GCE O-Level · Economics (2286)

The nature of the economic problem: Practice Questions

5 multiple-choice questions marked as you go, and 5 written questions with worked solutions. All on The nature of the economic problem.

10 questions24 marksFree, no account

Question 1

1 mark

Which of the following is the most accurate description of the economic problem faced by a national government?

Question 2

1 mark

An economy moves from producing only agricultural goods to producing high-tech medical equipment. What happens to the nature of the economic problem in this country?

Question 3

1 mark

If a new technology is discovered that allows a product to be made using zero resources and it is available in infinite quantities to everyone, how would its classification change?

Question 4

1 mark

Why are all economic goods considered scarce?

Question 5

1 mark

From an economist's perspective, what is the fundamental reason why workers must make choices about their employment?

Question 6

2 marks

Identify the basic economic problem that a government faces when it must decide how to allocate its limited tax revenue between healthcare and education.

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Question 7

4 marks

Distinguish between a free good and an economic good by providing one example for each and explaining the role of opportunity cost in your distinction.

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Question 8

5 marks

A producer has a finite amount of capital and land. Analyze how the economic problem forces this producer to make choices, and explain the impact of these choices on the allocation of resources.

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Question 9

3 marks

Explain the nature of the basic economic problem and how it applies to different economic agents. Your answer should include:
(a) A definition of the basic economic problem in terms of resources and wants.
(b) An explanation of how this problem specifically affects consumers and governments.

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Question 10

5 marks

Economists distinguish between different types of goods based on their scarcity and the resources required to produce them.
(a) Contrast the characteristics of economic goods and free goods, providing one example for each.
(b) Explain why a good that is currently considered a free good might become an economic good in the future as a population grows.

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