AQA A LEVEL Economics Exam
Study Guide
Positive Statement - Answer>> A statement that can be tested
to see if it's correct or not
Normative Statement - Answer>> A statement that has a value
judgement and can't be refuted by looking at evidence
Need - Answer>> Something necessary for human survival
Want - Answer>> Something that is desirable
Economic welfare - Answer>> The economic wellbeing of an
individual or group of people
(Human happiness)
Capital good - Answer>> A good used in the production of other
good and services
Factors of production - Answer>> Land, Labour, Capital,
Enterprise
Fundamental Economic Problem is - Answer>> scarcity and
that it results from limited resources and unlimited wants
Scarcity - Answer>> Choices have to made how scarce
resources are going to be allocated
Opportunity cost - Answer>> The cost of giving up the next best
alternative
, Productive efficiency - Answer>> When the average total costs
of production is minimised
Allocative efficiency - Answer>> Available resources are used
to produce the best combination of goods and services that best
match people's preferences
Demand - Answer>> The quantity of a good or service that
consumers are willing and able to buy at a given time
Normal good - Answer>> A good for which demand increases
when income increases
IED > 1
Inferior good - Answer>> A good for which demand increases
when income falls
IED < 1
Price elasticity of demand - Answer>> Measures the extent to
which the demand of a good changes in response to a change in
the price of that good
%QD/%P
Income elasticity of demand - Answer>> Measures the extent to
which the demand of good changes in response to a change in
income
%QD/%Y
Study Guide
Positive Statement - Answer>> A statement that can be tested
to see if it's correct or not
Normative Statement - Answer>> A statement that has a value
judgement and can't be refuted by looking at evidence
Need - Answer>> Something necessary for human survival
Want - Answer>> Something that is desirable
Economic welfare - Answer>> The economic wellbeing of an
individual or group of people
(Human happiness)
Capital good - Answer>> A good used in the production of other
good and services
Factors of production - Answer>> Land, Labour, Capital,
Enterprise
Fundamental Economic Problem is - Answer>> scarcity and
that it results from limited resources and unlimited wants
Scarcity - Answer>> Choices have to made how scarce
resources are going to be allocated
Opportunity cost - Answer>> The cost of giving up the next best
alternative
, Productive efficiency - Answer>> When the average total costs
of production is minimised
Allocative efficiency - Answer>> Available resources are used
to produce the best combination of goods and services that best
match people's preferences
Demand - Answer>> The quantity of a good or service that
consumers are willing and able to buy at a given time
Normal good - Answer>> A good for which demand increases
when income increases
IED > 1
Inferior good - Answer>> A good for which demand increases
when income falls
IED < 1
Price elasticity of demand - Answer>> Measures the extent to
which the demand of a good changes in response to a change in
the price of that good
%QD/%P
Income elasticity of demand - Answer>> Measures the extent to
which the demand of good changes in response to a change in
income
%QD/%Y
