These ten questions cover the five lessons in specialisation and allocation. They go from easy to harder.
Write your answer first, then open the working. All businesses and economies are fictional, and all figures balance.
Record any slips in the mistake log so you can retest them later.
Questions
1. (Easy) Define specialisation and give one example from a workplace.
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Specialisation is when a worker, firm or country focuses on a limited range of tasks or products, usually where its opportunity cost is lowest. Example: in a clinic, one person handles reception while another handles lab tests, so each becomes quicker at one job.
2. (Easy) At Kayu Senja workshop, each of 3 workers makes 6 chairs a day alone. After the work is split into cutting, assembling and finishing, the workshop makes 24 chairs a day. By what percentage does output per worker rise?
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Before: 6 chairs per worker (18 in total). After: 24 ÷ 3 = 8 chairs per worker. Increase = (8 − 6) ÷ 6 × 100 = 33.3%.
3. (Easy) In one day, Tamara can produce 60 tonnes of wheat or 30 tonnes of coffee. Veloria can produce 40 tonnes of wheat or 40 tonnes of coffee. Which country has the lower opportunity cost of coffee?
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Tamara gives up 60 ÷ 30 = 2 tonnes of wheat per tonne of coffee. Veloria gives up 40 ÷ 40 = 1 tonne of wheat. Veloria has the lower opportunity cost of coffee.
4. (Medium) Using question 3, compare total output when each country splits its day equally between the two goods with the output when each specialises according to its lower opportunity cost.
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Split: Tamara 30 wheat and 15 coffee; Veloria 20 wheat and 20 coffee. Total 50 wheat and 35 coffee.
Specialised: Tamara 60 wheat; Veloria 40 coffee.
Change: +10 wheat and +5 coffee.
5. (Medium) A fictional town has 3,000 jobs and 2,100 of them are at one factory. The factory cuts one third of its jobs. How many town jobs are lost, and what percentage of all town jobs is that?
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One third of 2,100 = 700 jobs. 700 ÷ 3,000 × 100 = 23.3% of all jobs (to 1 decimal place).
6. (Medium) A tourist island earns 50 million tala. Visitor spending falls 20%, then the next year rises 20%. Is the island back at 50 million? Explain.
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After the fall: 50 × 0.80 = 40 million. After the rise: 40 × 1.20 = 48 million. No, it is 2 million short, because the 20% rise is applied to a smaller base. This is why the percentage-base explorer shows the base at each stage.
Questions 7 and 8 use this schedule for eggs at the fictional Pasar Tanjung.
| Price per tray (RM) | Quantity demanded (trays) | Quantity supplied (trays) |
|---|---|---|
| 2 | 80 | 20 |
| 3 | 70 | 40 |
| 4 | 60 | 60 |
| 5 | 50 | 80 |
| 6 | 40 | 100 |
7. (Medium) Find the equilibrium. A maximum price of RM3 is then set. State the shortage and the number of trays sold.
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Equilibrium: RM4, 60 trays. At RM3: demand 70, supply 40. Shortage = 70 − 40 = 30 trays. Only 40 trays are sold, because supply limits trade.
8. (Harder) A minimum price of RM5 is set instead. State the surplus, then explain why a maximum price of RM5 would have no effect.
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At RM5: demand 50, supply 80. Surplus = 30 trays, with 50 trays sold.
A maximum price of RM5 is above the RM4 equilibrium, so it does not bind and the market can still settle at RM4.
9. (Harder) A fictional job platform records how many drivers will work at different pay rates: 30 drivers at RM10 per hour, 36 at RM12, 42 at RM14. Describe the incentive when pay rises from RM12 to RM14 using percentages. Is this a movement along or a shift of the schedule?
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Pay rises by RM2, which is 2 ÷ 12 × 100 = 16.7%. Drivers willing to work rise from 36 to 42, which is 6 ÷ 36 × 100 = 16.7%. A higher wage makes the job more attractive, so more drivers are willing to work.
Because pay itself changed, it is a movement along the schedule.
10. (Harder) For the egg schedule above, name one group of people and one cost or factor the model leaves out, and explain how each could change the conclusion about a maximum price.
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Group: egg farmers who might leave the market if they cannot cover costs at RM3, which could make the shortage larger than 30 trays.
Factor: the time buyers spend queuing, or a fall in egg quality. These costs are not in the table, so buyers may gain less from the lower price than the figures suggest.
If you got these wrong
- Questions 1 to 4, or output and opportunity cost slips: return to explaining a productivity gain from specialisation.
- Questions 5 and 6, or percentages of the wrong base: read identifying a possible dependency cost.
- Questions 7 and 8, or confusion over what is traded: revisit market allocation and price control.
- Question 9, or describing a shift instead of a movement: study describing an incentive from a supplied model.
- Question 10, or vague evaluation: practise stating who and what a model leaves out.
The ratios tool can help check percentage working. For the wider route, see the Economics learning guide.
If a particular error type keeps returning, our teachers can build a short run of new questions around it through online one-to-one Economics tuition.