Edexcel A-level Economics Theme 1-4
Exam 2024 Questions and Answers
100% pass
Economics - Answer>>The study of the allocation of
scarce resources.
Economic Goods - Answer>>Resources that are scarce.
Short Run - Answer>>A time period where at least one
factor of production is fixed.
Long Run - Answer>>A time period where all factors of
production are variable.
Productivity - Answer>>The output per unit of input.
The Economic Problem - Answer>>Resources are
scarce but wants are infinite.
Scarcity - Answer>>The world's resources are limited,
there are only limited amounts of land, water, oil, food,
etc..
Therefore, resources are scarce.
Free Goods - Answer>>Goods that are unlimited in
supply and therefore have no opportunity cost.
Economic Agents - Answer>>Consumer, Business and
Governments.
Agents involved in Economic transactions.
,Production Possibility Frontier - Answer>>The maximum
potential output of a combination of goods an economy
can achieve when all its resources are fully and efficiently
employed, given the level of technology.
Opportunity Cost - Answer>>The next best alternative
foregone.
Economic Growth - Answer>>Increase an economy's
productive potential.
Capital Goods - Answer>>Goods intended for use in
production, rather than by consumers.
Consumer Goods - Answer>>Goods designed for use
by final consumers.
Renewable Resources - Answer>>A resource whose
stock level can be replenished naturally over a period of
time.
Non-renewable Resources - Answer>>A resource
whose stock level decreases over time as it is consumed.
Ceteris Paribus - Answer>>'All other things (factors)
remaining the same'
The assumption that all other variables within a model
remain constant whilst the change is being considered.
,Positive Statement - Answer>>A statement based on
facts which can be tested as true or false and are value-
free.
Normative Statement - Answer>>A statement based on
value judgements which cannot be tested as true or false.
Adam Smith - Answer>>The Father of Economics;
- The Invisible Hand (workings of the Price Mechanism)
- Specialisation
- Division of Labour
Division of Labour - Answer>>Specialisation of workers
on specific tasks in the production process.
Specialisation - Answer>>The process of breaking down
the production process into steps and then each worker is
assigned a step. This would then increase labour
productivity (Output per Worker).
Barter - Answer>>An exchange of goods/services for
other goods/services.
- Does not involve money.
- Double coincidence of wants.
Money - Answer>>Anything which is acceptable to a
wide number of people and organisations as payment for
goods and services.
, Free Market Economy - Answer>>Where all resources
are privately owned and allocated via the price
mechanism. There is minimal government intervention.
Command Economy - Answer>>Where there is public
ownership of resources and these are allocated by the
government.
Mixed Economy - Answer>>Where some resources are
owned and allocated by the private sector and some by
the public sector.
Market - Answer>>A channel where goods and services
are exchanged.
Utility - Answer>>The capacity of a good or service to
satisfy some human want.
Rational Decision Making - Answer>>Where consumers
allocate their expenditure on goods and services to
maximize utility, and producers allocate their resources to
maximize profits.
Demand - Answer>>The quantity of goods or services
that will be bought at any given price over a period of time.
Demand Curve - Answer>>Shows the quantity of a good
or service that would be bought over a range of different
price levels in a given period of time.
Slopes downward - Price and Quantity have an inverse
(negative) relationship.
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