AS & A Level Economics 9708 · Topic 1

Basic economic ideas and resource allocation (AS Level): past paper questions

228 real questions

Real questions on basic economic ideas and resource allocation (as level)

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In the syllabus

1.1 Scarcity, choice and opportunity cost

fundamental economic problem of scarcity.
need to make choices at all levels (individuals, firms, governments).
nature and definition of opportunity cost, arising from choices.
basic questions of resource allocation • what to produce • how to produce • for whom to produce.

1.2 Economic methodology

economics as a social science.
positive and normative statements (the distinction between facts and value judgements).
meaning of the term ceteris paribus.
importance of the time period (short run, long run, very long run).

1.3 Factors of production

nature and definition of factors of production: land, labour, capital and enterprise.
difference between human capital and physical capital.
rewards to the factors of production.
division of labour and specialisation.
role of the entrepreneur in contemporary economies: risk and organisation of the other factors of production.

1.4 Resource allocation in different economic systems

decision-making in market, planned and mixed economies.
resource allocation in these economic systems.

1.5 Production possibility curves

nature and meaning of a production possibility curve (PPC).
shape of the PPC: constant and increasing opportunity costs.
causes and consequences of shifts in a PPC.
significance of a position within a PPC.

1.6 Classification of goods and services

nature and definition of free goods and private goods (economic goods).
nature and definition of public goods.
nature and definition of merit goods: under-consumption as a result of imperfect information in the market.
nature and definition of demerit goods: over-consumption as a result of imperfect information in the market.

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