Neco Model Questions Vol1 2018 Economics Question 1

Practice essay / theory question 1 from the 2018 Neco Model Questions Vol1 Economics examination. This question covers Scarcity, Choice, Opportunity Cost, Production Possibility Frontier .

Neco Model Questions Vol1 2018 Economics Essay / Theory

Topics: Scarcity Choice Opportunity Cost Production Possibility Frontier

Question 1 NECO_MODEL_QUESTIONS_VOL1 • 2018 • ECONOMICS • essay

A small island economy can produce only two goods: fish and coconuts. If all resources are devoted to fish, the maximum output is 800 tonnes of fish per year. If all resources are devoted to coconuts, the maximum output is 400 tonnes of coconuts per year.

Question Parts

( a )

Explain the concepts of scarcity and choice using the information above.

( b )

Assuming the island operates on its production‑possibility frontier, calculate the opportunity cost of producing one (1) tonne of fish in terms of coconuts.

( c )

If the island decides to produce 500 tonnes of fish, determine the maximum amount of coconuts that can be produced. Then discuss how this decision illustrates the principle of opportunity cost.

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About This Question

This is Neco Model Questions Vol1 2018 Economics Question 1. It is one of the essay questions from the 2018 Neco Model Questions Vol1 Economics examination.

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

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