Exam Questions

Question 1

Explain the economic problem? [3]

Answer 1

The economic problem is the fact that there is a certain requirement of wants which can not be fulfilled due to scarcity in economics. This scarcity means choices can be offered and which can not. E.g. Doctors or benefits money.

Question 2

Which of the following statements is a normative statement?

A - an increase in the indirect tax on cigarettes will increase the price of cigarettes.
B - people ages under 21 years old are more likely to smoke than people over 30 years old.
C - people should not be allowed to smoke in private cars.
D - smoking can damage your health

Answer 2

Answer: C

Note the word “should” in the answer.

Question 3

Explain what is meant by ‘scarcity’? [2]

Answer 3

A situation that arises because people have unlimited wants in the face of unlimited resources.

Question 4

Explain how the economic problem affects you as a consumer? [4]

Answer 4

The economic problem is that there are limited economic resources needed to meet unlimited human wants.

As consumers we have limited income (money), therefore leading to choices based on wants, for example you may have to choose between a PS4 or an Xbox One.

Question 5

Explain how the economic problem can be applied to the health care market in the UK. [4]

Answer 5

The economic problem is that there are limited economic resources needed to meet unlimited human wants.

The NHS can be related to the economic problem because they have to choose where to spend their ince. The economic problem can be seen when the articles state ‘…closure… In either Eastbourne or Hastings’ and ‘…cancer drugs… Money best spent …improving surgical techniques’.

Therefore, this states how the NHS will always have some sort of scarcity in the services they can offer because the wants from the general public are unlimited, showing it is linked to the ‘economic problem’.

Question 6

Which of the following describes a free good?
A) a free good is one given away to consumers to promote the sale of other goods.
B) a free good is one provided free of charge to consumers by the government.
C) a free good is one that provides zero satisfaction to consumers.
D) a free good is one that has zero opportunity cost.

Answer 6

D