Basic economic ideas and resource allocation (AS level)

Worked examples (6)

• 1Define opportunity cost and identify it (3 marks)
• 2Calculate an opportunity cost ratio (3 marks)
• 3Classify free goods vs economic goods (4 marks)
• 4Explain opportunity cost of a government decision (5 marks)
• 5Read opportunity cost from a PPC (6 marks)
• 6Evaluate opportunity cost as a decision tool (8 marks)

Model answers (4)

• ✓Model answer — 9708 Paper 2 Section B(a) style
• ✓Model answer — 9708 Paper 2 Section B(b) style
• ✓Model answer — 9708 Paper 2 Section A style
• ✓Model answer — 9708 Paper 2 Section B(b) style

Worked examples (6)

• 1Classify positive vs normative statements (4 marks)
• 2Explain ceteris paribus in context (3 marks)
• 3Positive statements need not be true (4 marks)
• 4Apply short run / long run / very long run (5 marks)
• 5Separate positive and normative in a policy claim (6 marks)
• 6Explain why economists disagree (8 marks)

Model answers (4)

• ✓Model answer — 9708 Paper 2 Section B(a) style
• ✓Model answer — 9708 Paper 2 Section B(a) style
• ✓Model answer — 9708 Paper 2 Section A style
• ✓Model answer — 9708 Paper 2 Section B(b) style

Worked examples (6)

• 1Match each factor to its reward (4 marks)
• 2Classify items as capital or not (4 marks)
• 3Distinguish human and physical capital (5 marks)
• 4Analyse the division of labour for a firm (6 marks)
• 5Explain the role of the entrepreneur (6 marks)
• 6Evaluate specialisation for a country (8 marks)

Model answers (4)

• ✓Model answer — 9708 Paper 2 Section B(a) style
• ✓Model answer — 9708 Paper 2 Section B(b) style
• ✓Model answer — 9708 Paper 2 Section A style
• ✓Model answer — 9708 Paper 2 Section B(b) style

Worked examples (6)

• 1Identify the economic system (4 marks)
• 2How a market answers the three questions (4 marks)
• 3Strengths and weaknesses of the market system (5 marks)
• 4Why planned economies suffer shortages (6 marks)
• 5Compare allocation in market vs planned economies (6 marks)
• 6Evaluate the right balance of intervention (8 marks)

Model answers (4)

• ✓Model answer — 9708 Paper 2 Section B(a) style
• ✓Model answer — 9708 Paper 2 Section B(b) style
• ✓Model answer — 9708 Paper 2 Section A style
• ✓Model answer — 9708 Paper 2 Section B(b) style

Worked examples (6)

• 1Interpret points on, inside and outside a PPC (3 marks)
• 2Opportunity cost on a straight-line PPC (3 marks)
• 3Distinguish a shift from a movement along a PPC (5 marks)
• 4Explain why a PPC is concave (5 marks)
• 5Capital vs consumer goods and future growth (6 marks)
• 6Evaluate the usefulness of the PPC model (8 marks)

Model answers (4)

• ✓Model answer — 9708 Paper 2 Section B(a) style
• ✓Model answer — 9708 Paper 2 Section B(b) style
• ✓Model answer — 9708 Paper 2 Section A style
• ✓Model answer — 9708 Paper 2 Section B(b) style

Worked examples (6)

• 1Classify goods by type (4 marks)
• 2Apply rivalry and excludability (4 marks)
• 3Distinguish merit and demerit goods (5 marks)
• 4Explain the free-rider problem (6 marks)
• 5Why a public good differs from a merit good (6 marks)
• 6Evaluate dealing with a demerit good (8 marks)

Model answers (4)

• ✓Model answer — 9708 Paper 2 Section B(a) style
• ✓Model answer — 9708 Paper 2 Section B(b) style
• ✓Model answer — 9708 Paper 2 Section A style
• ✓Model answer — 9708 Paper 2 Section B(b) style