Basic Economic Problem · 3 question types
Past paper frequency (2018 to 2024)
This topic accounts for approximately 14% of your exam marks.
Opportunity cost and scarcity definitions appear on nearly every paper; consistently 4 to 6 marks in Q1 Part A context questions.
Most opportunity-cost questions in the exam are not "define" questions; they are apply questions worth 3 marks. The mark scheme typically awards one mark for each of three steps. Memorising the structure is the single most reliable way to earn full marks.
The three-step structure.
Step 1: Identify the choice. Name the resource being allocated, the agent making the decision, and the competing uses.
Step 2: Name the next-best alternative forgone. State the specific alternative that is sacrificed. Use the context in the question; do not say "something else".
Step 3: Frame it as a . Explain that scarce resources used for one purpose cannot also be used for the other.
4-mark Explain: how the economic problem leads to choices
What comes up: A 4-mark "Explain" question presents a context (for example, consumers buying a product in a market where supply is limited) and asks you to explain how the economic problem results in choices having to be made.
Write: Develop two linked points, each worth one mark plus a development mark. A strong response covers: (1) The economic problem means human wants are unlimited but resources are limited/finite, resulting in scarcity — so not all wants can be satisfied; (2) Because consumers have limited incomes, buying one product involves an opportunity cost in the form of the next best product that is sacrificed, so a choice must be made.
Watch out: Simply defining scarcity without connecting it to the need to choose earns only one mark. The chain must run: unlimited wants → limited resources → scarcity → choices → opportunity cost. Four mark points are possible across those steps, so expand each step before moving on.