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ECON 123 Edexcel A Level Economics Revision Guide updated 2022
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ECON 123 Edexcel A Level Economics Revision Guide updated 2022
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A-LEVEL ECONOMICS
REVISION FLASH CARDS
Edexcel A
, THEME 1 :
MICRO
Introduction to Markets and Market
PAPER 1 Failures
THEME 1.1 NATURE OF ECONOMICS
POSITIVE & NORMATIVE STATEMENTS
Positive
• Statements that are subjective
Normative • Based on opinions, judgements
and emotion
• Cannot be proven or disproven
NOTE: This is the basis for selecting sentences in the extracts within the data
response section (Section B) of exam questions (see Exam Guide).
,THEME 1.1 NATURE OF ECONOMICS
PRODUCTION POSSIBILITY FRONTIER (PPF)
Maximum productive potential of an economy when CRITICAL ASSUMPTIONS
resources are both fully and efficiently employed • Resources are fixed
- to produce a combination of goods (assumed to be • Technology doesn’t change (is constant)
capital and consumer goods) • Without these assumptions, the PPF is able to
shift
IMPLICATION
• If PPF shifts (outwards or inwards), it’s the
result of a change in technology, or a change
in the quality or quantity of resources, our 2
assumptions above.
• Change in the quantity of resources or technol-
ogy can be caused by any number of factors,
such as:
‐ Natural disasters - flooding, wildfires
‐ Migration - brain drain
‐ Fall in education spending - resulting in
a less skilled workforce
‐ War
MOVEMENTS VERSUS SHIFT IN PPF
• Any point inside the curve such as ‘A’ is achievea- • Movements along the PPF are due to a change
ble but not efficient, as the country is not maxim- in the combination of goods produced
ising its productive potential. • If the PPF shifts outwards or inwards, it is due
• Any point outside the curve such as ‘B’ is unattain- to a change in the productive potential of the
able; the country does not have enough resources economy - which itself is caused by a change in
to achieve that lebel of production. either the amount of resources or technology
available
, THEME 1.1 NATURE OF ECONOMICS
SPECIALISATION OF LABOUR
Specialisation is the production of a limited range of products or services by a firm. To achieve this, workers
are made to specialise in one particular area of the production process.
Notable economists: Adam Smith
Specialisation of Labour Specialisation in Goods and
Services Produced
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