Edexcel A-Level Economics Theme 1 Questions & Correct Answers/ Graded A+

Model : A theoretical concept that looks at how differant variables interact. Ceteris Paribus : All other factors remain the same. Positive Statement : Objective, factually based comments that can be tested. Normative Statement : Subjective, questionable comments based on valued judgements that are difficult to test. Scarcity : When there are unlimited human wants but limited number of resources to meet these wants. Economic Problem : Making choices on how to allocate scarce resources to best meet our needs and wants. 2 Renewable Resources : Can be replenished. Non-Renewable Resources : Finite supply, will run out. Sustainable Resources : Used for economic activities in such a manner they wont run out. Oppotunity Cost : The benefit lost of the next best alternative when making a choice. Production Possibility Frontier : A curve which represents all possible combinations of goods an economy or a firm can produce when all factors of production are fully employed and used efficiently. Factors of Production : 1. Land 2. Labour 3 3. Capital 4. Enterprise Productive Efficiency : When the economy uses minimum inputs to produce maximum output at lower cost.