Economics 0455 · IGCSE · The role of markets in allocating resources
The role of markets in allocating resources — practice question
Washington State is the US state that produces the greatest number of apples. In 2019, apple output rose in Washington State, yet the market remained in disequilibrium. Apple farming is a labour-intensive industry because apples are harvested by hand. The US apple market is competitive.
(a)[2]
State the meaning of market disequilibrium.
(b)[4]
Explain opportunity cost and how it might affect a farmer’s decision to plant apples.
(c)[6]
Analyse how labour-intensive production may benefit an economy.
(d)[8]
Discuss whether consumers gain from a competitive market.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “A market where demand and supply do not match / are not balanced” …