aqa economics flashcards for unit 1-4 please

Question 1

What is the basic economic problem?

Answer 1

Scarcity of resources relative to unlimited wants.

Question 2

Define opportunity cost.

Answer 2

The value of the next best alternative foregone when a choice is made.

Question 3

What does the production possibility frontier (PPF) illustrate?

Answer 3

The maximum possible output combinations of two goods that can be produced with available resources.

Question 4

True or False: A movement along the PPF indicates economic growth.

Answer 4

False.

Question 5

What is meant by ‘market failure’?

Answer 5

When the allocation of goods and services by a free market is not efficient.

Question 6

What is a public good?

Answer 6

A good that is non-excludable and non-rivalrous.

Question 7

Fill in the blank: Demand is defined as the ________ for a good or service at a given price.

Answer 7

quantity consumers are willing and able to buy.

Question 8

What is the law of demand?

Answer 8

As the price of a good falls, the quantity demanded increases, and vice versa.

Question 9

Identify one factor that can cause a shift in the demand curve.

Answer 9

Changes in consumer income.

Question 10

What is supply?

Answer 10

The quantity of a good or service that producers are willing and able to sell at different prices.

Question 11

True or False: An increase in production costs will shift the supply curve to the right.

Answer 11

False.

Question 12

What is equilibrium price?

Answer 12

The price at which the quantity demanded equals the quantity supplied.

Question 13

What happens to equilibrium price when demand increases?

Answer 13

Equilibrium price rises.

Question 14

Fill in the blank: Elasticity measures the responsiveness of ________ to changes in price.

Answer 14

quantity demanded or supplied.

Question 15

What is price elasticity of demand (PED)?

Answer 15

A measure of how much the quantity demanded of a good responds to a change in the price of that good.

Question 16

What does it mean if demand is elastic?

Answer 16

A change in price leads to a proportionally larger change in quantity demanded.

Question 17

What is consumer surplus?

Answer 17

The difference between what consumers are willing to pay and what they actually pay.

Question 18

Define producer surplus.

Answer 18

The difference between the price producers receive for a good and the minimum price they are willing to accept.

Question 19

What is a monopoly?

Answer 19

A market structure where a single seller dominates the market.

Question 20

True or False: Perfect competition is characterized by many sellers and homogeneous products.

Answer 20

True.

Question 21

What is the main goal of firms in a capitalist economy?

Answer 21

To maximize profits.

Question 22

What is GDP?

Answer 22

Gross Domestic Product, the total value of all goods and services produced in a country in a given period.

Question 23

Fill in the blank: Inflation is defined as a sustained increase in the ________ level of prices.

Answer 23

general.

Question 24

What is the Consumer Price Index (CPI)?

Answer 24

A measure that examines the weighted average of prices of a basket of consumer goods and services.

Question 25

What are the two main types of inflation?

Answer 25

Demand-pull inflation and cost-push inflation.

Question 26

True or False: Deflation is a decrease in the general price level of goods and services.

Answer 26

True.

Question 27

What is fiscal policy?

Answer 27

Government adjustments to spending and tax rates to influence the economy.

Question 28

What is monetary policy?

Answer 28

The process by which a central bank manages money supply and interest rates.

Question 29

Fill in the blank: The main goal of monetary policy is to control ________.

Answer 29

inflation.

Question 30

What is a budget deficit?

Answer 30

When government spending exceeds its revenues.

Question 31

What is the role of the Bank of England?

Answer 31

To oversee monetary policy and maintain financial stability in the UK.

Question 32

Define the term 'trade balance'.

Answer 32

The difference between the value of a country's exports and imports.

Question 33

What is a tariff?

Answer 33

A tax imposed on imported goods.

Question 34

What is the purpose of a subsidy?

Answer 34

To lower the cost of production for producers and encourage production.

Question 35

True or False: Exchange rates only affect international trade.

Answer 35

False.

Question 36

What is a recession?

Answer 36

A significant decline in economic activity across the economy lasting more than a few months.

Question 37

What does the term 'unemployment rate' refer to?

Answer 37

The percentage of the total labor force that is unemployed but actively seeking employment.

Question 38

What are externalities?

Answer 38

Costs or benefits of a market activity borne by a third party.

Question 39

What is a negative externality?

Answer 39

An adverse effect experienced by a third party due to an economic transaction.

Question 40

Define a positive externality.

Answer 40

A beneficial effect experienced by a third party due to an economic transaction.

Question 41

What is the role of competition in a market economy?

Answer 41

To drive innovation and efficiency, benefiting consumers.

Question 42

What is a market structure?

Answer 42

The organizational and other characteristics of a market.

Question 43

Fill in the blank: The four main market structures are perfect competition, monopoly, monopolistic competition, and ________.

Answer 43

oligopoly.

Question 44

What is the law of diminishing returns?

Answer 44

As more units of a variable input are added to a fixed input, the additional output produced will eventually decrease.

Question 45

What is the difference between short-run and long-run in economics?

Answer 45

In the short-run, at least one factor of production is fixed; in the long-run, all factors can be varied.

Question 46

What is the significance of the marginal cost?

Answer 46

The cost of producing one additional unit of a good.

Question 47

What does the term 'aggregate demand' refer to?

Answer 47

The total demand for all goods and services in an economy at a given price level.

Question 48

What are the components of aggregate demand?

Answer 48

Consumption, investment, government spending, and net exports.

Question 49

True or False: An increase in interest rates typically reduces consumer spending.

Answer 49

True.

Question 50

What is the business cycle?

Answer 50

The fluctuations in economic activity that an economy experiences over time.

Question 51

What are the four phases of the business cycle?

Answer 51

Expansion, peak, contraction, and trough.

Question 52

Fill in the blank: In a recession, GDP is expected to ________.

Answer 52

decline.

Question 53

What is a trade deficit?

Answer 53

When a country's imports exceed its exports.

Question 54

What is a trade surplus?

Answer 54

When a country's exports exceed its imports.

Question 55

Define globalization.

Answer 55

The process by which businesses develop international influence or operate on an international scale.

Question 56

What is the impact of globalization on local economies?

Answer 56

It can lead to increased competition, access to larger markets, and potential job losses.

Question 57

What does the term 'capitalism' refer to?

Answer 57

An economic system characterized by private ownership of the means of production and their operation for profit.

Question 58

What is socialism?

Answer 58

An economic system where the means of production are owned and regulated by the state.

Question 59

True or False: In a capitalist economy, the government has full control over economic activities.

Answer 59

False.

Question 60

What is the role of the consumer in a market economy?

Answer 60

To drive demand for goods and services through their purchasing decisions.

Question 61

What is a market economy?

Answer 61

An economic system where supply and demand determine prices and production.

Question 62

Fill in the blank: In a mixed economy, both the ________ and the private sector play important roles.

Answer 62

government.

Question 63

What is the significance of the labor market?

Answer 63

It is where workers and employers interact, determining wages and employment levels.

Question 64

What is structural unemployment?

Answer 64

Unemployment resulting from industrial reorganization, typically due to technological change.

Question 65

What does 'underemployment' mean?

Answer 65

When individuals are working in jobs that do not utilize their skills or abilities.