Process
WJEC AS-Level Economics 1520QS
Scarcity and Choice
Topic overviewScarcity, choice and opportunity costProduction possibility frontiers (PPFs): Production possibility frontier diagrams to depict choiceProduction possibility frontiers (PPFs): Factors which may shift the PPF inwards or outwardsSpecialisation, division of labour and exchange: Advantages and disadvantages of specialisationSpecialisation, division of labour and exchange: Productivity
Demand and Supply in Product Markets
Topic overviewFactors influencing demand and supply in product markets: Product marketFactors influencing demand and supply: Main influences on demand and supply in product marketsThe determination of equilibrium price: Equilibrium price and output, and disequilibriumThe determination of equilibrium price: How the market adjusts to a new equilibriumThe determination of equilibrium price: Consumer and producer surplus on the diagramConsumer and producer surplusPrice, income and cross price elasticities: Price elasticity of demandPrice, income and cross price elasticities: Income and cross price elasticity of demandPrice, income and cross price elasticities: Price elasticity of supply, uses of elasticity and tax incidence
Demand and Supply in Labour Markets
Topic overviewWage determination: Demand for labour as a derived demandWage determination: Equilibrium wage rate and shifts in labour demand and supplyWage determination: Elasticity of demand for labour and Elasticity of supply of labourWage determination: Causes of wage differentials, Effects of wage differentials, and wages in WalesLabour market issues: Factors which affect flexibility in labour marketsLabour market issues: Effects of the statutory national minimum wage on labour marketsLabour market issues: Impact of migration on labour markets
Resource Allocation
Market Failure
Topic overviewUnderstanding market failure: Market failureUnderstanding market failure: Public goods, Merit and demerit goodsUnderstanding market failure: ExternalitiesUnderstanding market failure: Externalities of consumption and monopoly powerUnderstanding market failure: Information asymmetries and gaps, Income inequalityUnderstanding market failure: Volatile prices and externality diagramsWhy and how governments intervene in markets: Reasons for government intervention in marketsWhy and how governments intervene in markets: Maximum prices, road pricing, pollution permits and other interventionsWhy and how governments intervene in markets: Evaluating government interventionThe effects of government intervention: Government intervention can create distortions in marketsThe effects of government intervention: Reasons for government failure
Macroeconomic Theory (AS)
Topic overviewThe circular flow of income model: Flows in the circular flow modelThe circular flow of income model: Injections into and withdrawals from the circular flowThe circular flow of income model: Model to explain the concept of national income equilibriumThe units of aggregate demand (AD): Units of aggregate demand: consumptionThe units of aggregate demand (AD): Factors affecting consumption and investment, and the AD curveThe AD function: Why an AD function will slope downward from left to rightThe AD function: Changes in the unitsThe aggregate supply (AS) function: Shape of the Keynesian long run aggregate supply curveThe aggregate supply (AS) function: Factors which might result in a shift in LRASAD/AS analysis
Government Policy Objectives
Topic overviewEconomic growth: Actual and potential growth, output gaps and the business cycleEconomic growth: Benefits of economic growth for households, government and firmsEconomic growth: Illustrating growth on PPF and AD/AS diagramsUnemployment (AS): Measurement and typesUnemployment (AS): CostsUnemployment (AS): Causes
Policy Instruments (AS)
Topic overviewFiscal policy: FrameworkFiscal policy: Direct and indirect taxes and demand side fiscal policyFiscal policy: Automatic stabilisers, time lags and the Laffer curveMonetary policy: Bank of England and the Monetary Policy Committee, Inflation targetMonetary policy: Bank Rate and the transmission mechanismExchange rates and exchange rate policy: Exchange rates in a free marketExchange rates and exchange rate policy: Exchange rate policySupply side policies: Aims of supply side policiesSupply side policies: Market-based supply side policies and Limitations of supply side policies
Resource Allocation
- 2 subtopics
- 8 things to know
- AS Units 1 and 2
What Resource Allocation covers
Resource Allocation is AS content, examined in both AS Unit 1 and AS Unit 2, which each cover the full AS content. 22 recall questions across 2 subtopics.
Where it is assessed
AS Units 1 and 2
Introduction to Economic Principles and Economics in Action, both covering the full AS content.
Check the WJEC specification ↗The 2 subtopics
Each one has its own page. WJEC AS Economics students sit this topic in the first year.
- How resources are allocated in a free market economy: Role of profitRecall questions on The role of profit, the function of prices and interrelationships between markets.Open →
- How resources are allocated in a free market economy: Derived demand and the assumptions of a free marketDerived demand for factors of production, and the free-market assumptions of many buyers and sellers, perfect information and rational behaviour, with why real agents fall short of them.Open →
What you need to know
Answer each one before you reveal it.
Your recallNot started
Process
How do price changes move resources between markets?
Key term
What happens to the demand for factors of production when demand increases in a product market?
Key term
If demand for electric vehicles increases, what would happen to the demand for lithium used in batteries?
Key term
What does profit signal to firms in a free market economy?
Key term
What assumption does a free market make about the number of buyers and sellers?
Key term
How do high profits affect the entry of firms into an industry?
Key term
Define rational behaviour in economics.
Take Resource Allocation further
The same content, four other ways.
Commonly confused
Pairs that lose marks when they are blurred together.
The rationing function of prices vs The incentive function of prices
The rationing function of prices: allocating a scarce good to the buyers who are willing and able to pay most. The incentive function of prices: signalling to producers that it is worth raising or lowering their output.
Questions from this topic
Each one with the model answer underneath.
- 1
What does profit signal to firms in a free market economy?
Model answer
Profit signals where consumer demand is high relative to supply, indicating which industries are most valued by consumers.
- 2
How do high profits affect the entry of firms into an industry?
Model answer
High profits attract new firms and resources into an industry, as entrepreneurs seek to benefit from the profitable opportunities.
- 3
What happens to firms and resources when an industry experiences low or negative profits?
Model answer
Firms exit the industry and resources move elsewhere to more profitable uses.
- 4
How does resource allocation shift across markets in a free market economy?
Model answer
Resources shift across markets in response to price signals, moving from less profitable to more profitable uses.
- 5
Explain the rationing function of prices in a free market.
Model answer
Prices allocate goods to consumers who value them most, as only those willing and able to pay the market price will obtain the good.
- 6
What does a rising price signal to market participants?
Model answer
Rising prices indicate increased scarcity or increased demand for a good or service.
What is inside Levo
Six ways to work the same material.
Resource Allocation revision questions
- Is Resource Allocation examined at AS in WJEC Economics?
- Yes. It sits in AS Units 1 and 2, which you take in the first year, so it is on the AS paper as well as counting towards the full A level.
- What does Resource Allocation cover in WJEC AS-Level Economics?
- 2 subtopics: how resources are allocated in a free market economy: role of profit and how resources are allocated in a free market economy: derived demand and the assumptions of a free market. Each one has its own page with questions and model answers.
- How is Resource Allocation organised?
- By the WJEC 1520QS specification, subtopic by subtopic, so it matches the order you are taught it in.
Every question in Resource Allocation, on a schedule.
Attempt a question from memory, write the correct version, then attempt it again. Levo records the jump between your first attempt and your last, and brings each question back on the day you are due to forget it.
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