GDP measures the value of all the goods and services produced in the economy

GDP stands for gross domestic product

GDP excludes intermediate goods and services

GDP equals wages plus trading profits

Microeconomics is concerned chiefly with the economy as a whole

Macroeconomics is concerned chiefly with individual markets

Governments have no influence over market prices

When economists study the price in a market, their chief aims are to understand why the price is what it is and why it may change

An economic model is a theory based on key variables and expressed in formal terms

An economic model is tested by seeing how accurate its predictions are

Testing economic models is rarely tricky

The words ’ceteris paribus’ mean other things remaining the same

Full employment of labour

All producers using the latest technology

Stable prices

All producers having productive efficiency

The production possibility frontier is steeper at the right end than the left because some resources are better suited to making some products than others

The production possibility frontier is straight because some resources are better suited to making some products than others

The production possibility frontier is steeper at the left end than the right because some resources are better suited to making some products than others

The production possibility passes the point which represents total wants in the economy