AQA AS Economics All Definitions Exam Graded
A+ Latest % Correct
positive statement - ANSWER: a statement of fact that can be scientifically tested to
see if it is correct or incorrect
normative statement - ANSWER: a statement that includes a value judgement and
cannot be refuted just by looking at the evidence
need - ANSWER: something that is necessary for human survival, such as food,
clothing, warmth, or shelter
want - ANSWER: something that is desirable, such as fashionable clothing, but is not
necessary for human survival
economic welfare - ANSWER: the economic well-being of an individual, a group
within society, or an economy
production - ANSWER: a process, or set of processes, that converts inputs into
output of goods
capital good - ANSWER: a good which is used in the production of other goods or
services. also known as a producer good
consumer good - ANSWER: a good which is consumed by individuals or households
to satisfy their needs or wants
factors of production - ANSWER: inputs into the production process, such as land,
labour, capital, and enterprise
finite resource - ANSWER: a resource, such as oil, which is scarce and runs out as it is
used. also known as a non-renewable resource
renewable resource - ANSWER: a resource, such as timber, that with careful
management can be renewed as it is used
fundamental economic problem - ANSWER: how best to make decisions about the
allocation of scarce resources among competing uses so as to improve and maximise
human happiness and welfare
scarcity - ANSWER: results from the fact that people have unlimited wants but the
resources needed to meet these wants are limited. people would like to consume
more goods and services than the economy is able to produce with its limited
resources
opportunity cost - ANSWER: the cost of giving up the next best alternative
, production possibility frontier - ANSWER: a curve depicting the various combinations
of two products (or types of products) that can be produced when all the available
resources are fully and efficiently employed
economic growth - ANSWER: the increase in the potential level of real output the
economy can produce in a period of time
full employment - ANSWER: when all who are willing and able to work are employed
unemployment - ANSWER: when not all of those who are willing and able to work
are employed
productive efficiency - ANSWER: for the economy as a whole this occurs when it is
impossible to produce more of one good without producing less of another. For a
firm it occurs when the average total cost of production is minimised
allocative efficiency - ANSWER: occurs when the available economic resources are
used to produce the combination of goods and services that best matches people's
tastes and preferences
competitive market - ANSWER: a market in which a large number of buyers and
sellers possess good market information and can easily enter or leave a market
equilibrium price - ANSWER: the price at which planned demand for a good or
service exactly equals planned supply
supply - ANSWER: the quantity of a good or service that firms are willing and able to
sell at given prices in a given period of time
demand - ANSWER: the quantity of a good or service that consumers are willing and
able to buy at given prices in a given period of time. for economists, demand is
always effective demand
effective demand - ANSWER: the desire for a good or service backed by the ability to
pay
market demand - ANSWER: the quantity of a good or service that all the consumers
in a market are willing and able to buy at at different market prices
condition of demand - ANSWER: a determinant of demand, other than the good's
own price, that fixes the position of the demand curve
increase in demand - ANSWER: a rightward shift of the demand curve
decrease in demand - ANSWER: a leftward shift of the demand curve
A+ Latest % Correct
positive statement - ANSWER: a statement of fact that can be scientifically tested to
see if it is correct or incorrect
normative statement - ANSWER: a statement that includes a value judgement and
cannot be refuted just by looking at the evidence
need - ANSWER: something that is necessary for human survival, such as food,
clothing, warmth, or shelter
want - ANSWER: something that is desirable, such as fashionable clothing, but is not
necessary for human survival
economic welfare - ANSWER: the economic well-being of an individual, a group
within society, or an economy
production - ANSWER: a process, or set of processes, that converts inputs into
output of goods
capital good - ANSWER: a good which is used in the production of other goods or
services. also known as a producer good
consumer good - ANSWER: a good which is consumed by individuals or households
to satisfy their needs or wants
factors of production - ANSWER: inputs into the production process, such as land,
labour, capital, and enterprise
finite resource - ANSWER: a resource, such as oil, which is scarce and runs out as it is
used. also known as a non-renewable resource
renewable resource - ANSWER: a resource, such as timber, that with careful
management can be renewed as it is used
fundamental economic problem - ANSWER: how best to make decisions about the
allocation of scarce resources among competing uses so as to improve and maximise
human happiness and welfare
scarcity - ANSWER: results from the fact that people have unlimited wants but the
resources needed to meet these wants are limited. people would like to consume
more goods and services than the economy is able to produce with its limited
resources
opportunity cost - ANSWER: the cost of giving up the next best alternative
, production possibility frontier - ANSWER: a curve depicting the various combinations
of two products (or types of products) that can be produced when all the available
resources are fully and efficiently employed
economic growth - ANSWER: the increase in the potential level of real output the
economy can produce in a period of time
full employment - ANSWER: when all who are willing and able to work are employed
unemployment - ANSWER: when not all of those who are willing and able to work
are employed
productive efficiency - ANSWER: for the economy as a whole this occurs when it is
impossible to produce more of one good without producing less of another. For a
firm it occurs when the average total cost of production is minimised
allocative efficiency - ANSWER: occurs when the available economic resources are
used to produce the combination of goods and services that best matches people's
tastes and preferences
competitive market - ANSWER: a market in which a large number of buyers and
sellers possess good market information and can easily enter or leave a market
equilibrium price - ANSWER: the price at which planned demand for a good or
service exactly equals planned supply
supply - ANSWER: the quantity of a good or service that firms are willing and able to
sell at given prices in a given period of time
demand - ANSWER: the quantity of a good or service that consumers are willing and
able to buy at given prices in a given period of time. for economists, demand is
always effective demand
effective demand - ANSWER: the desire for a good or service backed by the ability to
pay
market demand - ANSWER: the quantity of a good or service that all the consumers
in a market are willing and able to buy at at different market prices
condition of demand - ANSWER: a determinant of demand, other than the good's
own price, that fixes the position of the demand curve
increase in demand - ANSWER: a rightward shift of the demand curve
decrease in demand - ANSWER: a leftward shift of the demand curve
