ECONOMICS AQA A LEVEL EXAM, REVISION
QUESTIONS WITH CORRECT AND VERIFIED ANSWERS
LATEST EDITION
Positive Statement - ans-A statement that can be tested to see if it's correct or not
ws ws ws ws ws ws ws ws ws ws ws ws ws ws ws
Normative Statement - ans- ws ws ws
A statement that has a value judgement and can't be refuted by looking at evidence
ws ws ws ws ws ws ws ws ws ws ws ws ws ws
Need - ans-Something necessary for human survival
ws ws ws ws ws ws
Want - ans-Something that is desirable
ws ws ws ws ws
Economic welfare - ans-The economic wellbeing of an individual or group of people
ws ws ws ws ws ws ws ws ws ws ws ws ws
(Human happiness) ws
Capital good - ans-A good used in the production of other good and services
ws ws ws ws ws ws ws ws ws ws ws ws ws
Factors of production - ans-Land, Labour, Capital, Enterprise
ws ws ws ws ws ws ws
Fundamental Economic Problem is - ans- ws ws ws ws ws
scarcity and that it results from limited resources and unlimited wants
ws ws ws ws ws ws ws ws ws ws
Scarcity - ans- ws ws
Choices have to made how scarce resources are going to be allocated
ws ws ws ws ws ws ws ws ws ws ws
Opportunity cost - ans-The cost of giving up the next best alternative
ws ws ws ws ws ws ws ws ws ws ws
Productive efficiency - ans-When the average total costs of production is minimised
ws ws ws ws ws ws ws ws ws ws ws
A llocative efficiency - ans- ws ws ws
A vailable resources are used to produce the best combination of goods and services
ws ws ws ws ws ws ws ws ws ws ws ws
that best match people's preferences
ws ws ws ws ws
Demand - ans- ws ws
The quantity of a good or service that consumers are willing and able to buy at a gi
ws ws ws ws ws ws ws ws ws ws ws ws ws ws ws ws ws
ven time ws
Normal good - ans-A good for which demand increases when income increases
ws ws ws ws ws ws ws ws ws ws ws
, IED > 1 ws ws
Inferior good - ans-A good for which demand increases when income falls
ws ws ws ws ws ws ws ws ws ws ws
IED < 1 ws ws
Price elasticity of demand - ans-
ws ws ws ws ws
Measures the extent to which the demand of a good changes in response to a chan
ws ws ws ws ws ws ws ws ws ws ws ws ws ws ws
ge in the price of that good
ws ws ws ws ws ws ws
%QD/%P
Income elasticity of demand - ans-
ws ws ws ws ws
Measures the extent to which the demand of good changes in response to a chang
ws ws ws ws ws ws ws ws ws ws ws ws ws ws
e in income
ws ws
%QD/%Y
Cross elasticity of demand - ans-
ws ws ws ws ws
Measures the extent in which the demand of a good changes in response to a chan
ws ws ws ws ws ws ws ws ws ws ws ws ws ws ws
ge in the price of another
ws ws ws ws ws
Price elasticity of supply - ans-
ws ws ws ws ws
Measures the extent to which the supply of a good changes in response to a chang
ws ws ws ws ws ws ws ws ws ws ws ws ws ws ws
e in price of that good
ws ws ws ws ws
Market equilibrium - ans- ws ws ws
Planned demand = planned supply. No excess demand or supply, and no reason for
ws ws ws ws ws ws ws ws ws ws ws ws ws
the price to change
ws ws ws ws
Joint supply - ans- ws ws ws
When one good is produced, another good is produced from the same raw material
ws ws ws ws ws ws ws ws ws ws ws ws ws
Eg. Beef and Leather
ws ws ws
Competing supply - ans- ws ws ws
When raw material is used to produce one good CANT be used to produce another
ws ws ws ws ws ws ws ws ws ws ws ws ws ws
Eg. Biofuels and Wheat
ws ws ws
Joint demand - ans-occurs when demand for two goods is interdependent.
ws ws ws ws ws ws ws ws ws ws ws
E.g. it is no good having a printer without the ink to go with it
ws ws ws ws ws ws ws ws ws ws ws ws ws ws
Complementary good - ans- ws ws ws
A good in joint demand, or demanded at the same time as another
ws ws ws ws ws ws ws ws ws ws ws ws
QUESTIONS WITH CORRECT AND VERIFIED ANSWERS
LATEST EDITION
Positive Statement - ans-A statement that can be tested to see if it's correct or not
ws ws ws ws ws ws ws ws ws ws ws ws ws ws ws
Normative Statement - ans- ws ws ws
A statement that has a value judgement and can't be refuted by looking at evidence
ws ws ws ws ws ws ws ws ws ws ws ws ws ws
Need - ans-Something necessary for human survival
ws ws ws ws ws ws
Want - ans-Something that is desirable
ws ws ws ws ws
Economic welfare - ans-The economic wellbeing of an individual or group of people
ws ws ws ws ws ws ws ws ws ws ws ws ws
(Human happiness) ws
Capital good - ans-A good used in the production of other good and services
ws ws ws ws ws ws ws ws ws ws ws ws ws
Factors of production - ans-Land, Labour, Capital, Enterprise
ws ws ws ws ws ws ws
Fundamental Economic Problem is - ans- ws ws ws ws ws
scarcity and that it results from limited resources and unlimited wants
ws ws ws ws ws ws ws ws ws ws
Scarcity - ans- ws ws
Choices have to made how scarce resources are going to be allocated
ws ws ws ws ws ws ws ws ws ws ws
Opportunity cost - ans-The cost of giving up the next best alternative
ws ws ws ws ws ws ws ws ws ws ws
Productive efficiency - ans-When the average total costs of production is minimised
ws ws ws ws ws ws ws ws ws ws ws
A llocative efficiency - ans- ws ws ws
A vailable resources are used to produce the best combination of goods and services
ws ws ws ws ws ws ws ws ws ws ws ws
that best match people's preferences
ws ws ws ws ws
Demand - ans- ws ws
The quantity of a good or service that consumers are willing and able to buy at a gi
ws ws ws ws ws ws ws ws ws ws ws ws ws ws ws ws ws
ven time ws
Normal good - ans-A good for which demand increases when income increases
ws ws ws ws ws ws ws ws ws ws ws
, IED > 1 ws ws
Inferior good - ans-A good for which demand increases when income falls
ws ws ws ws ws ws ws ws ws ws ws
IED < 1 ws ws
Price elasticity of demand - ans-
ws ws ws ws ws
Measures the extent to which the demand of a good changes in response to a chan
ws ws ws ws ws ws ws ws ws ws ws ws ws ws ws
ge in the price of that good
ws ws ws ws ws ws ws
%QD/%P
Income elasticity of demand - ans-
ws ws ws ws ws
Measures the extent to which the demand of good changes in response to a chang
ws ws ws ws ws ws ws ws ws ws ws ws ws ws
e in income
ws ws
%QD/%Y
Cross elasticity of demand - ans-
ws ws ws ws ws
Measures the extent in which the demand of a good changes in response to a chan
ws ws ws ws ws ws ws ws ws ws ws ws ws ws ws
ge in the price of another
ws ws ws ws ws
Price elasticity of supply - ans-
ws ws ws ws ws
Measures the extent to which the supply of a good changes in response to a chang
ws ws ws ws ws ws ws ws ws ws ws ws ws ws ws
e in price of that good
ws ws ws ws ws
Market equilibrium - ans- ws ws ws
Planned demand = planned supply. No excess demand or supply, and no reason for
ws ws ws ws ws ws ws ws ws ws ws ws ws
the price to change
ws ws ws ws
Joint supply - ans- ws ws ws
When one good is produced, another good is produced from the same raw material
ws ws ws ws ws ws ws ws ws ws ws ws ws
Eg. Beef and Leather
ws ws ws
Competing supply - ans- ws ws ws
When raw material is used to produce one good CANT be used to produce another
ws ws ws ws ws ws ws ws ws ws ws ws ws ws
Eg. Biofuels and Wheat
ws ws ws
Joint demand - ans-occurs when demand for two goods is interdependent.
ws ws ws ws ws ws ws ws ws ws ws
E.g. it is no good having a printer without the ink to go with it
ws ws ws ws ws ws ws ws ws ws ws ws ws ws
Complementary good - ans- ws ws ws
A good in joint demand, or demanded at the same time as another
ws ws ws ws ws ws ws ws ws ws ws ws
