IGCSE ECONOMICS (EDEXCEL) -
PAPER 1 EXAM QUESTIONS WITH
COMPLETE SOLUTIONS
, Economic Problem - ANSWERSwhat to produce, how to produce and for whom to
produce
Scarcity - ANSWERSexists when there are unlimited wants and finite resources
Want - ANSWERSthe desire for goods and services
Resources - ANSWERSfactors of production: land, labour, capital, entrepreneurship
Opportunity cost - ANSWERSthe value of the next best alternative foregone
Production possibility curve - ANSWERSshows all the possible combinations of goods
that can be produced when all the known resources are used efficiently
Positive economic growth - ANSWERSan increase in the maximum productive potential
of an economy
Revenue - ANSWERSthe amount of money a firm receives from selling its output
Profit - ANSWERSwhere total revenue is greater than total costs
Demand - ANSWERSthe quantity of goods/services consumers are willing and able to
buy at a given price
Fashion and tastes - ANSWERScurrent trends in consumers' preferences for a certain
type of good
Substitute goods - ANSWERSgoods in competitive demand
Complementary goods - ANSWERSgoods in joint demand, i.e. used together
Demographic changes - ANSWERSchanges in population size or structure
Supply - ANSWERSthe quantity of goods/services producers are willing and able to sell
at a given price
Indirect tax - ANSWERStax on expenditure
Subsidy - ANSWERSmoney given by the government to producers to encourage
production (by reducing their costs)
PAPER 1 EXAM QUESTIONS WITH
COMPLETE SOLUTIONS
, Economic Problem - ANSWERSwhat to produce, how to produce and for whom to
produce
Scarcity - ANSWERSexists when there are unlimited wants and finite resources
Want - ANSWERSthe desire for goods and services
Resources - ANSWERSfactors of production: land, labour, capital, entrepreneurship
Opportunity cost - ANSWERSthe value of the next best alternative foregone
Production possibility curve - ANSWERSshows all the possible combinations of goods
that can be produced when all the known resources are used efficiently
Positive economic growth - ANSWERSan increase in the maximum productive potential
of an economy
Revenue - ANSWERSthe amount of money a firm receives from selling its output
Profit - ANSWERSwhere total revenue is greater than total costs
Demand - ANSWERSthe quantity of goods/services consumers are willing and able to
buy at a given price
Fashion and tastes - ANSWERScurrent trends in consumers' preferences for a certain
type of good
Substitute goods - ANSWERSgoods in competitive demand
Complementary goods - ANSWERSgoods in joint demand, i.e. used together
Demographic changes - ANSWERSchanges in population size or structure
Supply - ANSWERSthe quantity of goods/services producers are willing and able to sell
at a given price
Indirect tax - ANSWERStax on expenditure
Subsidy - ANSWERSmoney given by the government to producers to encourage
production (by reducing their costs)
