Neco 2019 Economics Question 1

Practice essay / theory question 1 from the 2019 Neco Economics examination. This question covers Scarcity, Opportunity Cost, Production Possibility Frontier .

Neco 2019 Economics Essay / Theory

Topics: Scarcity Opportunity Cost Production Possibility Frontier

Question 1 NECO • 2019 • ECONOMICS • essay

An economy produces only two commodities: rice and cloth. With the resources currently available, the maximum combinations of output are shown in the table below. | Rice (tonnes) | Cloth (units) | |---------------|---------------| | 0 | 100 | | 40 | 80 | | 80 | 40 | | 120 | 0 | Using this information, answer the following:

Question Parts

( a )

Explain, with reference to the table, the meaning of scarcity in this economy.

( b )

Define opportunity cost. Then calculate the opportunity cost of increasing rice production from 40 tonnes to 80 tonnes.

( c )

Sketch a Production Possibility Frontier (PPF) for the economy using the data in the table. Briefly describe what a point inside the curve, a point on the curve, and a point outside the curve each represent.

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About This Question

This is Neco 2019 Economics Question 1. It is one of the essay questions from the 2019 Neco Economics examination.

The question covers Scarcity, Opportunity Cost, Production Possibility Frontier .

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