OCR A Level Economics Practice Questions With All Correct Answers

OCR A Level Economics Practice Questions With All Correct Answers normative statement - ANSWER an opinion that cannot be confirmed by referencing facts positive statement - ANSWER a statement that can be proved by referencing facts why are economic models used? - ANSWER theories cannot be tested in a controlled environment the basic economic problem - ANSWER scarcity - consumer wants are always greater than available resources opportunity cost - ANSWER the next best alternative foregone factors of production - ANSWER resources used by a firm in production list and define the factors of production - ANSWER labour - the human element, both mental and physical capital - man made aids to production eg technology land - any natural resource used in production enterprise - combining above factors to make a profit, risk taking how can a PPC be used? - ANSWER shows the efficiency of a firm and its maximum potential efficiency shows possible manufacturing combinations between two products and the opportunity cost of sacrificing each product demand - ANSWER amount of a product demanded by consumers who are willing and able to buy it at a certain price over a certain period of time define determinants of demand give examples - ANSWER factors that determine the demand for a product. consumer income, price of a substitute, quality, advertising, seasonal preference complementary good - ANSWER a good commonly purchased alongside another good competitive demand - ANSWER demand for alternative increases with price of original joint demand - ANSWER demand for complementary good decreases as price of original increases derived demand - ANSWER demand for a factor of production is influenced by demand for the product itself composite demand - ANSWER demand for a product comes from multiple groups of consumers