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OCR A Level Economics With Complete Solutions Latest Update
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OCR A Level Economics With Complete SolutionsLatest Update
Normative statement - correct answers an opinion that cannot be confirmed by
referencing facts
positive statement - correct answers a statement that can be proved by
referencing facts
why are economic models used? - correct answers theories cannot be tested in a
controlled environment
the basic economic problem - correct answers scarcity - consumer wants are
always greater than available resources
opportunity cost - correct answers the next best alternative foregone
factors of production - correct answers resources used by a firm in production
list and define the factors of production - correct answers 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? - correct answers 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 - correct answers 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 - correct answers factors that determine the demand for a product.
consumer income, price of a substitute, quality, advertising, seasonal preference
complementary good - correct answers a good commonly purchased alongside
another good
competitive demand - correct answers demand for alternative increases with price
of original
joint demand - correct answers demand for complementary good decreases as
price of original increases
,derived demand - correct answers demand for a factor of production is influenced
by demand for the product itself
composite demand - correct answers demand for a product comes from multiple
groups of consumers
substitution effect - correct answers customers from a substitute product are
attracted by a lower price
real income effect - correct answers customers can afford to buy more items
alongside a lower priced item
diminishing marginal utility - correct answers extra utility gained from
consumption decreases as more is consumed
a movement up the demand cure means - correct answers contraction of demand,
a decrease
a movement down the demand curve means - correct answers extension of
demand, an increase
a shift left of the demand curve means - correct answers a decrease in demand
a shift right of the demand curve means - correct answers an increase in demand
, supply - correct answers the amount of a product a producer is willing and able to
sell at a certain price over a certain period of time
list some determinants of supply - correct answers price, availability of factors of
production
natural events
revenue generated by other products
consumer confidence
production technology
tax levels
equilibrium price - correct answers the intersection of the demand and supply
curves
why do prices settle at equilibrium? - correct answers either firms must reduce
prices to sell enough or firms increase price due to excess demand
time lags - correct answers a delay in an economy's response to changes in
variables
boom - correct answers fast economic growth, low unemployment
downturn - correct answers economic growth slower than in a boom
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