IGCSE Economics Paper-1: Specimen Questions with Answers 21 - 22 of 64
Question 21
Question MCQ▾
Which of the following is an example of non-scarce goods
Choices
Choice (4) | |
---|---|
a. | Chicken eggs |
b. | Air |
c. | Refrigerator |
d. | Furniture |
Answer
b.Explanation
- A non- scarce good is a good, which is free and is available in unlimited amount in the economy. The opportunity cost of a free good is zero.
- Non- scarce goods are used in daily life but have no real value like chair, table, pens etc. On the other hand, scarce goods are not available in abundance in the economy. Scarce goods carry opportunity cost. It can include both private and public goods.
Question 22
Question MCQ▾
From the following table:
Production of Wheat (kg) | Production of Cloth (metre) |
100 | 0 |
90 | 25 |
70 | 50 |
40 | 75 |
Calculate the opportunity cost of rice from 50 to 75 metre.
Choices
Choice (4) | |
---|---|
a. | 1.8 |
b. | 0.8 |
c. | 5 |
d. | 3 |
Answer
a.Explanation
- Opportunity cost for a commodity refers to the amount of other commodity that has been sacrificed in order to produce the first commodity or in other words, it is the cost of the next best (second best) alternative.
- Marginal opportunity cost
- Unit of wheat sacrificed = 30 kg
- More units of cloth produced = 25 m
- Marginal opportunity cost
- Therefore, the answer is 1.8.