GCSE ECONOMICS STUDY GUIDE QUESTIONS AND
SOLUTIONS 2025/2026 GRADED A+
✔✔Tertiary Sector - ✔✔Involves the supplying of services to consumers and
businesses.
✔✔Fixed Cost - ✔✔Cost of production remains the same even though the level of
output changes. Eg - rents, advertising costs, insurance premiums, interest payments.
✔✔Variable Cost - ✔✔Cost of production varies with the level of output. Eg - raw
materials, packaging, labour.
✔✔Total Cost - ✔✔*Total Cost = Fixed Cost + Variable Cost*
Cost to a firm producing all output over a period of time.
✔✔Average Cost - ✔✔*Average Cost = Total Cost / Total Quantity Produced*
Cost of producing a simple unit of output.
✔✔Total Revenue - ✔✔*Total Revenue = Price x Quantity*
Amount of money a firm receives from selling its output.
✔✔Competition - ✔✔Rivalry that exists between firms when trying to see goods to the
same group of customers.
✔✔Innovation - ✔✔Constantly improving and renovating a product and coming up with
different ideas to attract customers.
✔✔Product Differentiation - ✔✔Firms trying to persuade customers that their product ids
different from their rivals.
✔✔Monopoly - ✔✔Market is dominated by one firm.
✔✔Oligopoly - ✔✔Market is dominated by few large firms.
✔✔Patent - ✔✔A licence which grants permission to operate as a sole producer of a
newly designed product.
✔✔Cartel - ✔✔A group of firms or countries join together and agree on the pricing levels
in the market.
✔✔Public Sector - ✔✔Organisations which are owned and controlled by the central
government.
, ✔✔Private Sector - ✔✔Goods and services are owned and provided by the individuals
or group of individuals.
✔✔Globalisation - ✔✔Firms sell their products all over the world.
✔✔Foreign Direct Investment - ✔✔A company makes an investment in a foreign
country.
✔✔Development Aid - ✔✔It is given to less developed countries by governments of
developed countries to help the long term development of a country.
✔✔Grants - ✔✔It is form of development aid where a government if developed country
gives a cash sum to a government of less developed country for a specific purpose.
✔✔Loan - ✔✔It is form of development aid given in the form of low interest or interest
free loan which is expected to be repaid at some point.
✔✔Humanitarian Aid - ✔✔It is designed to help resolve short term problems of a
country such as starvation or natural disaster.
✔✔Protection - ✔✔Government protects their domestic producers from overseas
competition and they give financial help to exporters.
✔✔World Trade Organisation - ✔✔Is an international organisation that promotes free
trade by persuading countries to abolish tariffs and other barriers.
✔✔Market - ✔✔Buyers and sellers communicate and exchange goods for money.
✔✔Equilibrium Price - ✔✔Price where supply and demand are equal.
✔✔Administrative Regulations - ✔✔Regulations implemented by the government of a
country to regulate trade.
✔✔Allocation of Resources - ✔✔Economic decisions concerning the use of the factors
of production
✔✔Barriers to Entry - ✔✔In competition, barriers to entry prevent or make it difficult for
firms to enter an industry.
✔✔Central Bank - ✔✔The main bank in a country which issues notes, coins and
implements monetary policies. It manages everything including the government's
accounts.
SOLUTIONS 2025/2026 GRADED A+
✔✔Tertiary Sector - ✔✔Involves the supplying of services to consumers and
businesses.
✔✔Fixed Cost - ✔✔Cost of production remains the same even though the level of
output changes. Eg - rents, advertising costs, insurance premiums, interest payments.
✔✔Variable Cost - ✔✔Cost of production varies with the level of output. Eg - raw
materials, packaging, labour.
✔✔Total Cost - ✔✔*Total Cost = Fixed Cost + Variable Cost*
Cost to a firm producing all output over a period of time.
✔✔Average Cost - ✔✔*Average Cost = Total Cost / Total Quantity Produced*
Cost of producing a simple unit of output.
✔✔Total Revenue - ✔✔*Total Revenue = Price x Quantity*
Amount of money a firm receives from selling its output.
✔✔Competition - ✔✔Rivalry that exists between firms when trying to see goods to the
same group of customers.
✔✔Innovation - ✔✔Constantly improving and renovating a product and coming up with
different ideas to attract customers.
✔✔Product Differentiation - ✔✔Firms trying to persuade customers that their product ids
different from their rivals.
✔✔Monopoly - ✔✔Market is dominated by one firm.
✔✔Oligopoly - ✔✔Market is dominated by few large firms.
✔✔Patent - ✔✔A licence which grants permission to operate as a sole producer of a
newly designed product.
✔✔Cartel - ✔✔A group of firms or countries join together and agree on the pricing levels
in the market.
✔✔Public Sector - ✔✔Organisations which are owned and controlled by the central
government.
, ✔✔Private Sector - ✔✔Goods and services are owned and provided by the individuals
or group of individuals.
✔✔Globalisation - ✔✔Firms sell their products all over the world.
✔✔Foreign Direct Investment - ✔✔A company makes an investment in a foreign
country.
✔✔Development Aid - ✔✔It is given to less developed countries by governments of
developed countries to help the long term development of a country.
✔✔Grants - ✔✔It is form of development aid where a government if developed country
gives a cash sum to a government of less developed country for a specific purpose.
✔✔Loan - ✔✔It is form of development aid given in the form of low interest or interest
free loan which is expected to be repaid at some point.
✔✔Humanitarian Aid - ✔✔It is designed to help resolve short term problems of a
country such as starvation or natural disaster.
✔✔Protection - ✔✔Government protects their domestic producers from overseas
competition and they give financial help to exporters.
✔✔World Trade Organisation - ✔✔Is an international organisation that promotes free
trade by persuading countries to abolish tariffs and other barriers.
✔✔Market - ✔✔Buyers and sellers communicate and exchange goods for money.
✔✔Equilibrium Price - ✔✔Price where supply and demand are equal.
✔✔Administrative Regulations - ✔✔Regulations implemented by the government of a
country to regulate trade.
✔✔Allocation of Resources - ✔✔Economic decisions concerning the use of the factors
of production
✔✔Barriers to Entry - ✔✔In competition, barriers to entry prevent or make it difficult for
firms to enter an industry.
✔✔Central Bank - ✔✔The main bank in a country which issues notes, coins and
implements monetary policies. It manages everything including the government's
accounts.
