GCSE ECONOMICS EXAMINATION TEST QUESTIONS AND
SOLUTIONS 2025/2026 GRADED A+
✔✔Define 'Determination of Price' - ✔✔The interaction of free market forces of Supply
and Demand to establish a general price level for a good or service - where there is no
pressure for price change
✔✔Define Equilibrium Price - ✔✔When Quantity supplied = Quantity demanded
✔✔FACTS - All markets are either, Competitive markets, Oligopolies or Monopolies -
✔✔FACTS - All markets are either, Competitive markets, Oligopolies or Monopolies
✔✔FACTS - Firms either compete via Price Competition or Non-Price Competition -
✔✔FACTS - Firms either compete via Price Competition or Non-Price Competition
✔✔Why do producers/firms compete? - ✔✔To enter a market
To survive in a market
To make a profit
✔✔Explain the benefits of competition - ✔✔Innovation
Increased efficiency
Increased productivity
Lower prices
✔✔Define Profit - ✔✔The amount of money left over after all costs have been paid
(when Total Revenue is greater than Total Cost
✔✔Define Productivity - ✔✔A measure of the degree of efficiency of the labour market
measured in the terms of output per unit of input
✔✔What are the costs of Productivity? - ✔✔Lead to higher unemployment
✔✔What are the benefits of Productivity? - ✔✔Lower average costs (Economies of
Scale)
Higher profits
Generates more taxes
, Increases GDP/furthers Economic Growth
✔✔How can Productivity be increased? - ✔✔Workers specializing in a part of
production (Division of Labour)
Specialization
Investment in to new technology/capital
Improving skills of workers (via training)
Better organization of workers (logistics)
✔✔Define 'Economies of Scale' - ✔✔The advantages a firm can gain by increasing the
scale of production, leading to a fall in average costs
✔✔What are all the types of Economies of Scales? - ✔✔Technological economies;
Specialist equipment
Economies of increased dimensions; Efficient use of storage and space (mega tankers)
Purchasing/Bulk-buying economies; Bulk discounts
Division of Labour; Specialization
Financial economies; Loans are easier as companies grow and interest rates are lower
Managerial economies; Better logistics, and improving efficiency
Marketing Economies; Better advertisement
Research and Development; innovation
Risk-Bearing economies; Takes risks with product ranges
✔✔What are the External Economies of Scale? - ✔✔Improvement of Infrastructure
Education and Training Facilities
Concentration of Firms
Location
✔✔Define Labour market - ✔✔Where workers sell their labour and employers buy their
labour ; it consists of households Supply of Labour and Firms Demand for Labour
SOLUTIONS 2025/2026 GRADED A+
✔✔Define 'Determination of Price' - ✔✔The interaction of free market forces of Supply
and Demand to establish a general price level for a good or service - where there is no
pressure for price change
✔✔Define Equilibrium Price - ✔✔When Quantity supplied = Quantity demanded
✔✔FACTS - All markets are either, Competitive markets, Oligopolies or Monopolies -
✔✔FACTS - All markets are either, Competitive markets, Oligopolies or Monopolies
✔✔FACTS - Firms either compete via Price Competition or Non-Price Competition -
✔✔FACTS - Firms either compete via Price Competition or Non-Price Competition
✔✔Why do producers/firms compete? - ✔✔To enter a market
To survive in a market
To make a profit
✔✔Explain the benefits of competition - ✔✔Innovation
Increased efficiency
Increased productivity
Lower prices
✔✔Define Profit - ✔✔The amount of money left over after all costs have been paid
(when Total Revenue is greater than Total Cost
✔✔Define Productivity - ✔✔A measure of the degree of efficiency of the labour market
measured in the terms of output per unit of input
✔✔What are the costs of Productivity? - ✔✔Lead to higher unemployment
✔✔What are the benefits of Productivity? - ✔✔Lower average costs (Economies of
Scale)
Higher profits
Generates more taxes
, Increases GDP/furthers Economic Growth
✔✔How can Productivity be increased? - ✔✔Workers specializing in a part of
production (Division of Labour)
Specialization
Investment in to new technology/capital
Improving skills of workers (via training)
Better organization of workers (logistics)
✔✔Define 'Economies of Scale' - ✔✔The advantages a firm can gain by increasing the
scale of production, leading to a fall in average costs
✔✔What are all the types of Economies of Scales? - ✔✔Technological economies;
Specialist equipment
Economies of increased dimensions; Efficient use of storage and space (mega tankers)
Purchasing/Bulk-buying economies; Bulk discounts
Division of Labour; Specialization
Financial economies; Loans are easier as companies grow and interest rates are lower
Managerial economies; Better logistics, and improving efficiency
Marketing Economies; Better advertisement
Research and Development; innovation
Risk-Bearing economies; Takes risks with product ranges
✔✔What are the External Economies of Scale? - ✔✔Improvement of Infrastructure
Education and Training Facilities
Concentration of Firms
Location
✔✔Define Labour market - ✔✔Where workers sell their labour and employers buy their
labour ; it consists of households Supply of Labour and Firms Demand for Labour
