The nature of the economic problem — Paper 1 · IGCSE Economics 0455

4 Although people may satisfy their basic needs there is always something more they want. To what economic issue does this statement refer? A exchange B market forces C scarcity D income distribution

1 marks

Answer: C

This question in 0455/11 May/June 2006

4 A hospital cannot treat all the people that need treatment. This is an example of A excess supply. B limited wants. C scarcity. D unlimited resources.

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2006

1 What is the basic economic problem facing all societies? A how to achieve price stability B how to keep employment levels high C the extent to which incomes should be redistributed D what will be produced, how and for whom

1 marks

Answer: D

This question in 0455/11 May/June 2009

1 Which terms summarise the nature of the economic problem? A finite resources and limited wants B finite resources and unlimited wants C infinite resources and limited wants D infinite resources and unlimited wants

1 marks

Answer: B

This question in 0455/11 May/June 2010

3 Which economic change would increase the problem of scarcity? A a decrease in fish stocks B a discovery of a new oil field C an increase in labour productivity D a reduction in waste

1 marks

Answer: A

This question in 0455/11 May/June 2010

2 Which terms summarise the nature of the economic problem? A finite resources and limited wants B finite resources and unlimited wants C infinite resources and limited wants D infinite resources and unlimited wants

1 marks

Answer: B

This question in 0455/12 May/June 2010

4 Which economic change would increase the problem of scarcity? A a decrease in fish stocks B a discovery of a new oil field C an increase in labour productivity D a reduction in waste

1 marks

Answer: A

This question in 0455/12 May/June 2010

1 What makes choice an important element in the basic economic problem? A Increased demand leads to higher market prices. B Limited resources have many alternative uses. C Reaching a market equilibrium may take a long time. D Scarce economic resources are distributed equally.

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2010

2 What makes choice an important element in the basic economic problem? A Increased demand leads to higher market prices. B Limited resources have many alternative uses. C Reaching a market equilibrium may take a long time. D Scarce economic resources are distributed equally.

1 marks

Answer: B

This question in 0455/12 Oct/Nov 2010

3 What makes choice an important element in the basic economic problem? A Increased demand leads to higher market prices. B Limited resources have many alternative uses. C Reaching a market equilibrium may take a long time. D Scarce economic resources are distributed equally.

1 marks

Answer: B

This question in 0455/13 Oct/Nov 2010

1 What is meant by the economic problem? A how to achieve efficiency with the existence of fixed resources and limited wants B how to allocate resources between public and private sectors C how to balance unlimited wants against finite resources D how to decide which methods to use to exploit all resources

1 marks

Answer: C

This question in 0455/11 May/June 2011

4 What is meant by the economic problem? A how to achieve efficiency with the existence of fixed resources and limited wants B how to allocate resources between public and private sectors C how to balance unlimited wants against finite resources D how to decide which methods to use to exploit all resources

1 marks

Answer: C

This question in 0455/12 May/June 2011

4 What is meant by the economic problem? A how to achieve efficiency with the existence of fixed resources and limited wants B how to allocate resources between public and private sectors C how to balance unlimited wants against finite resources D how to decide which methods to use to exploit all resources

1 marks

Answer: C

This question in 0455/13 May/June 2011

1 Every business organisation faces the problem of satisfying wants. What is the reason why wants are not fully satisfied? A An economy can only produce a limited amount of goods and services. B Governments cannot print enough money to pay for goods and services. C There is an over-production of goods and services by business organisations. D Workers are too skilled for the requirements of the jobs available.

1 marks

Answer: A

This question in 0455/11 Oct/Nov 2011

2 A university rejects 2000 qualified applicants who wish to study there. What factor of production could have caused the university to make this decision? A infinite quantity of capital B scarcity of labour C surplus of land D unlimited supply of enterprise

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2011

2 Every business organisation faces the problem of satisfying wants. What is the reason why wants are not fully satisfied? A An economy can only produce a limited amount of goods and services. B Governments cannot print enough money to pay for goods and services. C There is an over-production of goods and services by business organisations. D Workers are too skilled for the requirements of the jobs available.

1 marks

Answer: A

This question in 0455/12 Oct/Nov 2011

3 A university rejects 2000 qualified applicants who wish to study there. What factor of production could have caused the university to make this decision? A infinite quantity of capital B scarcity of labour C surplus of land D unlimited supply of enterprise

1 marks

Answer: B

This question in 0455/12 Oct/Nov 2011

1 A university rejects 2000 qualified applicants who wish to study there. What factor of production could have caused the university to make this decision? A infinite quantity of capital B scarcity of labour C surplus of land D unlimited supply of enterprise

1 marks

Answer: B

This question in 0455/13 Oct/Nov 2011

3 Every business organisation faces the problem of satisfying wants. What is the reason why wants are not fully satisfied? A An economy can only produce a limited amount of goods and services. B Governments cannot print enough money to pay for goods and services. C There is an over-production of goods and services by business organisations. D Workers are too skilled for the requirements of the jobs available.

1 marks

Answer: A

This question in 0455/13 Oct/Nov 2011

1 Which combination of resources and wants causes the economic problem? resources wants A limited limited B limited unlimited C unlimited limited D unlimited unlimited

1 marks

Answer: B

This question in 0455/11 May/June 2012

1 Economics is primarily concerned with A allocating scarce resources for unlimited wants. B controlling unemployment and inflation. C determining the level of government expenditure. D studying how new wants and economic resources can be produced.

1 marks

Answer: A

This question in 0455/12 May/June 2012

1 Economics is primarily concerned with A allocating scarce resources for unlimited wants. B controlling unemployment and inflation. C determining the level of government expenditure. D studying how new wants and economic resources can be produced.

1 marks

Answer: A

This question in 0455/13 May/June 2012

12 A country with a low income per head discovers large quantities of oil, which eventually makes everybody better off. Why is the basic economic problem of scarcity not solved by this discovery? A People may not get jobs in the oil industry. B People’s wants are always changing and increasing. C Prices of oil can fluctuate on the world market. D Production of oil can damage the environment.

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2012

2 A country with a low income per head discovers large quantities of oil, which eventually makes everybody better off. Why is the basic economic problem of scarcity not solved by this discovery? A People may not get jobs in the oil industry. B People’s wants are always changing and increasing. C Prices of oil can fluctuate on the world market. D Production of oil can damage the environment.

1 marks

Answer: B

This question in 0455/12 Oct/Nov 2012

1 A tractor factory runs out of important components and has to stop production. How does this illustrate the economic problem? A The factory lacks a competitive advantage. B The factory lacks economies of scale. C There are limited wants. D There is evidence of scarce resources.

1 marks

Answer: D

This question in 0455/11 May/June 2013

1 Why will the economic problem never be solved? A People will always want more products than can be produced. B People will never agree on what is the best economic system. C There will always be an uneven distribution of income. D There will always be some people unemployed.

1 marks

Answer: A

This question in 0455/12 May/June 2013

10 A tractor factory runs out of important components and has to stop production. How does this illustrate the economic problem? A The factory lacks a competitive advantage. B The factory lacks economies of scale. C There are limited wants. D There is evidence of scarce resources.

1 marks

Answer: D

This question in 0455/13 May/June 2013

11 How does a production possibility curve show that scarcity exists? A It shows that a rise in demand for one of the products increases its price. B It shows that as more resources are used to produce a product, its price rises. C It shows that at any point outside the production possibility curve an economy is wasting resources. D It shows that there is a limit to the quantity of products that can be produced with existing resources and technology.

1 marks

Answer: D

This question in 0455/11 Oct/Nov 2013

2 How does a production possibility curve show that scarcity exists? A It shows that a rise in demand for one of the products increases its price. B It shows that as more resources are used to produce a product, its price rises. C It shows that at any point outside the production possibility curve an economy is wasting resources. D It shows that there is a limit to the quantity of products that can be produced with existing resources and technology.

1 marks

Answer: D

This question in 0455/12 Oct/Nov 2013

1 What is the cause of economic scarcity? A limited wants with limited resources B limited wants with unlimited resources C unlimited wants with limited resources D unlimited wants with unlimited resources

1 marks

Answer: C

This question in 0455/12 May/June 2014

2 Economics textbooks often start by identifying the existence of the basic economic problem. What is it that makes this problem ‘basic’? A It affects all economies and individuals. B It is the most urgent target of government economic policy. C It only affects low-income developing economies. D It relates to the production of raw materials in the primary sector.

1 marks

Answer: A

This question in 0455/11 Oct/Nov 2014

1 Economics textbooks often start by identifying the existence of the basic economic problem. What is it that makes this problem ‘basic’? A It affects all economies and individuals. B It is the most urgent target of government economic policy. C It only affects low-income developing economies. D It relates to the production of raw materials in the primary sector.

1 marks

Answer: A

This question in 0455/12 Oct/Nov 2014

2 To help reduce the price of oil, new supplies are needed. However, in 2013, objectors opposed attempts to explore new sites because of the environmental damage the exploration might cause. How does this illustrate the basic economic problem? A Oil is a limited resource. B Oil is expensive. C The exploration involves demand and supply. D There are external costs involved in production.

1 marks

Answer: A

This question in 0455/11 May/June 2015

1 What is the basic economic problem? A finite resources and limited wants B finite resources and unlimited wants C infinite resources and limited wants D infinite resources and unlimited wants

1 marks

Answer: B

This question in 0455/12 May/June 2015

3 Water is a scarce resource in Singapore because the island’s small geographical area means there is little land on which to collect water for its 4.8 million people. Which method would be least successful in tackling its water scarcity? A exempting large families from paying water taxes B importing water from neighbouring countries C introducing a water tax that rises as consumption rises D redirecting funds from education to schemes to purify rainwater

1 marks

Answer: A

This question in 0455/13 May/June 2015

2 Why is choice an important part of the basic economic problem? A Choice is necessary to achieve an equilibrium price. B Limited resources have many uses. C Manufacturers produce a large variety of foods. D The market leads to an unequal distribution of goods.

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2015

2 The government of a prosperous country announced that it would offer free food to its citizens for a year. What would be the effect of this measure? A Agricultural resources would become unlimited. B Human wants would become finite. C More resources would be devoted to food production. D The basic economic problem would be solved.

1 marks

Answer: C

This question in 0455/12 Oct/Nov 2015

3 What is the best example of the existence of the economic problem? A A government provides accommodation for all those who are homeless. B A police force has a lengthening list of unsolved crimes. C Janitha hands her homework in at the last permitted deadline. D Musa completes his journey without putting petrol in his car.

1 marks

Answer: B

This question in 0455/12 May/June 2016

1 Which combination of terms gives the general definition of the economic problem? A bigger families, less food, starvation B falling supply, rising demand, shortage C higher population, fewer jobs, unemployment D limited resources, unlimited wants, scarcity

1 marks

Answer: D

This question in 0455/11 May/June 2017

3 What is the cause of the economic problem facing all countries? A climate change and global warming B significant quantities of unemployed resources C uneven distribution of income and wealth D unlimited wants in relation to limited resources

1 marks

Answer: D

This question in 0455/11 May/June 2018

1 In economics, natural sunlight is classified as a free good. What is the reason for this? A Sunlight is a gift of nature. B Sunlight is a renewable resource. C There is no opportunity cost of using sunlight. D Unlimited amounts of sunlight can be consumed.

1 marks

Answer: C

This question in 0455/12 May/June 2018

2 Economics textbooks identify the existence of scarcity as the basic economic problem. What is it that makes scarcity a problem? A It can cause inflation and unemployment. B It is impossible to satisfy unlimited wants. C It is the first priority of governments. D It only affects the richest countries.

1 marks

Answer: B

This question in 0455/13 May/June 2018

2 What is the basic problem facing all economies? A how to achieve a stable balance of payments B how to maximise tax revenues C how to reach full employment D how to use scarce resources

1 marks

Answer: D

This question in 0455/11 Oct/Nov 2018

2 What do economies aim to achieve in tackling the economic problem of scarcity? A equal balance between public and private sectors B equal reward for equal effort C increased competition in the use of resources D optimum allocation of finite resources

1 marks

Answer: D

This question in 0455/12 Oct/Nov 2018

2 Hospital services are provided by the government and paid for through taxation. People cannot always get the treatment they require because of long waiting lists. Of what is this an example? A external cost B market system C perfectly inelastic supply D scarcity

1 marks

Answer: D

This question in 0455/13 Oct/Nov 2018

1 What identifies a finite resource? A The resource does not renew itself. B The supply of the resource is greater than demand. C There is no opportunity cost for the resource. D There is unlimited supply of the resource.

1 marks

Answer: A

This question in 0455/13 Oct/Nov 2019

1 A natural resource was discovered in a country. The exploitation of this resource allowed the country to double its gross domestic product within ten years. Why did this not solve the basic economic problem? A Exploiting the resource required high expenditure on capital equipment. B Exploiting the resource caused significant environmental damage. C Gross domestic product was unevenly distributed in the country. D Wants still exceeded the resources available to meet those wants.

1 marks

Answer: D

This question in 0455/13 May/June 2020

1 What is the basic economic problem? A excess supply of goods and services B lack of profits C recession D scarcity of resources

1 marks

Answer: D

This question in 0455/11 Oct/Nov 2020

1 What causes economic agents to make choices? A limited needs and wants B the existence of finite resources C the existence of free goods D the market mechanism

1 marks

Answer: B

This question in 0455/12 Oct/Nov 2020

1 Why do consumers have to make choices when spending their income? A Advertising encourages consumer spending. B Consumers have unlimited incomes. C Consumer wants cannot all be satisfied with their income. D Not all products will be attractive to consumers.

1 marks

Answer: C

This question in 0455/13 Oct/Nov 2020

1 To help reduce the price of oil, new supplies are needed. However, objectors oppose exploration of new sites because of the environmental damage it may cause. Why is this statement an example of the basic economic problem? A Oil is a limited resource. B Oil is expensive. C The exploration involves demand and supply. D There are external costs involved in production.

1 marks

Answer: A

This question in 0455/11 Oct/Nov 2021

1 To help reduce the price of oil, new supplies are needed. However, objectors oppose exploration of new sites because of the environmental damage it may cause. Why is this statement an example of the basic economic problem? A Oil is a limited resource. B Oil is expensive. C The exploration involves demand and supply. D There are external costs involved in production.

1 marks

Answer: A

This question in 0455/12 Oct/Nov 2021

1 To help reduce the price of oil, new supplies are needed. However, objectors oppose exploration of new sites because of the environmental damage it may cause. Why is this statement an example of the basic economic problem? A Oil is a limited resource. B Oil is expensive. C The exploration involves demand and supply. D There are external costs involved in production.

1 marks

Answer: A

This question in 0455/13 Oct/Nov 2021

3 Helium is a gas that is limited in supply because it takes thousands of years to form. The US government holds 35% of the world’s supply of helium and has been selling its stocks. Helium is essential in medical scanners. It is also used for party balloons, which is a wasteful alternative use of a valuable good. Which two concepts apply to this statement? A demand and supply, government subsidy B excess demand, resource allocation C opportunity cost, private monopoly D public sector, factors of production

1 marks

Answer: D

This question in 0455/13 Oct/Nov 2021

1 What is an example of a free good? A defence B education C health services D sunshine

1 marks

Answer: D

This question in 0455/12 May/June 2022

1 What is the cause of scarcity in an economy? A high employment levels B high investment levels C unlimited resources D unlimited wants

1 marks

Answer: D

This question in 0455/11 May/June 2023

1 What is part of the economic definition of scarcity? A high levels of taxation B low levels of investment C unequal distribution of income D unlimited consumer wants

1 marks

Answer: D

This question in 0455/12 May/June 2023

1 GDP per capita in Switzerland is high. What is the reason why Swiss citizens still face the basic economic problem? A Income in Switzerland is unevenly distributed. B Inflation in Switzerland is high. C Swiss citizens expect high living standards. D Swiss citizens have to make choices in consumption.

1 marks

Answer: D

This question in 0455/13 May/June 2023

1 Economists describe resources as being ‘scarce’. What must be a consequence of scarce resources? A production will cause external costs B relative poverty will gradually increase C sustainable development will take place D wants will exceed productive capacity

1 marks

Answer: D

This question in 0455/11 Oct/Nov 2023

1 Which statement is correct? A Economic goods are not scarce. B Economic goods have no opportunity cost. C Free goods are scarce. D Free goods have no opportunity cost.

1 marks

Answer: D

This question in 0455/12 Oct/Nov 2023

1 A consumer has $10 to spend. A meal costs $9 and a drink costs $5. What would describe the situation if the consumer did not have enough money to purchase both the meal and the drink? A excess demand B free goods C market failure D the economic problem

1 marks

Answer: D

This question in 0455/13 Oct/Nov 2023

1 What causes economic agents to make choices? A limited needs and wants B the existence of finite resources C the existence of free goods D the market mechanism

1 marks

Answer: B

This question in 0455/12 Feb/March 2024

1 Why will scarcity always exist? A There are high costs of production. B There are low levels of education. C There are unlimited resources. D There are unlimited wants.

1 marks

Answer: D

This question in 0455/12 May/June 2024

1 How can the economic problem be described? A as insufficient capital to satisfy our wants B as insufficient income to satisfy all our needs C as insufficient resources to satisfy our unlimited wants D as insufficient wealth to satisfy all our needs

1 marks

Answer: C

This question in 0455/13 May/June 2024

4 What three key questions determine resource allocation? A what, how, for whom B what, when, for whom C where, what, how D where, how, for whom

1 marks

Answer: A

This question in 0455/13 May/June 2024

1 Which economic question is least likely to arise as a result of scarcity? A For whom will we produce? B How will we produce? C What will we produce? D When will we produce?

1 marks

Answer: D

This question in 0455/12 Oct/Nov 2024

1 What is the cause of the economic problem facing the global market for gold? A Consumer wants for gold are limited. B Gold is a limited resource. C Only governments can sell gold. D There is an unlimited supply of gold.

1 marks

Answer: B

This question in 0455/13 Oct/Nov 2024

5 There are three key questions to be decided in determining resource allocation within an economy. What does not relate to one of the choices in the three key questions? A whether all income groups receive the output B whether consumer or industrial goods are produced C whether economic goods or free goods are supplied D whether labour or capital is used in production

1 marks

Answer: C

This question in 0455/12 Feb/March 2025

1 A university rejects 2000 qualified applicants who wish to study there. Which factor of production could have caused the university to make this decision? A infinite quantity of capital B scarcity of labour C surplus of land D unlimited supply of enterprise

1 marks

Answer: B

This question in 0455/12 May/June 2025

1 Consumers and producers face the same problem of satisfying wants. What is the most likely reason wants cannot be satisfied? A consumers and producers cannot establish an equilibrium price B consumers have excess choice when producers oversupply C consumers have limited income and producers have finite resources D consumers lack information to buy and producers lack motivation to supply

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2025