Edexcel A-level Economics Paper 1 With Answers -2024

Economics - correct answer The study of the allocation of scarce resources. Economic Goods - correct answer Resources that are scarce. Short Run - correct answer A time period where at least one factor of production is fixed. Long Run - correct answer A time period where all factors of production are variable. Productivity - correct answer The output per unit of input. The Economic Problem - correct answer Resources are scarce but wants are infinite. Scarcity - correct answer The world's resources are limited, there are only limited amounts of land, water, oil, food, etc.. Therefore, resources are scarce. Free Goods - correct answer Goods that are unlimited in supply and therefore have no opportunity cost. Economic Agents - correct answer Consumer, Business and Governments. Agents involved in Economic transactions. Production Possibility Frontier - correct answer The maximum potential output of a combination of goods an economy can achieve when all its resources are fully and efficiently employed, given the level of technology. Opportunity Cost - correct answer The next best alternative foregone. Economic Growth - correct answer Increase an economy's productive potential. Capital Goods - correct answer Goods intended for use in production, rather than by consumers. Consumer Goods - correct answer Goods designed for use by final consumers. Renewable Resources - correct answer A resource whose stock level can be replenished naturally over a period of time. Non-renewable Resources - correct answer A resource whose stock level decreases over time as it is consumed. Ceteris Paribus - correct answer 'All other things (factors) remaining the same' The assumption that all other variables within a model remain constant whilst the change is being considered. Positive Statement - correct answer A statement based on facts which can be tested as true or false and are value-free. Normative Statement - correct answer A statement based on value judgements which cannot be tested as true or false. Adam Smith - correct answer The Father of Economics; - The Invisible Hand (workings of the Price Mechanism) - Specialisation - Division of Labour Division of Labour - correct answer Specialisation of workers on specific tasks in the production process. Specialisation - correct answer The process of breaking down the production process into steps and then each worker is assigned a step. This would then increase labour productivity (Output per Worker). Barter - correct answer An exchange of goods/services for other goods/services. - Does not involve money. - Double coincidence of wants. Money - correct answer Anything which is acceptable to a wide number of people and organisations as payment for goods and services. Free Market Economy - correct answer Where all resources are privately owned and allocated via the price mechanism. There is minimal government intervention. Command Economy - correct answer Where there is public ownership of resources and these are allocated by the government. Mixed Economy - correct answer Where some resources are owned and allocated by the private sector and some by the public sector. Market - correct answer A channel where goods and services are exchanged. Utility - correct answer The capacity of a good or service to satisfy some human want. Rational Decision Making - correct answer Where consumers allocate their expenditure on goods and services to maximize utility, and producers allocate their resources to maximize profits. Demand - correct answer The quantity of goods or services that will be bought at any given price over a period of time. Demand Curve - correct answer Shows the quantity of a good or service that would be bought over a range of different price levels in a given period of time. Slopes downward - Price and Quantity have an inverse (negative) relationship. Marginal Utility - correct answer The additional satisfaction that a consumer gains for consuming one additional unit of a product. Diminishing Marginal Utility - correct answer As successive units of a good are consumed, the utility gained from each extra unit will fall. % Change - correct answer y2 - y1 / y1 × 100 Price Elasticity of Demand (PED) - correct answer The responsiveness of demand to changes in price. The value is always negative. % ∆QD / % ∆P × 100 Unitary Price Elasticity (Ped) - correct answer Ped = 1 P