AQA A-Level Economics QUESTIONS WITH WELL
VERIFIED ANSWERS
Positive statement - answer☑️✔️..A statement that does not include a value judgement and
can be tested against the facts or evidence.
Normative statement - answer☑️✔️..A statement that includes a value judgement and cannot
be refuted just by looking at data or evidence.
Value judgement - answer☑️✔️..A view about what is right or wrong, good or bad in a moral
sense. Statements that include value judgements often, but not always, contain the words
'should' or 'ought'.
Economic activity - answer☑️✔️..The production, consumption, exchange and distribution of
goods and services.
Economic resources (factors of production) - answer☑️✔️..The inputs into the production
process that are needed to produce the goods and services that satisfy people's wants. They are
usually classified as land, labour, capital and enterprise.
Land - answer☑️✔️..The factor of production that includes all the natural resources that are
available on the earth. It includes the land and sea.
Capital - answer☑️✔️..The human-made factor of production. Examples of capital include
machines, tools, lorries and buildings.
Labour - answer☑️✔️..The human resource. The contribution made by people to the
production of goods and services.
,Entrepreneur - answer☑️✔️..The person or group of people who organise the other economic
resources to allow goods and services to be produced.
Enterprise - answer☑️✔️..Enterprise involves making decisions and taking risks.
Scarce resource - answer☑️✔️..A factor of production that is limited in supply. There are not
enough available to satisfy people's needs and wants.
Scarcity - answer☑️✔️..The fundamental economic problem that results from limited
resources and unlimited wants. It means that choices have to be made which have an
opportunity cost.
Opportunity cost - answer☑️✔️..The next best alternative foregone when a choice is made.
Production possibility diagram - answer☑️✔️..Shows the quantities of two goods or services
that can be produced with the available resources, given the current state of technology.
Production possibility boundary (PPB) - answer☑️✔️..The PPB is also known as the production
possibility curve (PPC) and the production possibility frontier (PPF). It shows the various
quantities of two goods or services that can be produced, with the current state of technology,
when all the available resources are fully employed.
Resource allocation - answer☑️✔️..How the available factors of production are used to
produce different goods and services. The allocation of resources involves determining what is
produced, how it is produced and for whom it is produced.
Rational economic decision making - answer☑️✔️..Using all the available information to select
the best option to maximise the welfare of the decision maker. A rational consumer chooses to
buy the goods and services that, given their limited income, will maximise their total utility.
,Utility - answer☑️✔️..The satisfaction that is derived from consuming a good or service.
Marginal utility - answer☑️✔️..The change in total utility that results from the consumption of
one more, or one fewer, goods or services.
Hypothesis of diminishing marginal utility - answer☑️✔️..The proposition that as more of a
product is consumed, the additional satisfaction gained from each extra unit declines.
Imperfect information - answer☑️✔️..When an economic agent does not have all the
information needed to make a rational decision, or the information is distorted in some way.
Asymmetric information - answer☑️✔️..A type of imperfect information where one party to
an economic transaction has more information than the other party.
Behavioural economics - answer☑️✔️..A branch of economics that includes elements of
psychology to improve our understanding of how people's decision making is influenced by
biases and emotional factors.
Bounded rationality - answer☑️✔️..The idea that human limitations mean that people's
decision making is not completely rational. Bounded rationality means that when an individual
makes a decision, they choose an option that is satisfactory rather than optimal.
Bounded self-control - answer☑️✔️..The idea that people do not have sufficient willpower or
self-discipline to resist choices that may be tempting but are not in their self-interest.
Rules of thumb - answer☑️✔️..Mental shortcuts, based on experience, that enable individuals
to make decisions more quickly and easily.
, Anchoring - answer☑️✔️..The idea that when making decisions, people rely too heavily on one
particular piece of information, the anchor. The anchor is often the first piece of information
they encounter.
Availability bias - answer☑️✔️..When people's decision making is unduly influenced by recent
events or how easily an event comes to mind.
Social norms - answer☑️✔️..Behaviours that are consistent with what is generally considered
acceptable by society at the present time.
Choice architecture - answer☑️✔️..The way or framework in which choices are presented to
people.
Nudge - answer☑️✔️..Something that encourages a particular decision or behaviour without
removing freedom of choice.
Default choice - answer☑️✔️..An option that has been pre-selected for an individual but the
individual is able to select a different option if they want to.
Restricted choice - answer☑️✔️..Where the number of choices made available to an individual
is limited. This type of choice architecture is often adopted when there is a large number of
choices available which makes it hard for individuals to decide which is the best option.
Mandated choice - answer☑️✔️..A form of choice architecture where the individual must
make a decision. Mandated choices are usually required by law.
VERIFIED ANSWERS
Positive statement - answer☑️✔️..A statement that does not include a value judgement and
can be tested against the facts or evidence.
Normative statement - answer☑️✔️..A statement that includes a value judgement and cannot
be refuted just by looking at data or evidence.
Value judgement - answer☑️✔️..A view about what is right or wrong, good or bad in a moral
sense. Statements that include value judgements often, but not always, contain the words
'should' or 'ought'.
Economic activity - answer☑️✔️..The production, consumption, exchange and distribution of
goods and services.
Economic resources (factors of production) - answer☑️✔️..The inputs into the production
process that are needed to produce the goods and services that satisfy people's wants. They are
usually classified as land, labour, capital and enterprise.
Land - answer☑️✔️..The factor of production that includes all the natural resources that are
available on the earth. It includes the land and sea.
Capital - answer☑️✔️..The human-made factor of production. Examples of capital include
machines, tools, lorries and buildings.
Labour - answer☑️✔️..The human resource. The contribution made by people to the
production of goods and services.
,Entrepreneur - answer☑️✔️..The person or group of people who organise the other economic
resources to allow goods and services to be produced.
Enterprise - answer☑️✔️..Enterprise involves making decisions and taking risks.
Scarce resource - answer☑️✔️..A factor of production that is limited in supply. There are not
enough available to satisfy people's needs and wants.
Scarcity - answer☑️✔️..The fundamental economic problem that results from limited
resources and unlimited wants. It means that choices have to be made which have an
opportunity cost.
Opportunity cost - answer☑️✔️..The next best alternative foregone when a choice is made.
Production possibility diagram - answer☑️✔️..Shows the quantities of two goods or services
that can be produced with the available resources, given the current state of technology.
Production possibility boundary (PPB) - answer☑️✔️..The PPB is also known as the production
possibility curve (PPC) and the production possibility frontier (PPF). It shows the various
quantities of two goods or services that can be produced, with the current state of technology,
when all the available resources are fully employed.
Resource allocation - answer☑️✔️..How the available factors of production are used to
produce different goods and services. The allocation of resources involves determining what is
produced, how it is produced and for whom it is produced.
Rational economic decision making - answer☑️✔️..Using all the available information to select
the best option to maximise the welfare of the decision maker. A rational consumer chooses to
buy the goods and services that, given their limited income, will maximise their total utility.
,Utility - answer☑️✔️..The satisfaction that is derived from consuming a good or service.
Marginal utility - answer☑️✔️..The change in total utility that results from the consumption of
one more, or one fewer, goods or services.
Hypothesis of diminishing marginal utility - answer☑️✔️..The proposition that as more of a
product is consumed, the additional satisfaction gained from each extra unit declines.
Imperfect information - answer☑️✔️..When an economic agent does not have all the
information needed to make a rational decision, or the information is distorted in some way.
Asymmetric information - answer☑️✔️..A type of imperfect information where one party to
an economic transaction has more information than the other party.
Behavioural economics - answer☑️✔️..A branch of economics that includes elements of
psychology to improve our understanding of how people's decision making is influenced by
biases and emotional factors.
Bounded rationality - answer☑️✔️..The idea that human limitations mean that people's
decision making is not completely rational. Bounded rationality means that when an individual
makes a decision, they choose an option that is satisfactory rather than optimal.
Bounded self-control - answer☑️✔️..The idea that people do not have sufficient willpower or
self-discipline to resist choices that may be tempting but are not in their self-interest.
Rules of thumb - answer☑️✔️..Mental shortcuts, based on experience, that enable individuals
to make decisions more quickly and easily.
, Anchoring - answer☑️✔️..The idea that when making decisions, people rely too heavily on one
particular piece of information, the anchor. The anchor is often the first piece of information
they encounter.
Availability bias - answer☑️✔️..When people's decision making is unduly influenced by recent
events or how easily an event comes to mind.
Social norms - answer☑️✔️..Behaviours that are consistent with what is generally considered
acceptable by society at the present time.
Choice architecture - answer☑️✔️..The way or framework in which choices are presented to
people.
Nudge - answer☑️✔️..Something that encourages a particular decision or behaviour without
removing freedom of choice.
Default choice - answer☑️✔️..An option that has been pre-selected for an individual but the
individual is able to select a different option if they want to.
Restricted choice - answer☑️✔️..Where the number of choices made available to an individual
is limited. This type of choice architecture is often adopted when there is a large number of
choices available which makes it hard for individuals to decide which is the best option.
Mandated choice - answer☑️✔️..A form of choice architecture where the individual must
make a decision. Mandated choices are usually required by law.
