"price elasticity of demand"

WJEC A-level economics revision guide

Specific WJEC A-level economics revision guide (units 1,2,3,4) – just £8.95
Updated for the new WJEC economics syllabus. Last updated June 2022.
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Also suitable for Eduqas. Eduqas is part of WJEC and it is the same syllabus.
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Significantly expanded on previous version, with not just required knowledge, but also examples of evaluation for each topic.
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Inelastic supply

Supply is price inelastic if a change in price causes a smaller percentage change in supply. (PES of less than one) Example of inelastic supply – Price of rents falls by 20%; Q.Supply declines by 1%. PES = 0.05 Diagram of inelastic supply In this case, an increase in price from £30 to £40 has …

Factors that affect the profitability of firms

The essence of profitability is a firms Revenue – Costs with revenue depending upon price and quantity of the good sold. These factors will all determine the profitability of firms 1. The degree of competition a firm faces. If a firm has monopoly power then it has little competition. Therefore demand will be more inelastic. …

Specialisation and division of labour

Specialisation occurs when workers are assigned specific tasks within a production process. Workers will require less training to be an efficient worker. Therefore this will lead to an increase in labour productivity and firms will be able to benefit from economies of scale (lower average costs with increased output) and increased efficiency. Examples of specialisation …

Exchange rates

The exchange rate is the rate at which one currency trades against another on the foreign exchange market If the present exchange rate is £1=$1.42, this means that to go to America you would get $142 for £100. Similarly, if an American came to the UK, he would have to pay $142 to get £100. …

Time Lags

In economics we often see a delay between an economic action and a consequence. This is known as a time lag. An impact of time lags is that the effect of policy may be more difficult to quantify because it takes a period of time to actually occur. Example of time lags Change in interest …

The Terms of trade refer to the relative price of exports/imports. A decline in the terms of trade means the price of exports falls relative to imports. Imports become more expensive. Typically a country will have lower living standards and less ability to import. Impact of decline in terms of trade on a developing economy …