Economics 2281 · O Level · The nature of the economic problem
The nature of the economic problem — practice question
In 2013, an earthquake on the Iran/Pakistan border wrecked many factories and homes. Some officials believed the Governments ought to rebuild the factories and homes, even though this would involve an opportunity cost. Others suggested that some people should be encouraged to emigrate.
(a)[2]
Define the term ‘opportunity cost’.
(b)[4]
Explain why the economic problem can never be eliminated.
(c)[6]
Using a production possibility curve diagram, analyse how the destruction of some resources affects an economy.
(d)[8]
Discuss whether a country will benefit if some of its people emigrate.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “the alternative that comes next best” …