Edexcel AS Level Economics (A) Paper 1 exam with questions and correct verified answers// Economics AS level

Edexcel AS Level Economics (A) Paper 1 exam with questions and correct verified answers// Economics AS level


What are the 6 characteristics of money? (PUDDLE) - CORRECT ANSW-*Portability* - Portability is that money must be able to go wherever such that it is easy to transport as people travel.

*Uniformity/can't be counterfeited* - Uniformity of money calls for a standardization of money so that it looks the same and can't be faked of counterfeited

*Durability* - Durability of money is such that it can be used over and over again; hence it must survive wear and tear for long periods.

*Divisibility* - Money must be easily divided into smaller denominations to enable a person to buy different products.

*Limited supply/valuable* - Money must be available only in limited quantities to maintain its value

*(Easily) Acceptible* - Everyone must be able to accept money in exchange for goods or services

What are the four factors of production? - CORRECT ANSW-'Land' - all natural resources including oil, fish, soil, forests. The reward for land is rent.
'Labour' - the skills of the workforce and the quantity of labour they produce. The reward for labour is wages. 'Capital' - investment in man-made aids to production including buildings, factories, computers. The reward for capital is interest. 'Enterprise - the risk-taking role of business owners undertaken in the pursuit of profit. Can be considered as a specialised form of labour. The reward for enterprise is profit.

What is the fundamental economic problem?

What is meant by scarcity?

What are the three basic questions? (explain them) - CORRECT ANSW-There are finite resources and infinite wants, so we must make choices. What to produce, how and for whom.

A situation in which wants and needs are in excess of the resources available

*What to produce?* - because we can't produce everything, we need to decide what to produce and in what quantities. *How to produce?* - We need to consider how resources are used in order to receive the best
outcome/maximum use of the resources available. However, this may conflict with other economic concerns, such as equality and environment. *For whom to produce?* - because we can't satisfy all the wants of the population, decisions must be made on how many of each persons wants are to be satisfied.

What is a normative statement

What is a positive statement - CORRECT ANSW-It is a statement that contains a value judgment and cannot be tested

It is a statement that is objective and is testable

What is the PPC?

What does a movement along the PPC imply? - CORRECT ANSW-A production possibility curve shows the maximum potential output an economy can produce if all resources are fully and efficient utilised.

Movement along the PPC implies an opportunity cost in terms of the output of one good foregone to gain the output of another

What is economic growth?

What is actual economic growth?