WJEC A Level Economics
WJEC A Level Economics Scarcity and Choice Exam Questions
Free WJEC A Level Economics revision for Scarcity and Choice: what you need to know, common mistakes and exam-style questions with answers. Covers the basic economic problem, opportunity cost, production possibility frontiers, specialisation, the division of labour and the need for exchange.
Practise Scarcity and Choice with past papers
Once you have learnt this topic, find the Scarcity and Choice questions in real WJEC A Level Economics past papers and mark them with the mark scheme. Doing lots of real questions is the quickest way to learn how examiners ask about each idea.
About WJEC A Level Economics Scarcity and Choice
Scarcity and choice is the starting point of the WJEC AS Economics course and the first area of AS microeconomics. It introduces the basic economic problem: finite resources set against unlimited wants, which forces individuals, firms and governments to make choices with an opportunity cost. You use production possibility frontiers to illustrate scarcity, efficiency, unemployment of resources and growth, and you explain how specialisation and the division of labour raise productivity but depend on exchange and money. For WJEC this content sits in AS Unit 1 and AS Unit 2. Short PPF and opportunity cost questions are common in the Unit 1 multiple choice and structured questions.
What you need to know
- Scarcity Scarcity exists because the factors of production (land, labour, capital and enterprise) are limited while human wants are unlimited. Every economy must decide what, how and for whom to produce.
- Opportunity cost Opportunity cost is the next best alternative given up when a choice is made. A student choosing to work a Saturday shift gives up revision time; a government building a new hospital gives up other projects.
- PPF basics A production possibility frontier shows the maximum output combinations of two goods with given resources and technology. Points on the PPF are productively efficient, points inside show unused or wasted resources and points beyond are unattainable now.
- Increasing opportunity cost A PPF is normally concave because resources are not equally productive in every use, so each extra unit of one good costs more of the other. The PPF shifts outwards with more or better resources or technology.
- Specialisation and the division of labour Specialisation by individuals, firms, regions and countries raises output. Dividing production into separate tasks increases productivity but can cause repetitive work, low motivation and vulnerability if demand changes.
- Exchange and money Specialised producers must exchange surpluses. Money overcomes the double coincidence of wants problem of barter and acts as a medium of exchange, unit of account, store of value and standard of deferred payment.
Common mistakes in Scarcity and Choice
- Defining scarcity as a shortage of a particular good. Scarcity is the general condition of limited resources relative to unlimited wants.
- Giving the opportunity cost as all the alternatives forgone. It is only the next best alternative.
- Showing growth with a movement from inside the PPF to the curve. That is a fall in unemployment of resources; potential growth is an outward shift.
- Forgetting that specialisation needs exchange. Explain that gains from specialisation only happen if goods can be traded.
- Drawing PPF axes without labels. Always label each axis with a named good or service.
Try three Scarcity and Choice exam-style questions
1. Define the term scarcity. (1 mark)
Show the mark scheme answer
The situation where there are insufficient resources to satisfy unlimited human wants.
2. An economy is producing at a point inside its PPF. Explain two possible reasons for this. (4 marks)
Show the mark scheme answer
Unemployment of factors such as labour, e.g. in a recession; inefficient use of resources, e.g. outdated technology or poor management; so actual output is below what could be produced.
3. A farmer can grow 600 tonnes of potatoes or 200 tonnes of barley on the same land. Calculate the opportunity cost of 1 tonne of barley. (2 marks)
Show the mark scheme answer
600 / 200; = 3 tonnes of potatoes per tonne of barley.
Scarcity and Choice FAQs
What does WJEC A Level Economics Scarcity and Choice cover?
It covers the basic economic problem, opportunity cost, production possibility frontiers, specialisation, the division of labour and why exchange and money are needed.
Which unit is Scarcity and Choice examined in?
It is AS content, so it is examined in AS Unit 1 (Introduction to Economic Principles) and AS Unit 2 (Economics in Action). A2 Unit 4 assesses all A level content, so it can be drawn on again there.
What PPF points should I be able to explain?
Know what points on, inside and outside the curve mean, why the curve is usually concave, and what causes it to shift outwards, shift inwards or pivot.
