Edexcel A Level Economics A
Edexcel A Level Economics A 1.1 Nature of Economics Exam Questions
Free Edexcel A Level Economics A exam questions on 1.1 Nature of Economics, with mark schemes. Covers scarcity, opportunity cost, PPFs, specialisation and the functions of money.
1.1 Nature of Economics exam questions
1 question pack of real past exam questions with its mark scheme. Answer every question without notes, then mark your answers line by line against the mark scheme.
StemUp mark scheme flashcards
Edexcel A Level Economics A 9EC0 Flashcards (Anki & Quizlet)
Every answer is written in mark scheme wording, so you learn exactly what examiners give marks for. Use them on Anki or Quizlet, then test yourself with the questions on this page.
£15.99View flashcards
About Edexcel A Level Economics A 1.1 Nature of Economics
1.1 is the opening topic of Theme 1 and sets up the language used across the whole course. Questions here are usually short: definitions, PPF diagrams and calculations of opportunity cost, but the ideas reappear in every later essay.
What you need to know
- Economics as a social science Economists use models built on assumptions (ceteris paribus) and must separate positive statements, which can be tested, from normative statements, which are value judgements.
- The economic problem Resources are scarce relative to unlimited wants, so every choice has an opportunity cost: the value of the next best alternative forgone.
- Production possibility frontiers A PPF shows the maximum combinations of two goods. Points on the curve are productively efficient, points inside show unemployed resources, and an outward shift shows economic growth. A concave PPF shows increasing opportunity cost.
- Specialisation and division of labour Splitting production into tasks raises productivity but brings risks such as boredom, over-dependence and structural unemployment. Specialisation needs trade, which needs money.
- Functions of money Medium of exchange, measure of value (unit of account), store of value and method of deferred payment.
- Free market, mixed and command economies Know how each allocates resources, with the views of Adam Smith, Friedrich Hayek and Karl Marx.
Common mistakes in 1.1 Nature of Economics
- Calling a normative statement positive because it contains numbers. A statement with "should" or "ought" is normative even if it quotes data.
- Defining opportunity cost as "the cost of something". It is the next best alternative forgone.
- Drawing a PPF shift when the question describes a movement along the curve, or the reverse.
- Listing the functions of money without explaining why barter fails, which is usually where the analysis marks are.
Try three 1.1 Nature of Economics exam-style questions
1. Define opportunity cost. (1 mark)
Show the mark scheme answer
The value of the next best alternative forgone when a choice is made.
2. Explain one reason why a production possibility frontier may shift outwards. (3 marks)
Show the mark scheme answer
An increase in the quantity or quality of factors of production (1), for example investment in capital or better education raising labour productivity (1), increases the maximum output the economy can produce, so the PPF shifts outwards showing economic growth (1).
3. Which of the following is a normative statement? A: Unemployment rose by 2 percent last year. B: The government should cut income tax to boost growth. C: A rise in price reduces quantity demanded. D: Inflation was 4 percent in 2023. (1 mark)
Show the mark scheme answer
B. It contains a value judgement ("should") and cannot be tested against evidence.
1.1 Nature of Economics FAQs
What does Edexcel A Level Economics 1.1 cover?
It covers economics as a social science, positive and normative statements, the economic problem, production possibility frontiers, specialisation and the division of labour, the functions of money, and free market, mixed and command economies.
Which paper tests 1.1 Nature of Economics?
It is part of Theme 1, so it is examined in Paper 1, and the ideas can also appear in Paper 3, which is synoptic.
Do I need to draw PPF diagrams?
Yes. You should be able to draw a concave PPF, show points inside and on the curve, and show outward and inward shifts, labelling both axes with the two goods.
Revise this topic with flashcards: Edexcel A Level Economics A 9EC0 Flashcards, with mark scheme answers for Anki and Quizlet.
