AQA A-Level Economics Paper 1
Questions And Correct Answers
2025….2026
What is Economics? - Economics is the study of how the world's scarce resources are allocated
to competing uses to satisfy society's wants. As a social science, Economics attempts to adopt a
scientific methodology for observing the behaviour of individuals and groups and then makes
predictions based upon these observations. For example, how many more units of a product
might an individual buy if the price of that product is reduced by 25%?
What are positive economics statements? - Positive economic statements are objective
statements that can be tested against facts to be declared either true or false. A positive
economic statement does not necessarily have to be true.
What are normative economic statements? - Normative economic statements are subjective
opinions or value judgements that cannot be tested against facts. These often concern views
about what individuals, firms or governments should do, based upon people's ethical, moral or
political standpoint. Some economists view such statements as being the concern of the field of
politics rather than economics. However, much of economic policy rests on normative
judgements about the 'right' levels of, for example, taxes, minimum wages or the amount of
government intervention in markets.
Which of the following would be classed as a normative economic statement?
A. An increase in price usually leads to a fall in the quantity demanded of a good.
B. The government should spend more money on improving public transport.
C. A reduction in income tax will lead to more people choosing to work. D. An increase in price
usually leads to a rise in the quantity supplied of a go. - B. All other answers are positive
economic statements because they can be tested and subsequently declared to be true or false.
Answer B is a normative statement since it is a subjective opinion, or value judgement: the word
'should' often suggests that a statement is an opinion.
, What is the main purpose of economic activity? - The main purpose of economic activity is to
satisfy society's needs and wants.
What is a need? - A need is something that humans require to survive, such as food, shelter and
warmth.
What is a want? - A want is something not essential for survival, but which people feel improves
their standard of living, or economic welfare, e.g. a new car.
What is economic welfare? How can it be increased? - Economic welfare refers to the standard
of living, or general wellbeing, of individuals in society. Satisfying society's needs and wants in
terms of material and non-material things leads, in general, to increased economic welfare.
Increasing real gross domestic product (GDP) per capita is pursued in order for average living
standards to increase, as this allows people to be able to satisfy more of their needs and wants.
There is debate, however, about whether people feel genuinely happier simply by having more
of their wants satisfied
What are the four economic resources/factors of production of a country? Give examples. - •
Capital: man-made physical equipment used to make other goods and services. This includes
machinery and computer equipment.
• Enterprise: entrepreneurs are individuals who take a business risk in combining the other
three factors of production in order to produce a good or service. • Land: all naturally occurring
resources such as minerals, the sea, fertile land and the environment. These can be further
divided into renewable and non-renewable resources.
• Labour: people involved in production, sometimes referred to as human capital.
CELL
What are the three fundamental economic questions that must be considered when deciding
how to allocate economic resources? - 1. What to produce and in what quantities? Goods are
usually divided into consumer goods and capital goods. Consumer goods are those that give
satisfaction to consumers, such as pizza or a fridge freezer. Capital goods are those used to
produce other goods, including machinery and IT equipment.
Questions And Correct Answers
2025….2026
What is Economics? - Economics is the study of how the world's scarce resources are allocated
to competing uses to satisfy society's wants. As a social science, Economics attempts to adopt a
scientific methodology for observing the behaviour of individuals and groups and then makes
predictions based upon these observations. For example, how many more units of a product
might an individual buy if the price of that product is reduced by 25%?
What are positive economics statements? - Positive economic statements are objective
statements that can be tested against facts to be declared either true or false. A positive
economic statement does not necessarily have to be true.
What are normative economic statements? - Normative economic statements are subjective
opinions or value judgements that cannot be tested against facts. These often concern views
about what individuals, firms or governments should do, based upon people's ethical, moral or
political standpoint. Some economists view such statements as being the concern of the field of
politics rather than economics. However, much of economic policy rests on normative
judgements about the 'right' levels of, for example, taxes, minimum wages or the amount of
government intervention in markets.
Which of the following would be classed as a normative economic statement?
A. An increase in price usually leads to a fall in the quantity demanded of a good.
B. The government should spend more money on improving public transport.
C. A reduction in income tax will lead to more people choosing to work. D. An increase in price
usually leads to a rise in the quantity supplied of a go. - B. All other answers are positive
economic statements because they can be tested and subsequently declared to be true or false.
Answer B is a normative statement since it is a subjective opinion, or value judgement: the word
'should' often suggests that a statement is an opinion.
, What is the main purpose of economic activity? - The main purpose of economic activity is to
satisfy society's needs and wants.
What is a need? - A need is something that humans require to survive, such as food, shelter and
warmth.
What is a want? - A want is something not essential for survival, but which people feel improves
their standard of living, or economic welfare, e.g. a new car.
What is economic welfare? How can it be increased? - Economic welfare refers to the standard
of living, or general wellbeing, of individuals in society. Satisfying society's needs and wants in
terms of material and non-material things leads, in general, to increased economic welfare.
Increasing real gross domestic product (GDP) per capita is pursued in order for average living
standards to increase, as this allows people to be able to satisfy more of their needs and wants.
There is debate, however, about whether people feel genuinely happier simply by having more
of their wants satisfied
What are the four economic resources/factors of production of a country? Give examples. - •
Capital: man-made physical equipment used to make other goods and services. This includes
machinery and computer equipment.
• Enterprise: entrepreneurs are individuals who take a business risk in combining the other
three factors of production in order to produce a good or service. • Land: all naturally occurring
resources such as minerals, the sea, fertile land and the environment. These can be further
divided into renewable and non-renewable resources.
• Labour: people involved in production, sometimes referred to as human capital.
CELL
What are the three fundamental economic questions that must be considered when deciding
how to allocate economic resources? - 1. What to produce and in what quantities? Goods are
usually divided into consumer goods and capital goods. Consumer goods are those that give
satisfaction to consumers, such as pizza or a fridge freezer. Capital goods are those used to
produce other goods, including machinery and IT equipment.
