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