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Grade 10 Basic Economic Problem

Economics practice questions and a worked example

Every economy has to deal with scarcity -- unlimited wants competing for limited resources -- and Grade 10's Basic Economic Problem topic works through how that forces choices and opportunity cost. The real exam questions collected here also cover the human-rights and environmental side of the problem: how production decisions can improve living standards or cause pollution, and how South Africa's Constitution protects citizens from some of the trade-offs a market makes on its own.

Worked example

HUMAN RIGHTS AND THE ECONOMY With the adoption of our Constitution, South Africans gained many rights that had previously been withheld from them. These rights are enshrined in our Bill of Rights and our Constitution; they affect us and the economy every day. Growth in the economy means that the lives of South Africans will improve. Increased industry leads to increased pollution -- factories pollute the air, rivers, soil and use up many of the earth's natural resources such as coal, oil, wood and water. (www.google.com) 3.3.5 Differentiate between the right to basic education and the right to basic standard of living.

Answer & explanation

The right to basic education allows all South Africans to learn skills and obtain training to help them get jobs. The right to a basic standard of living ensures that the government improves living conditions and provides houses, pensions, food, and healthcare for all.

The right to basic education ensures that all South Africans have access to learning opportunities. This right is crucial for acquiring skills and training that can lead to employment, thereby improving individual economic prospects. On the other hand, the right to a basic standard of living focuses on ensuring that everyone has access to essential services and goods. This includes housing, food, healthcare, and pensions, which are necessary for maintaining a decent quality of life. Together, these rights aim to improve both individual and societal well-being.

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Basic Economic Problem

Question 1 of 3

Scarcity Scarcity, or limited resources, is one of the most basic economic problems we face. We run into scarcity because while resources are limited, we are a society with unlimited wants. Therefore, we have to choose. We have to make trade-offs. We have to efficiently allocate resources. We have to do those things because resources are limited and cannot meet our own unlimited demands. Without scarcity, the science of economics would not exist. Economics is the study of production, distribution, and consumption of goods and services. Society would produce, distribute, and consume an infinite amount of everything to satisfy the unlimited wants and needs of humans. The decisions and trade-offs society makes due to scarcity is what economists study. Why certain decisions are made and what is the next best alternative that was forgone? (Source: www.google.com) 2.3.1 According to the extract above, what are the solutions to the economic problem?

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Common mistakes

Treating scarcity as the same thing as poverty -- scarcity is a universal condition (even a wealthy economy has limited resources against unlimited wants), not a description of a poor country. Learners also often give opportunity cost as "what you give up" without naming the specific next-best alternative the question is actually asking for.

Grade 10 Basic Economic Problem

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