OCR A Level Economics
ACTUAL EXAM STUDY GUIDE.
GRADED A+. WITH QUESTIONS
AND 100% VERIFIED
ANSWERS. LATEST 2026
UPDATE
normative statement - Ans✔✔-an opinion that cannot be confirmed by
referencing facts
positive statement - Ans✔✔-a statement that can be proved by referencing
facts
why are economic models used? - Ans✔✔-theories cannot be tested in a
controlled environment
the basic economic problem - Ans✔✔-scarcity - consumer wants are always
greater than available resources
opportunity cost - Ans✔✔-the next best alternative foregone
,factors of production - Ans✔✔-resources used by a firm in production
list and define the factors of production - Ans✔✔-labour - the human element,
both mental and physical
capital - man made aids to production eg technology
land - any natural resource used in production
enterprise - combining above factors to make a profit, risk taking
how can a PPC be used? - Ans✔✔-shows the efficiency of a firm and its
maximum potential efficiency
shows possible manufacturing combinations between two products and the
opportunity cost of sacrificing each product
demand - Ans✔✔-amount of a product demanded by consumers who are
willing and able to buy it at a certain price over a certain period of time
define determinants of demand
give examples - Ans✔✔-factors that determine the demand for a product.
consumer income, price of a substitute, quality, advertising, seasonal
preference
complementary good - Ans✔✔-a good commonly purchased alongside another
good
competitive demand - Ans✔✔-demand for alternative increases with price of
original
, joint demand - Ans✔✔-demand for complementary good decreases as price of
original increases
derived demand - Ans✔✔-demand for a factor of production is influenced by
demand for the product itself
composite demand - Ans✔✔-demand for a product comes from multiple
groups of consumers
substitution effect - Ans✔✔-customers from a substitute product are attracted
by a lower price
real income effect - Ans✔✔-customers can afford to buy more items alongside
a lower priced item
diminishing marginal utility - Ans✔✔-extra utility gained from consumption
decreases as more is consumed
a movement up the demand cure means - Ans✔✔-contraction of demand, a
decrease
a movement down the demand curve means - Ans✔✔-extension of demand,
an increase
a shift left of the demand curve means - Ans✔✔-a decrease in demand
ACTUAL EXAM STUDY GUIDE.
GRADED A+. WITH QUESTIONS
AND 100% VERIFIED
ANSWERS. LATEST 2026
UPDATE
normative statement - Ans✔✔-an opinion that cannot be confirmed by
referencing facts
positive statement - Ans✔✔-a statement that can be proved by referencing
facts
why are economic models used? - Ans✔✔-theories cannot be tested in a
controlled environment
the basic economic problem - Ans✔✔-scarcity - consumer wants are always
greater than available resources
opportunity cost - Ans✔✔-the next best alternative foregone
,factors of production - Ans✔✔-resources used by a firm in production
list and define the factors of production - Ans✔✔-labour - the human element,
both mental and physical
capital - man made aids to production eg technology
land - any natural resource used in production
enterprise - combining above factors to make a profit, risk taking
how can a PPC be used? - Ans✔✔-shows the efficiency of a firm and its
maximum potential efficiency
shows possible manufacturing combinations between two products and the
opportunity cost of sacrificing each product
demand - Ans✔✔-amount of a product demanded by consumers who are
willing and able to buy it at a certain price over a certain period of time
define determinants of demand
give examples - Ans✔✔-factors that determine the demand for a product.
consumer income, price of a substitute, quality, advertising, seasonal
preference
complementary good - Ans✔✔-a good commonly purchased alongside another
good
competitive demand - Ans✔✔-demand for alternative increases with price of
original
, joint demand - Ans✔✔-demand for complementary good decreases as price of
original increases
derived demand - Ans✔✔-demand for a factor of production is influenced by
demand for the product itself
composite demand - Ans✔✔-demand for a product comes from multiple
groups of consumers
substitution effect - Ans✔✔-customers from a substitute product are attracted
by a lower price
real income effect - Ans✔✔-customers can afford to buy more items alongside
a lower priced item
diminishing marginal utility - Ans✔✔-extra utility gained from consumption
decreases as more is consumed
a movement up the demand cure means - Ans✔✔-contraction of demand, a
decrease
a movement down the demand curve means - Ans✔✔-extension of demand,
an increase
a shift left of the demand curve means - Ans✔✔-a decrease in demand
