These are original Marlbridge practice questions, not past exam questions. The mark points are a suggested Marlbridge rubric to help you check your work; they are not an official scoring guideline. All people, firms, places and data are fictional. Only addition, subtraction, multiplication and division are needed, so a four-function calculator is enough.
Question 1 (multiple choice · foundation)
Which statement best describes the economic problem of scarcity?
- (A) The resources available are not enough to satisfy all of society’s wants, so choices must be made.
- (B) At the current price, buyers want more of a good than sellers offer.
- (C) Only low-income countries lack the resources to meet their needs.
- (D) A good is scarce when its price is high.
Answer and explanation
Answer: (A). Scarcity is the gap between limited resources and unlimited wants. Because of that gap, people must choose how to use resources.
- (B) describes a shortage in one market. A shortage is temporary and can end; scarcity is permanent.
- (C) is wrong because scarcity is universal. High-income countries have more resources, but their wants still exceed them.
- (D) confuses a symptom with the cause. Scarce goods often have a price, but a low-priced good can still be scarce, and scarcity is defined by resources relative to wants, not by price.
Question 2 (multiple choice · foundation)
A bakery buys a new electric oven to bake more bread. In economics, the oven is an example of which factor of production?
- (A) Land
- (B) Labour
- (C) Capital
- (D) Entrepreneurship
Answer and explanation
Answer: (C). The oven is a human-made good used to produce other goods (bread), so it is capital.
- (A) Land means natural resources as found in nature. The oven was manufactured.
- (B) Labour is human effort. The baker who uses the oven supplies labour; the oven does not.
- (D) Entrepreneurship is the organising and risk-taking done by the owner who decided to buy the oven, not the oven itself.
Question 3 (multiple choice · core)
Which of these resources is least likely to be scarce, because of its non-rival nature?
- (A) Fertile farmland in a river valley
- (B) The working hours of a skilled heart surgeon
- (C) A widely known rule for rotating crops to keep soil healthy
- (D) A fleet of tractors owned by a farming cooperative
Answer and explanation
Answer: (C). A known rule is established knowledge. Any number of farmers can use it at the same time, and using it does not use it up, so it is non-rival and may not be scarce.
- (A) Farmland is rival: a field used for one crop cannot be used for another crop, or for housing, at the same time.
- (B) A surgeon’s hours are rival and limited: an hour spent on one patient cannot be spent on another.
- (D) Tractors are rival capital: one tractor can work only one field at a time.
Question 4 (calculation · core)
Brightwater Clinic, a fictional health centre, has 40 nurse-hours per day. A vaccination takes 15 minutes (0.25 hours) of nurse time. A routine check-up takes 30 minutes (0.5 hours). On Monday, 100 patients want a vaccination and 50 patients want a check-up.
(a) Use a calculation to show that the clinic faces scarcity on Monday. (b) The clinic decides to do every check-up first. How many vaccinations can it give? How many patients who wanted a vaccination are turned away? (c) Calculate the opportunity cost of one check-up, measured in vaccinations. (d) The clinic manager borrows 8 nurse-hours from another clinic. Is the scarcity problem at Brightwater solved on Monday? Explain.
Worked solution
(a) Hours wanted for vaccinations = 100 × 0.25 = 25. Hours wanted for check-ups = 50 × 0.5 = 25. Total = 50 nurse-hours. Only 40 are available, so the clinic is 10 hours short. It cannot meet every want and must choose: this is scarcity.
(b) Check-ups use 25 hours, leaving 40 − 25 = 15 hours. Vaccinations = 15 ÷ 0.25 = 60. So 100 − 60 = 40 patients are turned away.
(c) One check-up uses 0.5 hours, which could have given 0.5 ÷ 0.25 = 2 vaccinations. The opportunity cost of one check-up is 2 vaccinations. (Equivalently, one vaccination costs ½ a check-up.)
(d) No. With 8 more hours the clinic has 48 hours, but it needs 50, so it is still 2 hours short. Also, the borrowed hours are not free: the other clinic now has 8 fewer nurse-hours for its own patients. The trade-off has moved, not disappeared.
Suggested mark points (4): 1 for 50 hours needed compared with 40 available; 1 for 60 vaccinations and 40 turned away; 1 for 2 vaccinations; 1 for “still 2 hours short” or the point that the borrowed hours have an opportunity cost at the other clinic.
Common error: dividing the wrong way in (c) and writing ½ vaccination. Check: a check-up takes longer than a vaccination, so it must cost more than one vaccination.
Question 5 (constructed response · core)
Kelso Ferries is a fictional company that carries passengers across a lake. It uses:
- two passenger boats;
- the lake itself, and the landing beach on each shore;
- captains and ticket sellers;
- a manager who decided to start a new night service, which may lose money;
- money held in the company’s bank account;
- the ticket office building on one shore.
(a) Classify each item as land, labour, capital or entrepreneurship, or state that it is not a factor of production. (b) Choose one item and explain why it is scarce. (c) Explain why item 5 is not counted as a factor of production.
Model answer and suggested Marlbridge rubric
(a)
| Item | Classification |
|---|---|
| 1. Boats | Capital (human-made, used to provide the ferry service) |
| 2. Lake and beaches | Land (natural resources) |
| 3. Captains and ticket sellers | Labour |
| 4. Manager starting the night service | Entrepreneurship (decides and bears risk) |
| 5. Money in the bank | Not a factor of production |
| 6. Ticket office building | Capital (a human-made building used in production) |
(b) Example: the boats are scarce. Kelso has only two. A boat on the 9 a.m. crossing cannot also run a tourist trip at 9 a.m., so using it for one purpose means giving up another. Any item 1–4 or 6 with a reason based on limited quantity and alternative uses earns the mark. (Time is a good reason for item 3: each captain works only so many hours.)
(c) Money does not itself carry passengers. It is used to buy factors of production, such as fuel, boats or workers’ time. Economists count the boat, not the money that paid for it.
| Point | What earns it |
|---|---|
| 1 | Items 1, 2 and 3 all classified correctly |
| 1 | Items 4 and 6 classified correctly and item 5 identified as not a factor |
| 1 | Scarcity of one item explained using limited quantity and an alternative use (or limited time) |
| 1 | Money explained as a means of buying factors, not a productive resource |
Question 6 (constructed response · core)
Vellmark is a fictional country. It has rich oil fields and the highest income per person in its region. A newspaper writes: “Vellmark has so many resources that it no longer faces scarcity. Its people can have everything they want.”
(a) Define scarcity. (b) Evaluate the newspaper’s claim, giving two reasons. (c) The same article says: “Last month there were no new cars in Vellmark’s showrooms for three weeks, which proves the country suffers from scarcity after all.” Explain why this example describes a shortage rather than scarcity.
Model answer and suggested Marlbridge rubric
(a) Scarcity is the situation in which the resources available are not enough to satisfy all of society’s wants and needs, so choices must be made.
(b) The claim is wrong. Any two of:
- Scarcity is relative to wants. Vellmark’s resources are large, but its people’s wants are larger and keep growing (better hospitals, more housing, new technology).
- Time is scarce for everyone. Every Vellmark worker has a limited number of hours.
- Many resources are limited even in a rich country: land near cities, skilled doctors and engineers, water.
- Resources have alternative uses. Oil revenue spent on new roads cannot also be spent on schools, so Vellmark still faces trade-offs.
(c) The empty showrooms are a temporary gap in one market: buyers wanted more cars than sellers offered at the current price. When new cars arrive, or prices change, the gap closes. Scarcity is permanent and affects all resources; it does not need empty shelves to exist, and it would still exist after the showrooms are full again.
| Point | What earns it |
|---|---|
| 1 | Definition links limited resources to wants and the need to choose |
| 1 | First valid reason why Vellmark still faces scarcity |
| 1 | Second, different valid reason |
| 1 | Shortage identified as temporary and in one market, contrasted with permanent scarcity |
Question 7 (explanation · stretch)
Dr Ilse Marrow, a fictional engineer, publishes free instructions for building a low-cost water filter from sand, gravel and charcoal. Thousands of villages download and follow the instructions.
(a) Explain why the instructions may not be a scarce resource. (b) Explain why the villages still face scarcity when they build filters, naming two different factors of production. (c) A student says: “If all knowledge were shared freely, scarcity would disappear.” Evaluate this statement.
Model answer and suggested Marlbridge rubric
(a) The instructions are established knowledge, which is non-rival. One village using them does not reduce what is available to any other village, and they do not wear out with use. Since no one has to give up the instructions so that someone else can use them, there is no trade-off in their use, so they may not be scarce.
(b) Building a filter still uses rival, limited resources. For example:
- Land: sand, gravel and the water itself are natural resources. Gravel used in a filter cannot be used for building a path.
- Labour: villagers’ time spent building filters cannot be spent farming or at school.
- Capital: tools such as shovels and containers are limited; a container used as a filter cannot store grain.
Any two different factors, each with an example of a limited quantity or an alternative use.
(c) The statement is wrong. Sharing knowledge freely removes scarcity of the knowledge itself, and it can let the same resources produce more. But production still needs land, labour, capital and entrepreneurship, which are rival and limited. Learning and applying knowledge also takes time, which is scarce. And creating new knowledge needs researchers’ time and equipment, which have other uses. So wants would still exceed resources, and choices would still be needed.
| Point | What earns it |
|---|---|
| 1 | Instructions described as non-rival, with the meaning (use by one does not reduce use by others) |
| 1 | Two different factors named, each with a reason it is scarce |
| 1 | Evaluation: knowledge being shared does not remove scarcity of the other factors (or of time) |
Do not award the first point for “the instructions are free”. Being free to download is not the same as being non-rival.
How did you do?
- Q1 or Q6 wrong: re-read “The basic problem: scarcity” and “Scarcity is not a shortage” in the study guide.
- Q2 or Q5 wrong: re-read “Resources: the factors of production” and Worked example 1. Remember that money is not capital.
- Q3 or Q7 incomplete: re-read “Not every resource is scarce: non-rival knowledge” and Figure 2.
- Q4 wrong: re-work Worked example 2, and check which way you divided for the opportunity cost.
Then tick off the topic checklist.