Opportunity cost — Paper 1 · IGCSE Economics (9-1) 0987

3 A student decides to take up a two year apprenticeship for which she will earn $10 000 per year. After that she expects to earn $25 000 per year. She could take an unskilled job which pays $16 000 per year instead of the apprenticeship. What is the opportunity cost in the two years of completing the apprenticeship? A $10 000 B $12 000 C $25 000 D $32 000

1 marks

Answer: B

This question in 0987/12 May/June 2020

2 A builder spends one hour travelling to and from work. He works 40 hours per week for $200. He is given a choice to work 50 hours a week for an extra $75. What would be the opportunity cost to the builder of working the extra hours? A the ability to increase his purchasing power B the additional time travelling to and from work C the increased hourly earnings of $7.50 D the ten hours of leisure time

1 marks

Answer: D

This question in 0987/11 May/June 2021

3 A farmer sells land used for crops to a firm that will use the land for wind turbines to produce electric power. What is the opportunity cost of this decision by the farmer? A the cost of installing wind turbines B the loss of revenue from crops that grow on the land C the profit made from selling the land D the reduced cost of producing renewable energy

1 marks

Answer: B

This question in 0987/12 May/June 2021

2 What is an opportunity cost for a consumer spending money on a holiday? A the potential interest earned if the holiday money had been saved B the price paid for an air ticket to the holiday destination C the rubbish created during the holiday which affects the local community D the satisfaction that the consumer gains from the holiday

1 marks

Answer: A

This question in 0987/12 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 0987/12 Oct/Nov 2021

12 A student has nothing to do on a Friday evening. She withdraws $5 from the $100 she has in a savings account and buys a present to take to a party, to which admission is free. What does this involve? A an opportunity cost equal to $95 B an opportunity cost equal to other goods she could have bought for $5 C no opportunity cost, as entrance to the party is free D no opportunity cost, as she had no better way of using the time

1 marks

Answer: B

This question in 0987/11 May/June 2022

2 A student has nothing to do on a Friday evening. She withdraws $5 from the $100 she has in a savings account and buys a present to take to a party, to which admission is free. What does this involve? A an opportunity cost equal to $95 B an opportunity cost equal to other goods she could have bought for $5 C no opportunity cost, as entrance to the party is free D no opportunity cost, as she had no better way of using the time

1 marks

Answer: B

This question in 0987/12 May/June 2022

1 The Chinese government is concerned about the level of poverty and the need for more resources in low-income regions of the country. As a result, it is increasing its expenditure in those regions and reducing it in high-income regions. Which economic concept does this government policy illustrate? A diseconomies of scale B market forces C opportunity cost D specialisation

1 marks

Answer: C

This question in 0987/12 Oct/Nov 2022

3 A government spends $100m on subsidising wind farm construction instead of spending it on an increase in healthcare. Which economic concept does this spending decision illustrate? A external cost B free goods C market disequilibrium D opportunity cost

1 marks

Answer: D

This question in 0987/12 May/June 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 0987/12 Oct/Nov 2023

27 A small country whose only export is oil decides to reduce substantially the rate at which it extracts its limited oil reserves. What is the most likely reason for this decision? A to improve the balance of payments in the following year B to increase current government income C to maintain future living standards D to raise the level of employment in the oil industry

1 marks

Answer: C

This question in 0987/12 Oct/Nov 2023

2 A student decides to take up a two-year apprenticeship for which she will earn $10 000 per year. After that, she expects to earn $25 000 per year. She could take an unskilled job which pays $16 000 per year instead of the apprenticeship. What is the opportunity cost in the two years of completing the apprenticeship? A $10 000 B $12 000 C $25 000 D $32 000 The diagram shows a country’s production possibility curve (PPC).

1 marks

Answer: B

This question in 0987/12 May/June 2024

2 What is opportunity cost? A the allocation of resources in an economy B the cost to the individual when they consume a good C the lack of goods and services available to satisfy unlimited wants D the next best alternative forgone when making an economic decision

1 marks

Answer: D

This question in 0987/12 Oct/Nov 2024

3 The diagram shows a production possibility curve (PPC) for an economy that produces two goods, X and Y. Which point shows the greatest opportunity cost of producing one more unit of good X? A good Y B D C O good X

1 marks

Answer: C

This question in 0987/12 Oct/Nov 2024

3 The diagram shows a production possibility curve (PPC). The economy is using all of its available resources. W Z manufactured goods Y X O agricultural goods A government decides to encourage more production of manufactured goods instead of agricultural goods. Which movement shows this policy change? A W to X B W to Y C X to W D Z to X

1 marks

Answer: C

This question in 0987/11 May/June 2025

2 Which term describes the loss of potential benefit to a consumer when making a choice between alternatives? A opportunity cost B scarcity C shortage D the economic problem

1 marks

Answer: A

This question in 0987/12 Oct/Nov 2025