2025 AQA GCSE ECONOMICS Paper 1
How Markets Work Question Paper and
Mark Scheme (Merged) May 2025 [
Q1. Which of the following is NOT a need?
• A) Food
• B) Holiday
• C) Shelter
• D) Warmth
Answer: B) Holiday
Rationale: Needs are essential for survival (food, shelter, warmth). A holiday is a
want—something desirable but not essential for survival.
Q2. Which of the following best states the basic economic problem?
• A) Limited resources and limited wants
• B) Limited resources and unlimited wants
• C) Unlimited resources and limited wants
• D) Unlimited resources and unlimited wants
Answer: B) Limited resources and unlimited wants
Rationale: The basic economic problem is that resources are scarce (finite) while
human wants are infinite, creating the need for choices.
Q3. What is the central purpose of economic activity?
• A) To maximise government revenue
• B) To produce goods and services to satisfy needs and wants
• C) To eliminate all scarce resources
• D) To reduce the population
,Answer: B) To produce goods and services to satisfy needs and wants
Rationale: The fundamental purpose of economic activity is the production of
goods and services to meet the needs and wants of society.
Q4. Which of the following is a key economic decision?
• A) What colour to paint a product
• B) What to produce, how to produce, and who benefits
• C) Which brand of advertising to use
• D) How many employees to hire
Answer: B) What to produce, how to produce, and who benefits
Rationale: The three key economic decisions are: what to produce, how to
produce, and for whom (who benefits from the goods and services produced).
Q5. Which of the following is NOT one of the main economic groups?
• A) Consumers
• B) Producers
• C) Government
• D) Trade unions
Answer: D) Trade unions
Rationale: The three main economic groups are consumers, producers, and
government. Trade unions are not classified as a main economic group.
Q6. A need can best be described as:
• A) Something that is desirable but not essential
• B) Something essential for survival
• C) Something that everyone wants equally
• D) Something that is always free
Answer: B) Something essential for survival
Rationale: Needs are goods and services that are essential for human survival,
such as food, water, shelter, and warmth.
,Q7. A want can best be described as:
• A) Something essential for survival
• B) Something desirable but not essential for survival
• C) Something that is always provided by the government
• D) Something that has no opportunity cost
Answer: B) Something desirable but not essential for survival
Rationale: Wants are goods and services that people desire but are not essential
for survival. They are unlimited and change over time.
Factors of Production
Q8. Which of the following would be classed as an economic resource (factor of
production)?
• A) Income
• B) Land
• C) Opportunity cost
• D) Productivity
Answer: B) Land
Rationale: Land is one of the four factors of production. Income, opportunity cost,
and productivity are economic concepts but not factors of production.
Q9. Which factor of production receives profit as its reward?
• A) Land
• B) Labour
• C) Capital
• D) Enterprise
Answer: D) Enterprise
Rationale: The rewards for factors of production are: land → rent, labour →
wages, capital → interest, enterprise → profit.
, Q10. Which factor of production receives wages as its reward?
• A) Land
• B) Labour
• C) Capital
• D) Enterprise
Answer: B) Labour
Rationale: Labour (human effort) receives wages or salaries as its reward. Land
receives rent, capital receives interest, and enterprise receives profit.
Q11. Which factor of production refers to the human effort used in production?
• A) Land
• B) Labour
• C) Capital
• D) Enterprise
Answer: B) Labour
Rationale: Labour is the human effort (physical and mental) used in the
production of goods and services.
Q12. Which factor of production refers to the man-made aids to production?
• A) Land
• B) Labour
• C) Capital
• D) Enterprise
Answer: C) Capital
Rationale: Capital refers to man-made resources used in production, such as
machinery, tools, factories, and equipment.
Q13. An entrepreneur is someone who:
• A) Works for a wage
How Markets Work Question Paper and
Mark Scheme (Merged) May 2025 [
Q1. Which of the following is NOT a need?
• A) Food
• B) Holiday
• C) Shelter
• D) Warmth
Answer: B) Holiday
Rationale: Needs are essential for survival (food, shelter, warmth). A holiday is a
want—something desirable but not essential for survival.
Q2. Which of the following best states the basic economic problem?
• A) Limited resources and limited wants
• B) Limited resources and unlimited wants
• C) Unlimited resources and limited wants
• D) Unlimited resources and unlimited wants
Answer: B) Limited resources and unlimited wants
Rationale: The basic economic problem is that resources are scarce (finite) while
human wants are infinite, creating the need for choices.
Q3. What is the central purpose of economic activity?
• A) To maximise government revenue
• B) To produce goods and services to satisfy needs and wants
• C) To eliminate all scarce resources
• D) To reduce the population
,Answer: B) To produce goods and services to satisfy needs and wants
Rationale: The fundamental purpose of economic activity is the production of
goods and services to meet the needs and wants of society.
Q4. Which of the following is a key economic decision?
• A) What colour to paint a product
• B) What to produce, how to produce, and who benefits
• C) Which brand of advertising to use
• D) How many employees to hire
Answer: B) What to produce, how to produce, and who benefits
Rationale: The three key economic decisions are: what to produce, how to
produce, and for whom (who benefits from the goods and services produced).
Q5. Which of the following is NOT one of the main economic groups?
• A) Consumers
• B) Producers
• C) Government
• D) Trade unions
Answer: D) Trade unions
Rationale: The three main economic groups are consumers, producers, and
government. Trade unions are not classified as a main economic group.
Q6. A need can best be described as:
• A) Something that is desirable but not essential
• B) Something essential for survival
• C) Something that everyone wants equally
• D) Something that is always free
Answer: B) Something essential for survival
Rationale: Needs are goods and services that are essential for human survival,
such as food, water, shelter, and warmth.
,Q7. A want can best be described as:
• A) Something essential for survival
• B) Something desirable but not essential for survival
• C) Something that is always provided by the government
• D) Something that has no opportunity cost
Answer: B) Something desirable but not essential for survival
Rationale: Wants are goods and services that people desire but are not essential
for survival. They are unlimited and change over time.
Factors of Production
Q8. Which of the following would be classed as an economic resource (factor of
production)?
• A) Income
• B) Land
• C) Opportunity cost
• D) Productivity
Answer: B) Land
Rationale: Land is one of the four factors of production. Income, opportunity cost,
and productivity are economic concepts but not factors of production.
Q9. Which factor of production receives profit as its reward?
• A) Land
• B) Labour
• C) Capital
• D) Enterprise
Answer: D) Enterprise
Rationale: The rewards for factors of production are: land → rent, labour →
wages, capital → interest, enterprise → profit.
, Q10. Which factor of production receives wages as its reward?
• A) Land
• B) Labour
• C) Capital
• D) Enterprise
Answer: B) Labour
Rationale: Labour (human effort) receives wages or salaries as its reward. Land
receives rent, capital receives interest, and enterprise receives profit.
Q11. Which factor of production refers to the human effort used in production?
• A) Land
• B) Labour
• C) Capital
• D) Enterprise
Answer: B) Labour
Rationale: Labour is the human effort (physical and mental) used in the
production of goods and services.
Q12. Which factor of production refers to the man-made aids to production?
• A) Land
• B) Labour
• C) Capital
• D) Enterprise
Answer: C) Capital
Rationale: Capital refers to man-made resources used in production, such as
machinery, tools, factories, and equipment.
Q13. An entrepreneur is someone who:
• A) Works for a wage
