EDEXCEL A-LEVEL ECONOMICS PAPER 1
Economics - (ANSWER)The study of the allocation of scarce resources.
Economic Goods - (ANSWER)Resources that are scarce.
Short Run - (ANSWER)A time period where at least one factor of production is fixed.
Long Run - (ANSWER)A time period where all factors of production are variable.
Productivity - (ANSWER)The output per unit of input.
The Economic Problem - (ANSWER)Resources are scarce but wants are infinite.
Scarcity - (ANSWER)The world's resources are limited, there are only limited amounts of land,
water, oil, food, etc..
Therefore, resources are scarce.
Free Goods - (ANSWER)Goods that are unlimited in supply and therefore have no opportunity
cost.
Economic Agents - (ANSWER)Consumer, Business and Governments.
Agents involved in Economic transactions.
Production Possibility Frontier - (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 - (ANSWER)The next best alternative foregone.
Economic Growth - (ANSWER)Increase an economy's productive potential.
Capital Goods - (ANSWER)Goods intended for use in production, rather than by consumers.
Consumer Goods - (ANSWER)Goods designed for use by final consumers.
Renewable Resources - (ANSWER)A resource whose stock level can be replenished naturally
over a period of time.
Non-renewable Resources - (ANSWER)A resource whose stock level decreases over time as it is
consumed.
Ceteris Paribus - (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 - (ANSWER)A statement based on facts which can be tested as true or false
and are value-free.
Normative Statement - (ANSWER)A statement based on value judgements which cannot be
tested as true or false.
Division of Labour - (ANSWER)Specialisation of workers on specific tasks in the production
process.
Specialisation - (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 - (ANSWER)An exchange of goods/services for other goods/services.
- Does not involve money.
- Double coincidence of wants.
Free Market Economy - (ANSWER)Where all resources are privately owned and allocated via
the price mechanism. There is minimal government intervention.
Command Economy - (ANSWER)Where there is public ownership of resources and these are
allocated by the government.
Mixed Economy - (ANSWER)Where some resources are owned and allocated by the private
sector and some by the public sector.
Market - (ANSWER)A channel where goods and services are exchanged.
Utility - (ANSWER)The capacity of a good or service to satisfy some human want.
Rational Decision Making - (ANSWER)Where consumers allocate their expenditure on goods
and services to maximize utility, and producers allocate their resources to maximize profits.
Demand - (ANSWER)The quantity of goods or services that will be bought at any given price
over a period of time.
Demand Curve - (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 - (ANSWER)The additional satisfaction that a consumer gains for consuming
one additional unit of a product.
Economics - (ANSWER)The study of the allocation of scarce resources.
Economic Goods - (ANSWER)Resources that are scarce.
Short Run - (ANSWER)A time period where at least one factor of production is fixed.
Long Run - (ANSWER)A time period where all factors of production are variable.
Productivity - (ANSWER)The output per unit of input.
The Economic Problem - (ANSWER)Resources are scarce but wants are infinite.
Scarcity - (ANSWER)The world's resources are limited, there are only limited amounts of land,
water, oil, food, etc..
Therefore, resources are scarce.
Free Goods - (ANSWER)Goods that are unlimited in supply and therefore have no opportunity
cost.
Economic Agents - (ANSWER)Consumer, Business and Governments.
Agents involved in Economic transactions.
Production Possibility Frontier - (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 - (ANSWER)The next best alternative foregone.
Economic Growth - (ANSWER)Increase an economy's productive potential.
Capital Goods - (ANSWER)Goods intended for use in production, rather than by consumers.
Consumer Goods - (ANSWER)Goods designed for use by final consumers.
Renewable Resources - (ANSWER)A resource whose stock level can be replenished naturally
over a period of time.
Non-renewable Resources - (ANSWER)A resource whose stock level decreases over time as it is
consumed.
Ceteris Paribus - (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 - (ANSWER)A statement based on facts which can be tested as true or false
and are value-free.
Normative Statement - (ANSWER)A statement based on value judgements which cannot be
tested as true or false.
Division of Labour - (ANSWER)Specialisation of workers on specific tasks in the production
process.
Specialisation - (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 - (ANSWER)An exchange of goods/services for other goods/services.
- Does not involve money.
- Double coincidence of wants.
Free Market Economy - (ANSWER)Where all resources are privately owned and allocated via
the price mechanism. There is minimal government intervention.
Command Economy - (ANSWER)Where there is public ownership of resources and these are
allocated by the government.
Mixed Economy - (ANSWER)Where some resources are owned and allocated by the private
sector and some by the public sector.
Market - (ANSWER)A channel where goods and services are exchanged.
Utility - (ANSWER)The capacity of a good or service to satisfy some human want.
Rational Decision Making - (ANSWER)Where consumers allocate their expenditure on goods
and services to maximize utility, and producers allocate their resources to maximize profits.
Demand - (ANSWER)The quantity of goods or services that will be bought at any given price
over a period of time.
Demand Curve - (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 - (ANSWER)The additional satisfaction that a consumer gains for consuming
one additional unit of a product.
