Basic economic ideas and resource allocation — AS & A Level Economics (9708) questions by topic
Production possibility curves, opportunity cost, resource allocation and the causes of enterprise open the syllabus and generate 75 real questions from 2023 to 2025 papers, worth from 1 to 20 marks.
Identify and calculate test whether a PPC or a set of conditions is read correctly, while explain and assess require you to compare market allocation against an alternative economic system and reach a judgement, not simply list the three basic questions of resource allocation. Because diagrammatic precision is repeatedly cited as a weak point here, drafting a PPC-based answer and getting it marked immediately shows whether a movement along the curve is being confused with a shift of the whole curve.
What examiners look for
- A recurring criticism is variable diagram presentation, with candidates failing to fully explain the difference between constant and increasing opportunity cost even when the diagram itself is correct.
- Examiners repeatedly note responses that simply assume producers gain, consumers get more choice and governments earn more revenue, without any critical analysis.
- Reports flag answers unable to show that allocating more resources to consumption is a movement along the curve towards the consumption axis, rather than a shift of the curve.
- Strong answers explain the trade-off between short-run and long-run growth, for example that consumers may have fewer resources now but more choice later, and reach a supported evaluation.
- Strong responses compare the market system against an alternative economic system on who decides what, how and for whom to produce, reaching a Level 2 or 3 judgement.
May–June 2025, Paper 11
The diagram shows the production possibility curves of two countries, X and Y. [Diagram: two production possibility curves on axes of 'capital goods' (vertical, marked 60, 50, 40)…
Answer this question and get it marked →May–June 2025, Paper 12
What is the best definition of a positive economic statement? A A statement that is based on fact and can be tested. B A statement that attempts to influence economic decisions. C…
Answer this question and get it marked →The diagram is from a chapter on 'The Fundamental Economic Problem' in an Economics textbook. It should contain the terms opportunity cost, scarcity and choice in the order that…
Answer this question and get it marked →A country increases its spending on education and training. It pays for this by reducing unemployment benefit payments and increasing taxes on imports of machinery. What is the…
Answer this question and get it marked →The diagram shows an outward shift of the production possibility curve from PPC1 to PPC2. The vertical axis is consumer goods and the horizontal axis is capital goods. What could…
Answer this question and get it marked →May–June 2025, Paper 13
A tourist visits a government-owned tropical beach. She pays $10 to enter but finds it overcrowded. Which type of good is the beach? A a free good B an inferior good C a public…
Answer this question and get it marked →The diagram shows a country's production possibilities. Points K, L, M, N, R and S represent different combinations of capital goods and consumer goods. Point K cannot be achieved…
Answer this question and get it marked →A firm produces 100 units of good Y and 200 units of good X with a fixed amount of resources. This firm wants to increase production of good Y to 120 units and as a result it can…
Answer this question and get it marked →What is the most likely benefit of specialisation to a firm? A increase in motivation of employees B increase in imports from other countries C increase in the number of employees…
Answer this question and get it marked →Which row correctly identifies goods that would be expected to be produced in a mixed economy? goods that are excludable and rival in consumption goods that are non-excludable and…
Answer this question and get it marked →May–June 2025, Paper 21
With the help of a diagram, explain the reasons for a movement within a production possibility curve (PPC) and a shift of a PPC and consider the extent to which opportunity cost…
Answer this question and get it marked →May–June 2024, Paper 11
A worker earns $40 per hour. Rather than work, she decides to visit a museum for three hours. The visit costs a total of $40. What is the opportunity cost of visiting the museum?…
Answer this question and get it marked →The nature of a typical car assembly plant has changed. The industry has fewer firms, operates on larger sites and has more automated machinery. How is this change most likely to…
Answer this question and get it marked →Which item would be least likely to be classed as land? A fertilisers B fisheries C forests D coal
Answer this question and get it marked →Why does the concept of scarcity apply to the use of fossil fuels? A Demand fluctuates according to price changes. B Supply is insufficient to meet demand. C Their use is…
Answer this question and get it marked →An economist knows the current point at which an economy operates within its production possibility curve. What can the economist conclude about this economy? A its degree of…
Answer this question and get it marked →A government gives free food to poor households in a community. What is this food an example of? A a free good B a public good C a demerit good D a normal good
Answer this question and get it marked →Governments in market economies give different reasons for intervening in the operation of an economy. Which reason given is a normative statement? A Average incomes have failed…
Answer this question and get it marked →May–June 2024, Paper 12
The diagram shows a production possibility curve (PPC). It indicates the combinations of consumer goods and capital goods produced by an economy using all its available resources.…
Answer this question and get it marked →What is produced in a mixed economy but not in a free market economy? A demerit goods B free goods C private goods D public goods
Answer this question and get it marked →Earth observation satellites designed to acquire information are close to the theoretical case of a public good. In 2011, the World Meteorological Organisation estimated that…
Answer this question and get it marked →What is the opportunity cost of a virus to the healthcare service in a country? A increased number of hospital patients B increased use of personal protective equipment C…
Answer this question and get it marked →The share of total incomes from profit in a country shows more variation over time than incomes from interest, rent and wages. What is the most likely reason for this? A Interest…
Answer this question and get it marked →May–June 2024, Paper 13
What is not an example of a public good? A education B flood control systems C national defence D street lighting
Answer this question and get it marked →The diagram shows a production possibility curve for an economy that produces two goods, X and Y. When will the opportunity cost of producing more of good X be the largest? A…
Answer this question and get it marked →Which activity illustrates the consumption of a ‘free’ good? A a farmer using water taken from a river B a patient visiting a medical facility provided by a charity C a person…
Answer this question and get it marked →What is essential to eliminate scarcity? A the existence of sufficient resources to meet all needs and wants B producers consistently produce in excess of demand C the government…
Answer this question and get it marked →What will encourage a higher degree of division of labour? A firms wishing for a greater level of self-sufficiency B firms wishing to increase their flexibility in production C…
Answer this question and get it marked →May–June 2024, Paper 23
Use a production possibility curve (PPC) diagram to explain how a government in a mixed economy might allocate more resources to consumption and fewer resources to investment and…
Answer this question and get it marked →October–November 2024, Paper 11
Which statement is a normative statement? A The annual rate of inflation in Malaysia increased from 2.8% in May 2022 to 3.4%. B The annual rate of inflation was 3.4% in Malaysia,…
Answer this question and get it marked →Which statement is not correct? A Addictive drugs are regarded as demerit goods because users are unaware of the full damage they do. B Air is regarded as a free good because its…
Answer this question and get it marked →The diagrams show production possibility curves. Which diagram shows constant opportunity costs? Each diagram plots consumer goods (vertical axis) against capital goods…
Answer this question and get it marked →Farmers using traditional methods lack access to finance and often employ family members on a part-time basis. If working practices in agriculture could be improved, how would…
Answer this question and get it marked →October–November 2024, Paper 12
The production possibility curve for a country is shown. [Diagram: a production possibility curve. The vertical axis is labelled 'manufactured goods' and the horizontal axis is…
Answer this question and get it marked →In a clothing business, after specialisation, real output per worker increased in the first six months but then output per worker began to fall. What might be the most likely…
Answer this question and get it marked →A wine producer and bottler wanted to expand its production significantly. To finance the expansion it offered investors discounts on restaurant meals if they bought 2000 shares…
Answer this question and get it marked →Which statement is positive? A All taxes should be proportional to income. B A progressive tax is a fair tax. C Greater equality of income is desirable. D Income inequality is…
Answer this question and get it marked →The diagram shows the change in a country’s production possibility curve from PQ to PR. [Diagram: the vertical axis is labelled 'public goods' and the horizontal axis is labelled…
Answer this question and get it marked →October–November 2024, Paper 13
The diagram shows a country's production possibility curve. [Diagram: a production possibility curve. The vertical axis is 'food (units)' with 100 marked and the horizontal axis…
Answer this question and get it marked →Which type of good does not consume scarce resources? A economic good B free good C merit good D public good
Answer this question and get it marked →The factors of production earn different rewards. What identifies the correct economic term for these rewards? A capital – surpluses B enterprise – dividends C labour – interest D…
Answer this question and get it marked →What is most likely to be an advantage of the division of labour? A an increase in labour force creativity B an increase in labour productivity C an increase in workforce…
Answer this question and get it marked →Which policy is most likely to solve the free rider problem caused by public goods? A an advertising campaign B a direct provision by the government C a minimum price D a tax on a…
Answer this question and get it marked →Very low interest rates in an economy encourage economic growth and cause a large increase in house prices. Which group of people is most likely to experience a fall in income and…
Answer this question and get it marked →A large-scale farming enterprise uses inputs of labour and capital equipment that are substitutes. If the government introduces a policy to subsidise capital equipment, how would…
Answer this question and get it marked →October–November 2024, Paper 21
With the help of a diagram, explain the significance of a position within a market economy's production possibility curve (PPC) and consider whether such a position is likely to…
Answer this question and get it marked →October–November 2024, Paper 22
With the help of a production possibility curve (PPC) diagram(s), explain the difference between constant and increasing opportunity costs and consider how choices in deciding…
Answer this question and get it marked →October–November 2024, Paper 31
A Belgian traffic study concluded that there would be significant benefits if 10% of car drivers switched to using motorcycles during peak traffic times. Which result would be…
Answer this question and get it marked →October–November 2024, Paper 41
With the aid of a diagram, explain the effect of natural resource development on the potential growth of Ghana.
Answer this question and get it marked →May–June 2023, Paper 11
What is 'a produced means of further production'? A capital B enterprise C labour D land
Answer this question and get it marked →A hospital management board decides to reallocate $800 000 from its $1.2m new buildings budget to spend on cancer care. What is the opportunity cost of this decision? A a cost of…
Answer this question and get it marked →The diagram shows the change in a country's production possibility curve from XX to YY. [Diagram: the vertical axis is 'food' and the horizontal axis is 'drink', with origin O.…
Answer this question and get it marked →A factory manufactures chairs. The manufacturing process is divided into a number of tasks. What is a likely disadvantage of this division of labour? A decrease in motivation B…
Answer this question and get it marked →May–June 2023, Paper 12
Which factor of production is needed first in order to set up a new business? A capital B enterprise C labour D land
Answer this question and get it marked →Assuming nothing else changes, which change in an economy's labour market will cause the production possibility curve to shift to the left? A an increase in worker immigration B…
Answer this question and get it marked →What is not a characteristic of a mixed economy? A The government has no role in setting prices. B The government manages taxation rights. C The government prevents firms from…
Answer this question and get it marked →What is not likely to result from the use of division of labour? A a decrease in average costs B an increase in motivation C an increase in productivity D an improvement in…
Answer this question and get it marked →There is a worldwide shortage of oil. The diagram shows the consumption and production of oil (billion tonnes) for selected countries. What can be concluded from the diagram? A In…
Answer this question and get it marked →May–June 2023, Paper 13
People plant flowers in a local park. Which statement is correct? A Flowers in parks are a public good because people can enjoy them at no charge. B Flowers in parks are a public…
Answer this question and get it marked →A government decides that all non-essential businesses must close for three months due to a disease pandemic. What is an opportunity cost of this policy? A increased leisure time…
Answer this question and get it marked →The diagram shows an economy's production possibility curve. The economy produces combinations of goods and services using all available resources. [Diagram: 'services' on the…
Answer this question and get it marked →Which economic conditions are likely to encourage an increase in enterprise? interest rates profit tax consumer confidence unemployment --- --- --- --- --- A high high high high B…
Answer this question and get it marked →May–June 2023, Paper 21
With the help of a diagram, explain the difference between the causes of a movement along, and a shift of, a production possibility curve (PPC) and consider which is likely to…
Answer this question and get it marked →October–November 2023, Paper 11
What will help solve the basic economic problem? A the control of the market system B the efficient allocation of scarce resources C the preservation of a healthy environment D…
Answer this question and get it marked →Country Z operates with a production possibility curve (PPC). Currently, output is at combination 1. [Diagram: axes 'good Y' (vertical) and 'good X' (horizontal), origin O. A…
Answer this question and get it marked →What is least likely to increase as a result of a transition from a planned economy to a free market economy? A prices of goods and services B privately owned resources C…
Answer this question and get it marked →October–November 2023, Paper 12
PPC is the production possibility curve in country T. Which changes take place in country T’s opportunity costs of producing X as it increases production of X? A Opportunity costs…
Answer this question and get it marked →What is considered the essential requirement for all entrepreneurs? A attracting customers B buying stock C managing staff D taking risks
Answer this question and get it marked →A new section of a road is provided toll-free by the government. What best describes this good? A a demerit good B a free good C a private good D a public good
Answer this question and get it marked →Eastern European nations have changed from planned to market economies. Which policy was least likely to have been adopted? A allowing prices to fluctuate B keeping established…
Answer this question and get it marked →The diagram shows three production possibility curves (PPC) for a country, labelled 3, 2 and 1. The original PPC for the country is 2. This country experiences a fall in its…
Answer this question and get it marked →October–November 2023, Paper 13
A factory introduces an automated production line to take advantage of division of labour. What is most likely to increase? A average cost of production B job satisfaction of…
Answer this question and get it marked →The table shows different combinations of rings and bracelets that can be produced by Luke and Zoe in the same time period. Luke: rings Luke: bracelets Zoe: rings Zoe: bracelets…
Answer this question and get it marked →What is an example of a free good? A a government sponsoring a free vaccination programme for its citizens B a hospital providing free treatment to the poor C a school providing…
Answer this question and get it marked →October–November 2023, Paper 33
The diagrams relate to industry X. P5 is the original production possibility curve. [Three diagrams. (1) 'average costs': axes price $ (vertical) and quantity (horizontal), with…
Answer this question and get it marked →