AQA GCSE Economics: Economic foundations: needs, wants and opportunity cost (8136) – Practice Questions

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs – examination boards hold copyright in their own papers. Use these alongside the official past papers from your board or school.

These questions cover section 3.1.1, Economic foundations, of the AQA specification for GCSE Economics (8136), first taught from September 2017: 3.1.1.1 economic activity, 3.1.1.2 the factors of production and 3.1.1.3 making choices. The specification has no tiers. All places, firms and figures are invented for practice. For explanations, see the study guide and revision notes, the wider How Markets Work guide, the AQA GCSE Economics hub, the checklist and the free diagnostics.

Questions

1. (a) State the difference between a need and a want. [2] (b) Explain one reason why something that was once a want may come to be regarded as a need. [2]

2. State the factor of production, and the reward it earns, in each case. [4]

• A grower pays a monthly charge to use an orchard owned by someone else.
• A bakery borrows money and buys a mixing machine.
• A bus driver is paid for a week’s work.
• Someone opens a bicycle repair stall using their own savings and may lose them if it fails.

3. Country D (illustrative) is making plans. Identify which key economic decision each statement is mainly about: what to produce, how to produce or who is to benefit. [3]

• Should farmland be used for more wheat or for new houses?
• Should the railway tunnel be dug by hand or with a tunnelling machine?
• Should free dental care go only to children or to everyone?

4. Explain one way in which consumers interact with producers and one way in which government interacts with producers. [4]

5. A shop owner says, “Our capital is the £50,000 in our bank account.” Explain why an economist would describe capital differently, and give two examples of capital the shop might own. [3]

6. A print workshop (illustrative) has one machine for 6 hours a day. It can print 25 posters an hour or 70 leaflets an hour. (a) The workshop prints posters for 2 hours. State how many posters it makes and how many leaflets it gives up. [2] (b) Calculate the opportunity cost of one poster in leaflets. [2]

7. In one month a small workshop in Town H (illustrative) has revenue of £12,000. It pays rent of £1,500, wages of £4,200, interest of £300 on a loan for equipment, and £3,000 for materials. (a) Calculate the profit. [2] (b) Calculate profit as a percentage of revenue. [1] (c) State which payment is the reward to land and which is the reward to labour. [2]

8. Explain why scarcity creates the basic economic problem. [4]

9. Country E (illustrative) has £90 million. It can build three clinics at £30 million each, two colleges at £45 million each, or one bypass at £90 million. It chooses the bypass. (a) Calculate how many clinics the £90 million could have funded. [2] (b) Advisers say the colleges were the next best option. State the opportunity cost of the bypass. [1] (c) Explain why opportunity cost helps the government more than the money cost here. [2]

10. Amir has a free five-hour Saturday. A shift pays £8 an hour. He values a football match with friends at £35 and a revision session at £28. (a) Calculate his earnings from the shift. [1] (b) Assuming football is his next best option, state the opportunity cost of working. [1] (c) Explain whether Amir should take the shift. [4]

11. A farmer in Region F (illustrative) has 12 hectares. Profit per hectare is £640 for barley, £820 for maize and £1,040 for an orchard. (a) Calculate profit if all 12 hectares become an orchard. [1] (b) Calculate the change in profit if 5 hectares move from barley to orchard. [2] (c) If all 12 hectares become an orchard, state the opportunity cost in £, taking maize as the next best use. [1] (d) Explain one reason why the farmer might not plant an orchard on all the land. [2]

12. Country C (illustrative) can afford only one project. Estimates in £ million: a school has benefits of 95 and costs of 62; a flood barrier has benefits of 88 and costs of 52. Evaluate which project the government should choose. [9]

Answers

1. (a) A need is essential for survival and health [1]; a want is desirable but a person can do without it [1]. (b) Technology or social change can make a product normal and widely used [1]; going without it then puts a person at a real disadvantage, for example a broadband connection for job applications [1]. [4] Examiner insight: “Explain” answers gain credit when the reason is linked to the consequence; naming broadband alone is only an example.

2. Orchard hired by a grower: land, rent [1]. Mixing machine: capital, interest paid to the lender [1]. Bus driver: labour, wages [1]. Stall owner: enterprise, profit [1]. [4] Examiner insight: Each case needs the factor and its matching reward; giving rent for labour or interest for land loses the pair.

3. Wheat or houses: what to produce [1]. Dug by hand or machine: how to produce [1]. Dental care for children or everyone: who is to benefit [1]. [3] Examiner insight: Look at the verb in each statement: choosing between outputs is “what”, choosing between methods is “how”, and choosing between recipients is “who”.

4. Consumers and producers: consumers supply labour and receive wages [1], then spend that income on goods that producers sell, which gives the producers revenue [1]. Government and producers: government can tax producers’ profits or sell them a licence [1], or it can set rules or pay a subsidy, which changes what firms produce and charge [1]. [4] Examiner insight: Strong answers state the flow in both directions and say what it changes, rather than only naming the groups.

5. In economics, capital means man-made physical goods used to produce other goods and services, not money [1]. The shop might own a freezer [1] and a till or delivery van [1]. [3] Examiner insight: Two examples must be physical goods used in production; stock for resale does not fit.

6. (a) Posters: 2 × 25 = 50 [1]. Leaflets given up: 2 × 70 = 140 [1]. (b) 70 / 25 [1] = 2.8 leaflets per poster [1]. [4] Examiner insight: Write the unit with each answer; a bare 2.8 leaves it unclear what is being compared.

7. (a) Payments: 1,500 + 4,200 + 300 + 3,000 = 9,000 [1]. Profit: 12,000 - 9,000 = £3,000 [1]. (b) 3,000 / 12,000 × 100 = 25% [1]. (c) Rent is the reward to land [1]; wages are the reward to labour [1]. [5] Examiner insight: Do not treat interest or materials as profit; profit is what is left after every payment is subtracted.

8. Resources are limited in supply [1]. Human wants are unlimited [1]. Therefore not every want can be satisfied, so choices must be made [1]. Each choice means giving up something else, which is the opportunity cost [1]. [4] Examiner insight: Linking the four ideas in a chain is stronger than listing “limited resources, unlimited wants” and stopping.

9. (a) 90 / 30 [1] = 3 clinics [1]. (b) Two colleges [1]. (c) All three options cost the same £90 million, so money cost cannot separate them [1]. Opportunity cost shows what the community loses in services, which is what the decision actually turns on [1]. [5] Examiner insight: State the opportunity cost as the forgone item itself, with its quantity, not as a sum of money.

10. (a) 5 × 8 = £40 [1]. (b) The football match, valued at £35 [1]. (c) The shift earns £40, which exceeds the £35 value of football by £5 [1], so on the figures alone, Amir should work [1]. However, the margin is small and the values are his own estimates [1]. Non-financial factors such as tiredness, friendship or time for revision could outweigh £5, so the decision depends on how he ranks them [1]. [6] Examiner insight: Reaching a decision after weighing both sides is stronger than computing the numbers alone.

11. (a) 12 × 1,040 = £12,480 [1]. (b) Gain: 5 × 1,040 = 5,200 [1]. Loss: 5 × 640 = 3,200. Change = +£2,000 [1]. (c) 12 × 820 = £9,840 [1]. (d) An orchard may need money to buy trees and several years before it gives any profit [1], so the farmer could face cash problems or risk if the profit estimate is wrong [1]. [6] Examiner insight: A reason on its own is only a statement; linking it to its effect on the farmer’s decision is what makes it an explanation.

12. School: net benefit 95 - 62 = £33m [1]. Barrier: 88 - 52 = £36m [1]. The barrier is higher by £3m [1], so on money alone it is better, and its opportunity cost is the school’s net benefit of £33m [1]. The difference is small compared with the estimates being used, which may be wrong [1]. A school’s benefits, such as skills and long-term earnings, are hard to price, and flood protection may rely on unpredictable events [1]. Different groups gain: children and families from the school, residents and businesses from the barrier [1]. The government cannot afford both, so scarcity forces a choice [1]. Conclusion: it could choose the barrier if it trusts the figures and the flood risk is high; otherwise the school is defensible [1]. [9] Examiner insight: A conclusion that states the choice and the condition it depends on tends to be more convincing than the calculations alone.

Where marks are usually lost

• Treating opportunity cost as the money spent rather than the best option given up.
• Naming all alternatives as the opportunity cost.
• Treating capital as cash.
• Mixing up the matching rewards for land, labour, capital and enterprise.
• Answering “explain” with an example and no reason.
• Leaving out units, for example loaves, leaflets or £.
• Giving a calculation answer with no decision or evaluation when one is asked for.
• Writing about needs and wants as fixed, with no reference to time or circumstances.

Next steps

• Revise with the revision notes and the study guide.
• Tick off topics on the printable checklist and see the course hub.
• Take our free 10-minute diagnostics.
• Book a free trial class: /trial/.

Official syllabus

Source: the AQA GCSE Economics specification (8136), Version 1.0, published by AQA, for first teaching from September 2017. This page follows section 3.1.1, Economic foundations.