OCR A Level Economics Exam 2026
Questions and Answers Graded A+
normative statement - Correct answer-an opinion that cannot be confirmed by
referencing facts
positive statement - Correct answer-a statement that can be proved by referencing
facts
why are economic models used? - Correct answer-theories cannot be tested in a
controlled environment
the basic economic problem - Correct answer-scarcity - consumer wants are always
greater than available resources
opportunity cost - Correct answer-the next best alternative foregone
factors of production - Correct answer-resources used by a firm in production
list and define the factors of production - Correct answer-labour - the human
element, both mental and physical
capital - man made aids to production eg technology
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,land - any natural resource used in production
enterprise - combining above factors to make a profit, risk taking
how can a PPC be used? - Correct answer-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 - Correct answer-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 - Correct answer-factors that determine the demand for a product.
consumer income, price of a substitute, quality, advertising, seasonal preference
complementary good - Correct answer-a good commonly purchased alongside
another good
competitive demand - Correct answer-demand for alternative increases with price
of original
joint demand - Correct answer-demand for complementary good decreases as price
of original increases
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,derived demand - Correct answer-demand for a factor of production is influenced
by demand for the product itself
composite demand - Correct answer-demand for a product comes from multiple
groups of consumers
substitution effect - Correct answer-customers from a substitute product are
attracted by a lower price
real income effect - Correct answer-customers can afford to buy more items
alongside a lower priced item
diminishing marginal utility - Correct answer-extra utility gained from
consumption decreases as more is consumed
a movement up the demand cure means - Correct answer-contraction of demand, a
decrease
a movement down the demand curve means - Correct answer-extension of demand,
an increase
a shift left of the demand curve means - Correct answer-a decrease in demand
a shift right of the demand curve means - Correct answer-an increase in demand
supply - Correct answer-the amount of a product a producer is willing and able to
sell at a certain price over a certain period of time
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, list some determinants of supply - Correct answer-price, availability of factors of
production
natural events
revenue generated by other products
consumer confidence
production technology
tax levels
equilibrium price - Correct answer-the intersection of the demand and supply
curves
why do prices settle at equilibrium? - Correct answer-either firms must reduce
prices to sell enough or firms increase price due to excess demand
time lags - Correct answer-a delay in an economy's response to changes in
variables
boom - Correct answer-fast economic growth, low unemployment
downturn - Correct answer-economic growth slower than in a boom
recession - Correct answer-contraction of the economy for at least two consecutive
quarters
©COPYRIGHT 2026, ALL RIGHTS RESERVED 4
Questions and Answers Graded A+
normative statement - Correct answer-an opinion that cannot be confirmed by
referencing facts
positive statement - Correct answer-a statement that can be proved by referencing
facts
why are economic models used? - Correct answer-theories cannot be tested in a
controlled environment
the basic economic problem - Correct answer-scarcity - consumer wants are always
greater than available resources
opportunity cost - Correct answer-the next best alternative foregone
factors of production - Correct answer-resources used by a firm in production
list and define the factors of production - Correct answer-labour - the human
element, both mental and physical
capital - man made aids to production eg technology
©COPYRIGHT 2026, ALL RIGHTS RESERVED 1
,land - any natural resource used in production
enterprise - combining above factors to make a profit, risk taking
how can a PPC be used? - Correct answer-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 - Correct answer-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 - Correct answer-factors that determine the demand for a product.
consumer income, price of a substitute, quality, advertising, seasonal preference
complementary good - Correct answer-a good commonly purchased alongside
another good
competitive demand - Correct answer-demand for alternative increases with price
of original
joint demand - Correct answer-demand for complementary good decreases as price
of original increases
©COPYRIGHT 2026, ALL RIGHTS RESERVED 2
,derived demand - Correct answer-demand for a factor of production is influenced
by demand for the product itself
composite demand - Correct answer-demand for a product comes from multiple
groups of consumers
substitution effect - Correct answer-customers from a substitute product are
attracted by a lower price
real income effect - Correct answer-customers can afford to buy more items
alongside a lower priced item
diminishing marginal utility - Correct answer-extra utility gained from
consumption decreases as more is consumed
a movement up the demand cure means - Correct answer-contraction of demand, a
decrease
a movement down the demand curve means - Correct answer-extension of demand,
an increase
a shift left of the demand curve means - Correct answer-a decrease in demand
a shift right of the demand curve means - Correct answer-an increase in demand
supply - Correct answer-the amount of a product a producer is willing and able to
sell at a certain price over a certain period of time
©COPYRIGHT 2026, ALL RIGHTS RESERVED 3
, list some determinants of supply - Correct answer-price, availability of factors of
production
natural events
revenue generated by other products
consumer confidence
production technology
tax levels
equilibrium price - Correct answer-the intersection of the demand and supply
curves
why do prices settle at equilibrium? - Correct answer-either firms must reduce
prices to sell enough or firms increase price due to excess demand
time lags - Correct answer-a delay in an economy's response to changes in
variables
boom - Correct answer-fast economic growth, low unemployment
downturn - Correct answer-economic growth slower than in a boom
recession - Correct answer-contraction of the economy for at least two consecutive
quarters
©COPYRIGHT 2026, ALL RIGHTS RESERVED 4
