The market price of timber rises because furniture makers want more of it. What signal does this give timber producers?
Resources should move away from timber into less valuable uses
The government must now become the only timber supplier
There is an incentive to direct more resources towards supplying timber
Timber has stopped being scarce and no production is needed
84 exam-style questions on AQA GCSE Economics 1.2 Resource allocation, covering 1.2.1a Markets, 1.2.1b Allocation of resources, 1.2.1c Factor and product markets, 1.2.2a Primary, secondary and tertiary sectors, 1.2.2b Goods and services, 1.2.3a Specialisation and the division of labour, 1.2.3b How and why producers specialise, and 1.2.3c Costs and benefits of the division of labour. Each one has a worked solution and a mark scheme showing where the marks go.