IGCSE Economics Paper-1: Specimen Questions with Answers 21 - 22 of 64

Question 21

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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

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Question

MCQ▾

From the following table:

From the following tableFrom the following table
Production of Wheat (kg)Production of Cloth (metre)
1000
9025
7050
4075

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 = 25m
  • Marginal opportunity cost
  • Therefore, the answer is 1.8.

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