A-level 2019 AQA eCONOMICS
PRACTICe eXAM QUeSTIONS WITH
CORReCT DeTAIleD ANSWeRS |
AlReADY GRADeD A+<ReCeNT
veRSION>
1) The Law of Demand - ANSWER consumers will buy more of a good when its
price is lower and less when its price is higher
2) The Law of Supply - ANSWER producers offer more of a good as its price
increases and less as its price falls
3) Equilibrium Price - ANSWER the price at which the quantity demanded equals the
quantity supplied
4) Excess Supply - ANSWER the amount by which quantity supplied exceeds
quantity demanded when the price of a good exceeds the equilibrium price
5) Surplus - ANSWER A situation in which quantity supplied is greater than quantity
demanded
6) Excess Demand - ANSWER The situation that exists when demand is greater than
supply.
7) Deficit - ANSWER A situation in which quantity supplied is less than the quantity
demanded
,8) Economics - ANSWER A social science that studies how people seek to satisfy
their needs and wants by making choices
9) Price Elasticity of Demand - ANSWER a measure of how much the quantity
demanded of a good responds to a change in the price of that good.
10) Income Elasticity of Demand - ANSWER a measure of the responsiveness of the
quantity demanded to changes in income.
11) Cross Price Elasticity of Demand - ANSWER measures the response of demand
for one good to changes in the price of another good
12) PED Formula - ANSWER % change in quantity demanded / % change in price
13) YED Formula - ANSWER % change in quantity demanded / % change in income
14) XED Formula - ANSWER % change in quantity demanded of good X / % change
in price of good Y
15) Luxury Good - ANSWER a good with an income elasticity greater than 1 for
which demand rises by a greater amount than the rise in income.
16) Normal Good - ANSWER a good for which the demand increases as income rises
and decreases as income falls
17) Veblen Good - ANSWER A good with a positively sloped demand curve. As price
increases people buy more of these goods to demonstrate their social status.
18) Inferior Good - ANSWER a good for which, other things being equal, an increase
in income leads to a decrease in demand
19) Substitute Good - ANSWER A good that can be used in place of another good
,20) Complementary Good - ANSWER Products and services that are used together.
When the price of one falls, the demand for the other increases (and conversely).
21) Positive Economic Statement - ANSWER A statement that can be proved or
disproved by reference to facts
22) Normative Economic Statement - ANSWER A statement that reflects on opinion,
which cannot be proved or disproved by reference to the facts.
23) Production Possibilities Frontier (PPF) - ANSWER a diagram that shows the
productively efficient combinations of two products that an economy can produce
given the resources it has available
24) Opportunity Cost - ANSWER The cost of the next best alternative forgone.
25) Scarcity - ANSWER A situation in which unlimited wants exceed the limited
resources available to fulfill those wants
26) The Basic Economic Problem - ANSWER Resources have to be allocated between
competing uses because wants are infinite whilst resources are scarce
27) Value Judgement - ANSWER An opinion based on a person's individual values
and beliefs
28) Productive Efficiency - ANSWER Goods are being produced at lowest possible
cost. To be productively efficient means the economy must be producing on its
production possibility frontier.
29) Allocative Efficiency - ANSWER When the mix of goods being produced
represents the mix that society most desires. A more precise definition of is at an
output level where the price equals the Marginal Cost (MC) of production. This is
because the price that consumers are willing to pay is equivalent to the marginal
utility that they get
, 30) Economic Good - ANSWER Things people want that are scarce - there is an
opportunity cost involved.
31) The Factors of Production - ANSWER Land, labour, capital and enterprise.
32) Land - ANSWER Natural resources that are used to make goods and services
33) Capital - ANSWER The equipment and structures used to produce goods and
services
34) Enterprise - ANSWER The skill and risk taking abilities of an individual that are
needed to make a new idea work
35) Unlimited Wants - ANSWER The side of human nature that wants an endless
number of things, yet has a limited amount of resources to achieve these wants.
36) Limited Resources - ANSWER The condition of there not being enough resources
to fulfill all wants and needs
37) Resource Allocation - ANSWER Assigning available resources, or factors of
production, to specific uses chosen among many possible and competing alternatives.
It involves answering "What to produce" and "How to produce".
38) Trade-Offs - ANSWER Alternative that must be given up when one choice is
made rather than another
39) Productively Inefficient - ANSWER Points inside of the PPF curve showing that a
firm is not producing at its lowest unit cost.
40) Extension of Demand - ANSWER When quantity demanded for a good increases
because its price falls; it is shown by a movement down the demand curve
PRACTICe eXAM QUeSTIONS WITH
CORReCT DeTAIleD ANSWeRS |
AlReADY GRADeD A+<ReCeNT
veRSION>
1) The Law of Demand - ANSWER consumers will buy more of a good when its
price is lower and less when its price is higher
2) The Law of Supply - ANSWER producers offer more of a good as its price
increases and less as its price falls
3) Equilibrium Price - ANSWER the price at which the quantity demanded equals the
quantity supplied
4) Excess Supply - ANSWER the amount by which quantity supplied exceeds
quantity demanded when the price of a good exceeds the equilibrium price
5) Surplus - ANSWER A situation in which quantity supplied is greater than quantity
demanded
6) Excess Demand - ANSWER The situation that exists when demand is greater than
supply.
7) Deficit - ANSWER A situation in which quantity supplied is less than the quantity
demanded
,8) Economics - ANSWER A social science that studies how people seek to satisfy
their needs and wants by making choices
9) Price Elasticity of Demand - ANSWER a measure of how much the quantity
demanded of a good responds to a change in the price of that good.
10) Income Elasticity of Demand - ANSWER a measure of the responsiveness of the
quantity demanded to changes in income.
11) Cross Price Elasticity of Demand - ANSWER measures the response of demand
for one good to changes in the price of another good
12) PED Formula - ANSWER % change in quantity demanded / % change in price
13) YED Formula - ANSWER % change in quantity demanded / % change in income
14) XED Formula - ANSWER % change in quantity demanded of good X / % change
in price of good Y
15) Luxury Good - ANSWER a good with an income elasticity greater than 1 for
which demand rises by a greater amount than the rise in income.
16) Normal Good - ANSWER a good for which the demand increases as income rises
and decreases as income falls
17) Veblen Good - ANSWER A good with a positively sloped demand curve. As price
increases people buy more of these goods to demonstrate their social status.
18) Inferior Good - ANSWER a good for which, other things being equal, an increase
in income leads to a decrease in demand
19) Substitute Good - ANSWER A good that can be used in place of another good
,20) Complementary Good - ANSWER Products and services that are used together.
When the price of one falls, the demand for the other increases (and conversely).
21) Positive Economic Statement - ANSWER A statement that can be proved or
disproved by reference to facts
22) Normative Economic Statement - ANSWER A statement that reflects on opinion,
which cannot be proved or disproved by reference to the facts.
23) Production Possibilities Frontier (PPF) - ANSWER a diagram that shows the
productively efficient combinations of two products that an economy can produce
given the resources it has available
24) Opportunity Cost - ANSWER The cost of the next best alternative forgone.
25) Scarcity - ANSWER A situation in which unlimited wants exceed the limited
resources available to fulfill those wants
26) The Basic Economic Problem - ANSWER Resources have to be allocated between
competing uses because wants are infinite whilst resources are scarce
27) Value Judgement - ANSWER An opinion based on a person's individual values
and beliefs
28) Productive Efficiency - ANSWER Goods are being produced at lowest possible
cost. To be productively efficient means the economy must be producing on its
production possibility frontier.
29) Allocative Efficiency - ANSWER When the mix of goods being produced
represents the mix that society most desires. A more precise definition of is at an
output level where the price equals the Marginal Cost (MC) of production. This is
because the price that consumers are willing to pay is equivalent to the marginal
utility that they get
, 30) Economic Good - ANSWER Things people want that are scarce - there is an
opportunity cost involved.
31) The Factors of Production - ANSWER Land, labour, capital and enterprise.
32) Land - ANSWER Natural resources that are used to make goods and services
33) Capital - ANSWER The equipment and structures used to produce goods and
services
34) Enterprise - ANSWER The skill and risk taking abilities of an individual that are
needed to make a new idea work
35) Unlimited Wants - ANSWER The side of human nature that wants an endless
number of things, yet has a limited amount of resources to achieve these wants.
36) Limited Resources - ANSWER The condition of there not being enough resources
to fulfill all wants and needs
37) Resource Allocation - ANSWER Assigning available resources, or factors of
production, to specific uses chosen among many possible and competing alternatives.
It involves answering "What to produce" and "How to produce".
38) Trade-Offs - ANSWER Alternative that must be given up when one choice is
made rather than another
39) Productively Inefficient - ANSWER Points inside of the PPF curve showing that a
firm is not producing at its lowest unit cost.
40) Extension of Demand - ANSWER When quantity demanded for a good increases
because its price falls; it is shown by a movement down the demand curve
