Edexcel A-level Economics Theme 1-4 Questions & Correct Answers/ Graded A+

Economics : The study of the allocation of scarce resources. Economic Goods : Resources that are scarce. Short Run : A time period where at least one factor of production is fixed. Long Run : A time period where all factors of production are variable. Productivity : The output per unit of input. The Economic Problem : Resources are scarce but wants are infinite. 2 Scarcity : The world's resources are limited, there are only limited amounts of land, water, oil, food, etc.. Therefore, resources are scarce. Free Goods : Goods that are unlimited in supply and therefore have no opportunity cost. Economic Agents : Consumer, Business and Governments. Agents involved in Economic transactions. Production Possibility Frontier : 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 : The next best alternative foregone. Economic Growth 3 : Increase an economy's productive potential. Capital Goods : Goods intended for use in production, rather than by consumers. Consumer Goods : Goods designed for use by final consumers. Renewable Resources : A resource whose stock level can be replenished naturally over a period of time. Non-renewable Resources : A resource whose stock level decreases over time as it is consumed. Ceteris Paribus : 'All other things (factors) remaining the same' The assumption that all other variables within a model remain constant whilst the change is being considered.