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Edexcel A-level Economics Paper 1
Questions and Expert Answers the
Latest Version
Question: Economics
Answer: The study of the allocation of scarce resources.
Question: Economic Goods
Answer: Resources that are scarce.
Question: Short Run
Answer: A time period where at least one factor of production is fixed.
Question: Long Run
Answer: A time period where all factors of production are variable.
Question: Productivity
Answer: The output per unit of input.
Question: The Economic Problem
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Answer: Resources are scarce but wants are infinite.
Question: Scarcity
Answer: The world's resources are limited, there are only limited amounts of
land, water, oil, food, etc..
Therefore, resources are scarce.
Question: Free Goods
Answer: Goods that are unlimited in supply and therefore have no
opportunity cost.
Question: Economic Agents
Answer: Consumer, Business and Governments.
Agents involved in Economic transactions.
Question: 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.
Question: Opportunity Cost
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Answer: The next best alternative foregone.
Question: Economic Growth
Answer: Increase an economy's productive potential.
Question: Capital Goods
Answer: Goods intended for use in production, rather than by consumers.
Question: Consumer Goods
Answer: Goods designed for use by final consumers.
Question: Renewable Resources
Answer: A resource whose stock level can be replenished naturally over a
period of time.
Question: Non-renewable Resources
Answer: A resource whose stock level decreases over time as it is consumed.
Question: Ceteris Paribus
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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.
Question: Positive Statement
Answer: A statement based on facts which can be tested as true or false and
are value-free.
Question: Normative Statement
Answer: A statement based on value judgements which cannot be tested as
true or false.
Question: Adam Smith
Answer: The Father of Economics;
- The Invisible Hand (workings of the Price Mechanism)
- Specialisation
- Division of Labour
Question: Division of Labour
Answer: Specialisation of workers on specific tasks in the production process.
Edexcel A-level Economics Paper 1
Questions and Expert Answers the
Latest Version
Question: Economics
Answer: The study of the allocation of scarce resources.
Question: Economic Goods
Answer: Resources that are scarce.
Question: Short Run
Answer: A time period where at least one factor of production is fixed.
Question: Long Run
Answer: A time period where all factors of production are variable.
Question: Productivity
Answer: The output per unit of input.
Question: The Economic Problem
, Page | 2
Answer: Resources are scarce but wants are infinite.
Question: Scarcity
Answer: The world's resources are limited, there are only limited amounts of
land, water, oil, food, etc..
Therefore, resources are scarce.
Question: Free Goods
Answer: Goods that are unlimited in supply and therefore have no
opportunity cost.
Question: Economic Agents
Answer: Consumer, Business and Governments.
Agents involved in Economic transactions.
Question: 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.
Question: Opportunity Cost
, Page | 3
Answer: The next best alternative foregone.
Question: Economic Growth
Answer: Increase an economy's productive potential.
Question: Capital Goods
Answer: Goods intended for use in production, rather than by consumers.
Question: Consumer Goods
Answer: Goods designed for use by final consumers.
Question: Renewable Resources
Answer: A resource whose stock level can be replenished naturally over a
period of time.
Question: Non-renewable Resources
Answer: A resource whose stock level decreases over time as it is consumed.
Question: Ceteris Paribus
, Page | 4
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.
Question: Positive Statement
Answer: A statement based on facts which can be tested as true or false and
are value-free.
Question: Normative Statement
Answer: A statement based on value judgements which cannot be tested as
true or false.
Question: Adam Smith
Answer: The Father of Economics;
- The Invisible Hand (workings of the Price Mechanism)
- Specialisation
- Division of Labour
Question: Division of Labour
Answer: Specialisation of workers on specific tasks in the production process.
