2026 EDEXCEL A- LEVEL ECONOMICS
THEME 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.
Adam Smith - ANSWER- The Father of Economics;
- The Invisible Hand (workings of the Price Mechanism)
- Specialisation
- Division of Labour
Division of Labour - ANSWER- Specialisation of workers on specific tasks
in the production process.
THEME 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.
Adam Smith - ANSWER- The Father of Economics;
- The Invisible Hand (workings of the Price Mechanism)
- Specialisation
- Division of Labour
Division of Labour - ANSWER- Specialisation of workers on specific tasks
in the production process.
