cameroon gce advanced level June 2022 economics 3

cameroon gce advanced level June 2022 economics 3

cameroon gce advanced level June 2022 economics 3

1. This question is based on the passage below:
. ‘’In all societies people want more than they arc capable o ( producing. At any given moment in time the supply ot
economic resources is limited.so that more of one thing can be produced only if less-pf something else is produced.
Likewise, incomes arc limited and in spending our incomes we have to choose between alternatives. Economists use
the term “opportunity cost” to describe the idea of measuring cost in terms of the alternatives forgone. This is a
very important concept. We have to make choices all the time. We have to decide how we speiid our time, how we;
spend our incomes and what employment we undertake
Producers and governments also have to make choices. A producer must decide what goods to produce and which
resources to employ. For example, a farmer opting to use an area of land (or growing corn has chosen not to use it
for another purpose1 e.g.fkeeping sh&ep. In growing the corn, lie has the choice ol using labour intensive or capitalintensive methods.Governments also have to consider the opportunity cost of any decision they make. ‘I he real cost
of building a hospital is not the cost in terms of money but cost in terms of the alternative uses of the resources i.e.

the opportunity cost”.
Source: Adapted from Stanlake’s Introductory Economics, 7!1’.Edition. Page 9..
a) Define:

economic resources,
opportunity cost.
1 low is opportunity cost related to choice?
Why is opportunity cost considered more important than cost measured in monetary terms?
)
d) i) Give two examples of the possible opportunity cost of government building a new hospital.
ii) What is another name for opportunity cost?
Why do consumers, producers and governments have to make choices?
Distinguish between labour intensive and capital-intensive methods of production mentioned in the passage.
(4 marks)