AQA ECONOMICS TEST PAPER 2025/2026 QUESTIONS AND
SOLUTIONS MARKED A+
✔✔Demand - ✔✔the quantity of a good or service that consumers are willing and able
to buy at a given price per period
✔✔Supply - ✔✔the quantity of a good or service that businesses are willing and able to
provide at a given price per period
✔✔market - ✔✔the institution through which buyers and sellers interact and engage in
exchange
✔✔equilibrium - ✔✔the price at which quantity demanded meets quantity supplied
✔✔citrus paribus - ✔✔all other factors remaining constant
✔✔Disequilibrium - ✔✔a combination of price and quantity traded which has a tendency
to change for given demand and supply conditions
✔✔joint demand - ✔✔When the demand for one product increases the demand for
another.
✔✔Joint supply - ✔✔when one good is produced, another good is also produced from
the same raw materials
✔✔derived demand - ✔✔demand for a product which is demanded only because of
demand for final ;product it contributes to
✔✔composite demand - ✔✔Where a good is demanded for two or more separate uses
✔✔price elasticity of demand - ✔✔the responsiveness of quantity demanded to a
change in price
✔✔PED = - ✔✔% change in quantity demanded / % change in price
✔✔If PED is greater than 1 (ignore minus) demand is - ✔✔relatively elastic
✔✔If PED less than 1 (ignore minus) demand is - ✔✔relatively inelastic
✔✔income elasticity of demand - ✔✔The responsiveness of demand to a change in
income
✔✔YED - ✔✔% change in quantity demanded / % change in income
, ✔✔If YED is positive - ✔✔normal good
✔✔If YED negative - ✔✔inferior good
✔✔cross elasticity of demand - ✔✔the responsiveness of the demand for one good to a
change in the price of another good
✔✔XED - ✔✔% change in QD of good A / % change in price of good B
✔✔If XED is negative - ✔✔complementary good
✔✔if XED positive value - ✔✔substitute good
✔✔if XED is zero - ✔✔unrelated goods
✔✔Elasticity of supply - ✔✔The responsiveness of quantity supplied to a change in
price
✔✔PES - ✔✔% change in quantity supplied/ % change in price
✔✔Normal good - ✔✔a good that consumers demand more of when their incomes
increase
✔✔inferior good - ✔✔a good that consumers demand less of when their incomes
increase
✔✔substitute good - ✔✔Good which is an alternative to a particular good from the
consumer's point of view
✔✔income - ✔✔money earned over a period of time eg wages
✔✔wealth - ✔✔value of an individuals assets at a point in time
✔✔mixed economy - ✔✔where resource allocation is undertaken by state planning nd
market forces, depdnon product
✔✔free market economy - ✔✔where markets determine resource allocation with
minimal state intervention
✔✔market failure - ✔✔a situation in which a market left on its own fails to allocate
resources efficiently
✔✔government failure - ✔✔an inefficient allocation of resources caused by government
intervention in the economy
SOLUTIONS MARKED A+
✔✔Demand - ✔✔the quantity of a good or service that consumers are willing and able
to buy at a given price per period
✔✔Supply - ✔✔the quantity of a good or service that businesses are willing and able to
provide at a given price per period
✔✔market - ✔✔the institution through which buyers and sellers interact and engage in
exchange
✔✔equilibrium - ✔✔the price at which quantity demanded meets quantity supplied
✔✔citrus paribus - ✔✔all other factors remaining constant
✔✔Disequilibrium - ✔✔a combination of price and quantity traded which has a tendency
to change for given demand and supply conditions
✔✔joint demand - ✔✔When the demand for one product increases the demand for
another.
✔✔Joint supply - ✔✔when one good is produced, another good is also produced from
the same raw materials
✔✔derived demand - ✔✔demand for a product which is demanded only because of
demand for final ;product it contributes to
✔✔composite demand - ✔✔Where a good is demanded for two or more separate uses
✔✔price elasticity of demand - ✔✔the responsiveness of quantity demanded to a
change in price
✔✔PED = - ✔✔% change in quantity demanded / % change in price
✔✔If PED is greater than 1 (ignore minus) demand is - ✔✔relatively elastic
✔✔If PED less than 1 (ignore minus) demand is - ✔✔relatively inelastic
✔✔income elasticity of demand - ✔✔The responsiveness of demand to a change in
income
✔✔YED - ✔✔% change in quantity demanded / % change in income
, ✔✔If YED is positive - ✔✔normal good
✔✔If YED negative - ✔✔inferior good
✔✔cross elasticity of demand - ✔✔the responsiveness of the demand for one good to a
change in the price of another good
✔✔XED - ✔✔% change in QD of good A / % change in price of good B
✔✔If XED is negative - ✔✔complementary good
✔✔if XED positive value - ✔✔substitute good
✔✔if XED is zero - ✔✔unrelated goods
✔✔Elasticity of supply - ✔✔The responsiveness of quantity supplied to a change in
price
✔✔PES - ✔✔% change in quantity supplied/ % change in price
✔✔Normal good - ✔✔a good that consumers demand more of when their incomes
increase
✔✔inferior good - ✔✔a good that consumers demand less of when their incomes
increase
✔✔substitute good - ✔✔Good which is an alternative to a particular good from the
consumer's point of view
✔✔income - ✔✔money earned over a period of time eg wages
✔✔wealth - ✔✔value of an individuals assets at a point in time
✔✔mixed economy - ✔✔where resource allocation is undertaken by state planning nd
market forces, depdnon product
✔✔free market economy - ✔✔where markets determine resource allocation with
minimal state intervention
✔✔market failure - ✔✔a situation in which a market left on its own fails to allocate
resources efficiently
✔✔government failure - ✔✔an inefficient allocation of resources caused by government
intervention in the economy
