IGCSE Economics Paper-1: Specimen Questions with Answers 17 - 18 of 64

Question 17

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Question

MCQ▾

A new invention that reduces the cost of production causes production possibility curve to shift towards

Choices

Choice (4)
a.Left
b.Right
c.Downwards
d.Upward

Answer

b.

Explanation

A new invention that reduces

A New Invention That Reduces

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  • This graph shows on X axis quantity of Butter and on Y-axis quantity of Guns produced. The shift in the curve shows new invention or increase in resources.
  • A rightward shift in the production possibility shows either a new invention or change in technology. Production possibility curve shows different combinations of two goods that can be produced with the given resources.
  • To get to a point beyond PPC, there is a need to increase the supply of resources and technology, which will cause an outward shift in the PPC that, indicates the increase in production of both the commodities resulting in the growth of the economy.

Question 18

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Question

MCQ▾

In future why scarcity will continue to be a problem?

Choices

Choice (4)
a.Resources will remain finite
b.Fall of needs in the future
c.Prices of factors will increase
d.Population will decrease

Answer

a.

Explanation

  • In future scarcity will continue to be a problem as resources are finite example- fossil fuels. Scarcity is the basic economic problem, which is defined as the gap between the unlimited wants and limited resource. Scarcity demands for wise choices from people to satisfy their basic needs and accordingly additional wants can be satisfied as possible. Scarcity is also known as paucity.
  • In future, even the free natural resource can become scarce if the demand for such free resources increases. Non-Scarce resources like- water, land, roads etc. are becoming scarce due to increase in the consumer demand.

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