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Edexcel IGCSE Economics 1.1.1 The Economic Problem Questions

Practise economic-problem questions by defining scarcity, applying opportunity cost and using PPC diagrams to show trade-offs or growth.

Syllabus
First assessment 2019
Course
Economics 4EC1

Exam points

  • Distinguish needs and wants, then explain how limited resources create choices.
  • Apply opportunity cost to consumers, firms or governments using a given decision.
  • Draw or interpret a PPC to show obtainable output, trade-offs or economic growth.

Covered syllabus points

1.1.1.a Scarcity, finite resources and choice1.1.1.b Opportunity cost and its effect on economic agents1.1.1.c Production possibility curve diagrams1.1.1.d Interpreting production possibility curves1.1.1.e Causes of positive and negative economic growth

Question 1

[Maximum number: 2]

Describe one reason why infinite wants lead to scarcity.

Question 2

[Maximum number: 3]

A firm has decided to purchase a new delivery vehicle.

Explain one possible opportunity cost for the firm of this decision.

Question 3

[Maximum number: 3]

In the box below, draw a production possibility curve (PPC) for a firm that can produce shampoo and/or toothpaste. On your PPC, draw and label what would happen if production of toothpaste was increased.

Figure 4

Figure 4

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