O-LevelEconomicsThe basic economic problem2281/11 · May/June 2015 · Q21 Mark

To help reduce the price of oil, new supplies are needed. However, in 2013, objectors opposed attempts to explore new sites because of the environmental damage the exploration might cause. How does this illustrate the basic economic problem?

AOil is a limited resource.

BOil is expensive.

CThe exploration involves demand and supply.

DThere are external costs involved in production.

✓ Correct answer

A: Oil is a limited resource.

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Topic: The basic economic problem, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2015 Paper 1 Variant 1, question 2.

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