The Undercover Economist Strikes Back: A GCSE Economics Quiz

Test your understanding of Tim Harford's The Undercover Economist Strikes Back

Tim Harford's engaging book explains essential economic concepts through real-world examples and stories. This quiz will assess your comprehension of key ideas like scarcity, marginal thinking, incentives, and more.

Scarcity and Trade-offs

1. According to Harford, what is the fundamental economic problem that all societies face? Provide an example from the book that illustrates this concept.
2. Describe a situation where you have to make a trade-off between two desirable alternatives. How does the idea of opportunity cost relate to your example?

Marginal Thinking

1. What does it mean to 'think at the margin'? Give an example from the book that demonstrates marginal analysis.
2. How could a small business owner apply marginal thinking to make better decisions? Provide a hypothetical scenario.

The Price Mechanism

1. Explain how prices act as signals in a market economy, using a specific example from Harford's work.
2. What might happen if prices are artificially kept too high or too low? Discuss the consequences with reference to a real-world case study from the book.

Information Asymmetry

1. Define the term 'information asymmetry' and describe a situation where it commonly arises.
2. How does Harford suggest asymmetric information problems can be overcome? Provide an example from the text to support your answer.

Incentives

1. Why do incentives matter in economic decision-making? Use an illustration from the book to explain this concept.
2. Critique a real-world incentive scheme based on the ideas presented in The Undercover Economist Strikes Back. How could it be improved?

Game Theory

1. What core principles does game theory aim to model? Give an example game described by Harford.
2. How might understanding game theory benefit businesses or policymakers? Discuss using relevant examples.

Externalities

1. Define what is meant by an economic 'externality' and distinguish between positive and negative cases.
2. Analyze a real-world externality issue outlined in the book. How does Harford recommend it could be addressed?

The Role of Government

1. According to Harford, what are some key economic roles and responsibilities of government?
2. Critically evaluate one of the government policies or interventions discussed in the text.

After answering the quiz questions, discuss Harford's overall perspective and writing style. What did you find most compelling or unconvincing about his economic arguments?