ExamTeXA-Level Economics · Nature of economics and economic methodology · last updated
Nature of economics and economic methodology practice questions (A-Level Economics)
This theme covers economics as a social science, positive and normative statements, scarcity and opportunity cost, production possibility frontiers, specialisation and the division of labour, the functions of money, and types of economy. Below is the one free A-Level Economics question on it from our free exams, with its worked answer behind a toggle, then 7 key terms with the formulas typeset, and a door to make an A-Level Economics-style paper on this topic from your own notes. The free exams are typeset PDFs with an answer key; the exam downloads without a signup.
Sample questions
The one free A-Level Economics question on this topic, from the free A-Level Economics Practice Paper. Each answer is behind its own toggle; the whole paper, its PDF and the full answer key are on the exam page.
- Question 11 mark · Production possibility frontiersAn economy producing only capital goods and consumer goods is operating on its production possibility frontier. It moves along the frontier to a point with more capital goods and fewer consumer goods. This movement illustrates:
- A.economic growth, because more capital goods are produced
- B.unemployment of some factors of production
- C.the opportunity cost of capital goods in terms of consumer goods forgone
- D.productive inefficiency, because consumer good output has fallen
- A.
Key terms
The definitions and formulas A-Level Economics expects for nature of economics and economic methodology, typeset as they appear on the paper.
- Positive and normative statements
- Positive statements are objective and testable; normative statements are value judgements. Spotting the normative claim in an extract is a standard short question, and evaluation requires separating the two.
- Scarcity and opportunity cost
- The basic economic problem: finite resources against infinite wants. Opportunity cost is the next best alternative forgone, and it applies to consumers, producers and governments alike.
- Production possibility frontier (PPF)
- The maximum output combinations of two goods with existing resources and technology. Points on the frontier are productively efficient, movements along it show opportunity cost, and a shift outward is economic growth.
- Specialisation and the division of labour
- Concentrating on a narrow range of tasks raises productivity (Adam Smith's pin factory) at the cost of monotony and dependence on others, which is why exchange and money are needed.
- Functions of money
- A medium of exchange, a measure of value (unit of account), a store of value and a method of deferred payment. Money solves the double-coincidence problem of barter.
- Free market, command and mixed economies
- The price mechanism allocates resources in a free market; the state does in a command economy; most economies mix both. Hayek argued for the market's use of dispersed information, Marx for central planning.
- Rational decision-making and behavioural economics
- Traditional theory assumes consumers maximise utility and firms maximise profit with full information. Behavioural economics adds bounded rationality, habitual behaviour, anchoring and social norms, and uses nudges such as default choices.
Frequently asked questions
Are there free nature of economics and economic methodology practice questions for A-Level Economics?
Yes. 1 question on nature of economics and economic methodology appears in the free A-Level Economics Practice Paper, and the sample questions on this page come from it with worked answers. Each exam can be read online or downloaded as a typeset PDF without signing up, and its full answer key is emailed on request.
How do I make an A-Level Economics practice paper on nature of economics and economic methodology from my notes?
Open the create page with the A-Level Economics style preselected, tick "Nature of economics and economic methodology" under the units to cover (or upload your notes and slides on it), choose the question mix and time limit, and generate. You get a typeset PDF in the A-Level format with a separate answer key, in about a minute. It is free to try, no card needed.
What does A-Level Economics expect you to know about nature of economics and economic methodology?
This theme covers economics as a social science, positive and normative statements, scarcity and opportunity cost, production possibility frontiers, specialisation and the division of labour, the functions of money, and types of economy. The terms to have cold: Positive and normative statements, Scarcity and opportunity cost, Production possibility frontier (PPF), Specialisation and the division of labour, Functions of money. Each is defined below with its formula typeset where one applies.
What is the A-Level Economics exam format?
The A-Level Economics guide explains the papers, their timing and mark allocation, with a sample question and mark scheme and the common mistakes, and links to the generator with the A-Level Economics style preselected.
Other A-Level Economics topics
- How markets work: demand, supply, elasticity
- Market failure and government intervention
- Measures of economic performance
- Aggregate demand and aggregate supply
- National income, growth and the multiplier
- Macroeconomic objectives and policies
- Business growth, market structures and the labour market
- Globalisation, trade and exchange rates
- Poverty, inequality and development
- The financial sector
All A-Level Economics topics · A-Level Economics exam guide · All free practice exams
Make an A-Level Economics paper on nature of economics and economic methodology from your notes
Open "Pick your exam" with the A-Level Economics style preselected and tick "Nature of economics and economic methodology", or upload your notes on it. You get a typeset paper in the A-Level format with a separate answer key.