IGCSE Economics (9–1) 0987 · Topic 2

The allocation of resources: past paper questions

144 real questionsasked in 9 of the last 10 exam series2020–2025usually: Explain, Discuss, Analyse, Draw, Identify

Real questions on the allocation of resources

The newest 20 of 53 written questions, plus 91 multiple-choice. Open one to see it on the real paper.

0987/22 · October/November 2025 · Q1e[4]
Draw a demand and supply diagram to show the effect of a decrease in population on the market for furniture.
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0987/22 · October/November 2025 · Q2a[2]
Define market equilibrium.
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0987/22 · October/November 2025 · Q2c[6]
Analyse how price elasticity of demand can influence a firm’s pricing decisions.
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0987/21 · May/June 2025 · Q1b[2]
Identify two external benefits of rainforests.
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0987/21 · May/June 2025 · Q1e[4]
Draw a demand and supply diagram to show the effect of the discovery of new gold deposits on the market for gold.
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0987/21 · May/June 2025 · Q2c[6]
Analyse the influences on whether demand for shoes is elastic or inelastic.
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0987/21 · May/June 2025 · Q2d[8]
Discuss whether or not a mixed economic system will benefit the people who live in that economy.
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0987/21 · May/June 2025 · Q3c[6]
Analyse how changes in conditions of supply can affect a firm’s prices.
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0987/22 · May/June 2024 · Q1c[2]
Explain one reason why the Tunisian government regulates the price of flour and milk.
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0987/22 · May/June 2024 · Q1f[5]
Analyse, using a demand and supply diagram, how an increase in wage costs would affect the market for shoes.
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0987/22 · May/June 2024 · Q1g[6]
Discuss whether or not the Tunisian government should continue to subsidise electricity production.
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0987/22 · May/June 2024 · Q2d[8]
Discuss whether or not a government should encourage people to walk to school and work.
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0987/22 · May/June 2024 · Q3a[2]
Identify the difference between microeconomics and macroeconomics.
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0987/22 · May/June 2024 · Q5c[6]
Analyse the effect of an increase in demand for football shirts on demand for football shorts and demand for basketball shirts.
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0987/22 · October/November 2023 · Q1e[4]
Draw a demand and supply diagram to show how a report stating that bananas are good for health would affect the market for bananas.
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0987/22 · October/November 2023 · Q5b[4]
Explain how a market moves from disequilibrium to equilibrium.
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0987/21 · May/June 2023 · Q1d[4]
Explain two influences on the price elasticity of supply of coal.
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0987/21 · May/June 2023 · Q1e[4]
Draw a demand and supply diagram to show how setting a maximum price below the equilibrium price will affect a market.
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0987/21 · May/June 2023 · Q2b[4]
Explain how improved education may affect the demand for cigarettes and for fresh fruit.
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0987/21 · May/June 2023 · Q4b[4]
Explain, with examples, the difference between a merit good and a public good.
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What examiners said

Some candidates wrote long explanations of the diagram they had drawn. No explanation was needed. The instruction to ‘Draw a demand and supply diagram to show…’ should indicate to a candidate that they just need to draw a relevant diagram. The diagrams provided varied in accuracy. A disappointing number of candidates confused the demand and supply curves. Other candidates did not accurately show...
— Examiner report, October/November 2023, 0987/22 Q1(e) (Cambridge)

There were some excellent answers. These gave a precise and accurate explanation of how a market may move from equilibrium to disequilibrium. Some candidates, however, appeared confused as to how to answer this question and wrote about, for example, a government setting a maximum and minimum price.
— Examiner report, October/November 2023, 0987/22 Q5(b) (Cambridge)

There were a limited number of correct answers in response to this question. The main reason for this was that the answers given related to elasticity of demand rather than supply e.g. ‘Demand is a key factor in determining the elasticity of supply of coal.’ Often, candidates were able to select storage and construction of a new mine as relevant influences affecting elasticity of supply, but then...
— Examiner report, May/June 2023, 0987/21 Q1(d) (Cambridge)

Practise this topic

Answer these questions online and get each one marked against the official mark scheme, with what you missed and how to fix it.

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In the syllabus

1 0455.2.1.1 — microeconomics The difference between microeconomics and.

microeconomics The difference between microeconomics and.
macroeconomics macroeconomics and the decision makers involved in each.

2 0455.2.1.2 — macroeconomics macroeconomics and the decision makers involved in each.

macroeconomics macroeconomics and the decision makers involved in each.

3 0455.2.2.1 — the market system How a market system works; including buyers, sellers, allocation of scarce resources, market equilibrium, and market diseq

the market system How a market system works; including buyers, sellers, allocation of scarce resources, market equilibrium, and market disequilibrium.
key resources allocation decisions Establishing that the economic problem creates three key questions about determining resource allocation – what to produce, how, and for whom.
introduction to the price mechanism How the price mechanism provides answers to these key allocation questions.

4 0455.2.2.2 — key resources allocation decisions Establishing that the economic problem creates three key questions about determining resource allocation

key resources allocation decisions Establishing that the economic problem creates three key questions about determining resource allocation – what to produce, how, and for whom.

5 0455.2.2.3 — introduction to the price mechanism How the price mechanism provides answers to these key allocation questions.

introduction to the price mechanism How the price mechanism provides answers to these key allocation questions.

6 0455.2.3.1 — definition of demand Definition, drawing and interpretation of appropriate diagrams.

definition of demand Definition, drawing and interpretation of appropriate diagrams.
price, demand and quantity A demand curve to be drawn and used to illustrate movements along a demand curve with appropriate terminology, for example extensions and contractions in demand.
individual and market demand The link between individual and market demand in terms of aggregation.
conditions of demand The causes of shifts in a demand curve with appropriate terminology, for example increase and decrease in demand.

7 0455.2.3.2 — price, demand and quantity A demand curve to be drawn and used to illustrate movements along a demand curve with appropriate terminology, fo

price, demand and quantity A demand curve to be drawn and used to illustrate movements along a demand curve with appropriate terminology, for example extensions and contractions in demand.

8 0455.2.3.3 — individual and market demand The link between individual and market demand in terms of aggregation.

individual and market demand The link between individual and market demand in terms of aggregation.

9 0455.2.3.4 — conditions of demand The causes of shifts in a demand curve with appropriate terminology, for example increase and decrease in demand.

conditions of demand The causes of shifts in a demand curve with appropriate terminology, for example increase and decrease in demand.

10 0455.2.4.1 — definition of supply Definition, drawing and interpretation of appropriate diagrams.

definition of supply Definition, drawing and interpretation of appropriate diagrams.
price, supply and quantity A supply curve to be drawn and used to illustrate movements along a supply curve with appropriate terminology, for example extensions and contractions in supply.
individual and market supply The link between individual and market supply in terms of aggregation.
conditions of supply The causes of shifts in a supply curve with appropriate terminology, for example increase and decrease in supply.

11 0455.2.4.2 — price, supply and quantity A supply curve to be drawn and used to illustrate movements along a supply curve with appropriate terminology, fo

price, supply and quantity A supply curve to be drawn and used to illustrate movements along a supply curve with appropriate terminology, for example extensions and contractions in supply.

12 0455.2.4.3 — individual and market supply The link between individual and market supply in terms of aggregation.

individual and market supply The link between individual and market supply in terms of aggregation.

13 0455.2.4.4 — conditions of supply The causes of shifts in a supply curve with appropriate terminology, for example increase and decrease in supply.

conditions of supply The causes of shifts in a supply curve with appropriate terminology, for example increase and decrease in supply.

14 0455.2.5.1 — market equilibrium Definition, drawing and interpretation of demand and supply schedules and curves used to establish equilibrium price and

market equilibrium Definition, drawing and interpretation of demand and supply schedules and curves used to establish equilibrium price and sales in a market.
market disequilibrium Definition, drawing and interpretation of demand and supply schedules and curves used to identify disequilibrium prices and shortages (demand exceeding supply) and surpluses (supply exceeding demand).

15 0455.2.5.2 — market disequilibrium Definition, drawing and interpretation of demand and supply schedules and curves used to identify disequilibrium price

market disequilibrium Definition, drawing and interpretation of demand and supply schedules and curves used to identify disequilibrium prices and shortages (demand exceeding supply) and surpluses (supply exceeding demand).

16 0455.2.6.1 — causes of price changes Changing market conditions as causes of price changes.

causes of price changes Changing market conditions as causes of price changes.
consequences of price changes Demand and supply diagrams to be used to illustrate these changes in market conditions and their consequences for equilibrium price and sales.

17 0455.2.6.2 — consequences of price changes Demand and supply diagrams to be used to illustrate these changes in market conditions and their consequences

consequences of price changes Demand and supply diagrams to be used to illustrate these changes in market conditions and their consequences for equilibrium price and sales.

18 0455.2.7.1 — definition of PED.

definition of PED.
calculation of PED Calculation of PED using the formula and interpreting the significance of the result. Drawing and interpretation of demand curve diagrams to show different PED.
determinants of PED The key influences on whether demand is elastic or inelastic.
PED and total spending on a product/ The relationship between PED and total spending revenue on a product/revenue, both in a diagram and as a calculation.
significance of PED The implications for decision making by consumers, producers and government.

19 0455.2.7.2 — calculation of PED Calculation of PED using the formula and interpreting the significance of the result. Drawing and interpretation of deman

calculation of PED Calculation of PED using the formula and interpreting the significance of the result. Drawing and interpretation of demand curve diagrams to show different PED.

20 0455.2.7.3 — determinants of PED The key influences on whether demand is elastic or inelastic.

determinants of PED The key influences on whether demand is elastic or inelastic.

21 0455.2.7.4 — PED and total spending on a product/ The relationship between PED and total spending revenue on a product/revenue, both in a diagram and as

PED and total spending on a product/ The relationship between PED and total spending revenue on a product/revenue, both in a diagram and as a calculation.

22 0455.2.7.5 — significance of PED The implications for decision making by consumers, producers and government.

significance of PED The implications for decision making by consumers, producers and government.

23 0455.2.8.1 — definition of PES.

definition of PES.
calculation of PES Calculation of PES using the formula and interpreting the significance of the result. Drawing and interpretation of supply curve diagrams to show different PES.
determinants of PES The key influences on whether supply is elastic or inelastic.
significance of PES The implications for decision making by consumers, producers and government.

24 0455.2.8.2 — calculation of PES Calculation of PES using the formula and interpreting the significance of the result. Drawing and interpretation of suppl

calculation of PES Calculation of PES using the formula and interpreting the significance of the result. Drawing and interpretation of supply curve diagrams to show different PES.

25 0455.2.8.3 — determinants of PES The key influences on whether supply is elastic or inelastic.

determinants of PES The key influences on whether supply is elastic or inelastic.

26 0455.2.8.4 — significance of PES The implications for decision making by consumers, producers and government.

significance of PES The implications for decision making by consumers, producers and government.

27 0455.2.9.1 — definition of market economic system.

definition of market economic system.
advantages and disadvantages of the market Including examples of how it works in a variety of economic system different countries.

28 0455.2.9.2 — advantages and disadvantages of the market Including examples of how it works in a variety of economic system different countries.

advantages and disadvantages of the market Including examples of how it works in a variety of economic system different countries.

29 0455.2.10.1 — definition of market failure The key terms associated with market failure: public good, merit good, demerit good, social benefits, external

definition of market failure The key terms associated with market failure: public good, merit good, demerit good, social benefits, external benefits, private benefits, social costs, external costs, private costs.
causes of market failure With respect to public goods, merit and demerit goods, external costs and external benefits, abuse of monopoly power and factor immobility. Examples of market failure with respect to these areas only.
consequences of market failure The implications of misallocation of resources in respect of the over consumption of demerit goods and goods with external costs, and the under consumption of merit goods and goods with external benefits. Note: demand and supply diagrams relating to market failure are not required.

30 0455.2.10.2 — causes of market failure With respect to public goods, merit and demerit goods, external costs and external benefits, abuse of monopoly powe

causes of market failure With respect to public goods, merit and demerit goods, external costs and external benefits, abuse of monopoly power and factor immobility. Examples of market failure with respect to these areas only.

31 0455.2.10.3 — consequences of market failure The implications of misallocation of resources in respect of the over consumption of demerit goods and goods

consequences of market failure The implications of misallocation of resources in respect of the over consumption of demerit goods and goods with external costs, and the under consumption of merit goods and goods with external benefits. Note: demand and supply diagrams relating to market failure are not required.

32 0455.2.11.1 — definition of the mixed economic system.

definition of the mixed economic system.
government intervention to address market Definitions, drawing and interpretation of failure appropriate diagrams showing the effects of three government microeconomic policy measures: maximum and minimum prices in product, labour and foreign exchange markets; indirect taxation; and subsidies. The implications of other government microeconomic policy measures: regulation; privatisation and nationalisation; and direct provision of goods. The effectiveness of government intervention in overcoming the drawbacks of a market economic system.

33 0455.2.11.2 — government intervention to address market Definitions, drawing and interpretation of failure appropriate diagrams showing the effects of thr

government intervention to address market Definitions, drawing and interpretation of failure appropriate diagrams showing the effects of three government microeconomic policy measures: maximum and minimum prices in product, labour and foreign exchange markets; indirect taxation; and subsidies. The implications of other government microeconomic policy measures: regulation; privatisation and nationalisation; and direct provision of goods. The effectiveness of government intervention in overcoming the drawbacks of a market economic system.

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