the output
B
whether consumer or industrial goods are produced
C
whether economic goods or free goods are supplied
D
whether labour or capital is used in production
C
Question 3
[Maximum number: 1]
Consumers and producers face the same problem of satisfying wants.
What is the most likely reason wants cannot be satisfied?
A
consumers and producers cannot establish an equilibrium price
B
consumers have excess choice when producers oversupply
C
consumers have limited income and producers have finite resources
D
consumers lack information to buy and producers lack motivation to supply
C
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