Microeconomics - A Level Edexcel Year
1 Questions with Correct Answers 2025
WhatUareUmodelsUbasedUon?U-UCORRECTUANSWERU-AUsetUofUassumptionsUandUsimplifications.
ceterisUparibusU-UCORRECTUANSWERU-everythingUelseUremainsUequal
positiveUstatementU-UCORRECTUANSWERU-
StatementsUthatUdescribeUtheUworldUasUitUis.UTheyUareUobjectiveUstatementsUthatUcanUbeUproved.
normativeUstatementU-UCORRECTUANSWERU-
StatementsUthatUdescribeUhowUtheUworldUshouldUbe.UTheyUareUopinionsUthatUcontainUvalueUjudgements.
wantsU-UCORRECTUANSWERU-theUthingsUpeopleUcanUliveUwithoutUbutUhaveUaUdesireUfor.
needsU-UCORRECTUANSWERU-theUthingsUpeopleUcannotUliveUwithout
TheUfoundationUofUeconomicUdecisionsUare...U-UCORRECTUANSWERU-
whatUweUproduce,UhowUweUproduce,UwhoUweUareUproducingUfor
opportunityUcostU-UCORRECTUANSWERU-theUnextUbestUalternativeUforegone
attendingUuniversityUisUanUexampleUof...U-UCORRECTUANSWERU-
opportunityUcostUexceedingUtheUmonetaryUcostUbecauseUofUtheUlossUofUpotentialUearnings
issuesUwithUopportunityUcostU-UCORRECTUANSWERU-
notUallUfactorsUhaveUalternatives,UsomeUalternativesUareUunknown,UagentsUmayUlackUknowledgeUonUaltern
atives,UcanUbeUdifficultUtoUswitchUsomeUfactorsUtoUanotherUuse.
usesUofUopportunityUcostU-UCORRECTUANSWERU-
allocatingUresources,UconsumersUuseUitUtoUdecideUhowUtoUspendUtheirUearnings,Utradeoffs
, economicUactivityU-UCORRECTUANSWERU-productionUandUconsumptionUofUgoodsUandUservices
3UmainUeconomicUagentsU-UCORRECTUANSWERU-producers,Uconsumers,Ugovernments
economicUagentsUmakeUdecisionsUbasedUon...U-UCORRECTUANSWERU-
theirUvariousUincentivesUe.gUprofitUmaximisation
producerUdecision-makingU-UCORRECTUANSWERU-
producersUmustUdecideUwhatUproductsUtoUmakeUandUtheUsellingUpriceUofUproducts.
consumerUdecision-makingU-UCORRECTUANSWERU-
consumersUdecideUwhatUproductsUtoUpurchaseUandUhowUmuchUtheyUwantUtoUspendUonUproducts.
governmentUdecision-makingU-UCORRECTUANSWERU-
governmentsUdecideUhowUmuchUtheyUshouldUgetUinvolvedUinUtheUproductionUandUconsumptionUprocess.
mainUincentiveUforUfirmsU-UCORRECTUANSWERU-profit
renewableUresourcesU-UCORRECTUANSWERU-unlimitedUinUsupplyUe.gUoxygen,UwindUenergy,UsolarUenergy
rateUofUextractionU-UCORRECTUANSWERU-
theUresourceUwillUbecomeUdepletedUandUwillUhaveUaUfiniteUsupplyUifUtheUrateUatUwhichUweUconsumeUtheUr
esourceUisUquickerUthanUtheUnaturalUrateUofUproduction
non-renewableUresourcesU-UCORRECTUANSWERU-finiteUinUsupplyUe.gUgas,Ucoal,Uoil
WhatUdoesUrenewabilityUofUresourcesUdependUon?U-UCORRECTUANSWERU-RATEUOFUEXTRACTION
productionUpossibilityUfrontierU-UCORRECTUANSWERU-
showsUanUeconomyUatUitsUmaximumUproductiveUpotential
1 Questions with Correct Answers 2025
WhatUareUmodelsUbasedUon?U-UCORRECTUANSWERU-AUsetUofUassumptionsUandUsimplifications.
ceterisUparibusU-UCORRECTUANSWERU-everythingUelseUremainsUequal
positiveUstatementU-UCORRECTUANSWERU-
StatementsUthatUdescribeUtheUworldUasUitUis.UTheyUareUobjectiveUstatementsUthatUcanUbeUproved.
normativeUstatementU-UCORRECTUANSWERU-
StatementsUthatUdescribeUhowUtheUworldUshouldUbe.UTheyUareUopinionsUthatUcontainUvalueUjudgements.
wantsU-UCORRECTUANSWERU-theUthingsUpeopleUcanUliveUwithoutUbutUhaveUaUdesireUfor.
needsU-UCORRECTUANSWERU-theUthingsUpeopleUcannotUliveUwithout
TheUfoundationUofUeconomicUdecisionsUare...U-UCORRECTUANSWERU-
whatUweUproduce,UhowUweUproduce,UwhoUweUareUproducingUfor
opportunityUcostU-UCORRECTUANSWERU-theUnextUbestUalternativeUforegone
attendingUuniversityUisUanUexampleUof...U-UCORRECTUANSWERU-
opportunityUcostUexceedingUtheUmonetaryUcostUbecauseUofUtheUlossUofUpotentialUearnings
issuesUwithUopportunityUcostU-UCORRECTUANSWERU-
notUallUfactorsUhaveUalternatives,UsomeUalternativesUareUunknown,UagentsUmayUlackUknowledgeUonUaltern
atives,UcanUbeUdifficultUtoUswitchUsomeUfactorsUtoUanotherUuse.
usesUofUopportunityUcostU-UCORRECTUANSWERU-
allocatingUresources,UconsumersUuseUitUtoUdecideUhowUtoUspendUtheirUearnings,Utradeoffs
, economicUactivityU-UCORRECTUANSWERU-productionUandUconsumptionUofUgoodsUandUservices
3UmainUeconomicUagentsU-UCORRECTUANSWERU-producers,Uconsumers,Ugovernments
economicUagentsUmakeUdecisionsUbasedUon...U-UCORRECTUANSWERU-
theirUvariousUincentivesUe.gUprofitUmaximisation
producerUdecision-makingU-UCORRECTUANSWERU-
producersUmustUdecideUwhatUproductsUtoUmakeUandUtheUsellingUpriceUofUproducts.
consumerUdecision-makingU-UCORRECTUANSWERU-
consumersUdecideUwhatUproductsUtoUpurchaseUandUhowUmuchUtheyUwantUtoUspendUonUproducts.
governmentUdecision-makingU-UCORRECTUANSWERU-
governmentsUdecideUhowUmuchUtheyUshouldUgetUinvolvedUinUtheUproductionUandUconsumptionUprocess.
mainUincentiveUforUfirmsU-UCORRECTUANSWERU-profit
renewableUresourcesU-UCORRECTUANSWERU-unlimitedUinUsupplyUe.gUoxygen,UwindUenergy,UsolarUenergy
rateUofUextractionU-UCORRECTUANSWERU-
theUresourceUwillUbecomeUdepletedUandUwillUhaveUaUfiniteUsupplyUifUtheUrateUatUwhichUweUconsumeUtheUr
esourceUisUquickerUthanUtheUnaturalUrateUofUproduction
non-renewableUresourcesU-UCORRECTUANSWERU-finiteUinUsupplyUe.gUgas,Ucoal,Uoil
WhatUdoesUrenewabilityUofUresourcesUdependUon?U-UCORRECTUANSWERU-RATEUOFUEXTRACTION
productionUpossibilityUfrontierU-UCORRECTUANSWERU-
showsUanUeconomyUatUitsUmaximumUproductiveUpotential
