This GCSE/IGCSE Economics paper examines the fundamental economic problem of scarcity and how it forces individuals, firms, and governments to make choices. It explores the concepts of limited resources and unlimited wants, and how these drive the need for allocation decisions. The paper introduces opportunity cost as a key economic principle, explaining how it influences decision-making at various levels. Real-life examples are provided to illustrate how different economic agents prioritize their choices based on limited resources, and how opportunity costs are calculated in various scenarios. The paper also discusses the role of trade-offs and the impact of these decisions on both individual well-being and overall economic efficiency.
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