Theme 1 AO1

Question 1

what is price elasticity of demand

Answer 1

a measure of how demand of a good changes in response to a change in price

Question 2

what is price elasticity of supply

Answer 2

a measure of the quantity supplied of a good in response to a change in price

Question 3

what is cross price elasticity

Answer 3

a measure of how demand of one good changes in relation to a price change of another good

Question 4

what is specialisation

Answer 4

narrowing production to only a few specific goods

Question 5

what is a public good

Answer 5

a good that is both non-rivalrous and non-excludable

Question 6

what is government intervention

Answer 6

any government action that aims to change the equilibrium in a market

Question 7

what is a free market

Answer 7

where prices of goods and services in a market are determined by buyers and sellers

Question 8

what is a mixed economy

Answer 8

an economy that combines elements of the free markets and government intervention