The Undercover Economist Strikes Back: A GCSE Quiz

Test Your Knowledge of Tim Harford's Economic Insights

Based on the book The Undercover Economist Strikes Back by Tim Harford, this GCSE-level quiz will assess your comprehension of key economic concepts and their real-world applications. The questions cover a range of topics, including scarcity and trade-offs, marginal thinking, the price mechanism, information asymmetry, incentives, game theory, externalities, and the role of government.

Section 1: Scarcity and Trade-offs

1. According to Harford, what is the fundamental economic problem that arises due to scarcity?
2. Explain the concept of opportunity cost using an example from the book.

Section 2: Marginal Thinking

1. What does Harford mean by 'thinking at the margin'? Provide an example from the book.
2. How can marginal thinking help individuals make better decisions?

Section 3: The Price Mechanism

1. Describe the role of prices in allocating scarce resources, according to Harford.
2. Using an example from the book, explain how the price mechanism can lead to efficient outcomes.

Section 4: Information Asymmetry

1. What is information asymmetry, and why is it a problem in markets?
2. Discuss one of the examples Harford uses to illustrate the consequences of information asymmetry.

Section 5: Incentives

1. How does Harford argue that incentives shape human behavior?
2. Provide an example from the book where incentives led to unintended consequences.

Section 6: Game Theory

1. What is game theory, and how does Harford apply it to economic situations?
2. Describe one of the game theory examples used in the book and its implications.

Section 7: Externalities

1. Define what an externality is and provide an example from the book.
2. Explain how externalities can lead to market failures, according to Harford.

Section 8: The Role of Government

1. What does Harford say about the potential role of government in addressing market failures?
2. Critique one of the government interventions discussed in the book using economic principles.

This quiz covers a wide range of economic concepts and their real-world applications as discussed in Tim Harford's The Undercover Economist Strikes Back. By answering these questions, you will demonstrate your understanding of the book's main arguments and insights.