Economics 2281 · O Level · Differences in economic development between countries
Differences in economic development between countries — practice question
Swaziland is a small African nation in which six in ten people live in poverty, and most businesses are small and use very little capital equipment. In October 2015, it opened a new airport. Some economists argue that constructing the airport carried a large opportunity cost and created several external costs. The airport project forms part of the government’s strategy to change the country from developing to developed.
(a)[2]
What could the opportunity cost of constructing an airport be?
(b)[4]
Explain two reasons why a government might wish to change its country from developing to developed.
(c)[6]
Analyse the external costs that may result from constructing and extending an airport.
(d)[8]
Discuss whether consumers would prefer to buy a product from a small firm or from a large firm.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “The next best alternative that is given up” …