Summary
Summary Economics A level theme 1 revision notes
- Course
- Institution
- Book
This is revision notes for unit 1 economics A, the first year of A level economics A
[Show more]
Connected book
Book Title:
Author(s):
- Edition:
- ISBN:
- Edition:
More summaries for
-
Theme 1: Introduction Notes
-
YEAR 1 AS / A LEVEL MICROECONOMICS SUMMARY NOTES
-
Summary Pearson Edexcel A-level Economics A Student Guide: Theme 1 Introduction to markets and market failure, ISBN: 9781510456891 Theme 1: Introduction to markets and market failure (9EC0)
Seller
Follow
marianakas
Content preview
Nature of Economics:● Economic goods = resources which are scarce because their use has an opportunity
cost
● Free goods = resources which are not scarce and therefore incur no opportunity cost
● Renewable resources = resources which can be repeatedly exploited as they can renew
themselves
● Non-renewable resources = resources which once exploited cannot be renewed.
● The basic economic problem = resources have to be allocated between competing uses
because wants are infinite whilst resources are scarce.
● Trying to solve the basic economic problem we must determine:
- What should be produced?
- How should it be produced?
- For whom should it be produced?
● Economic agents:
- Governments
- Consumers
- Firms/ businesses
● Ceteris Paribus = all else remains the same ‘assuming ceteris paribus’ (assumption).
● Opportunity cost = the next best alternative foregone - opportunity cost is what has to be
given up when spending on an item, opp. Cost of 1 chocolate bar is 2 bags of crisps.
● Factors of production:
- Land
- Labour
- Capital (machinery)
- Enterprise
● Production Possibility Frontiers (PPF):
- PPF shows how resources are allocated in an economy
- PPF = the maximum potential output of two goods, assuming all factors of
production are fully and efficiently employed.
- Economy cannot be on a point outside the curve because it exceeds maximum
efficiency -
inefficient if inside
the curve
, - When PPF shifts outwards = economic growth
- Can be caused by increase in quantity/ quality of factors of
factors of production
- Inwards shift = due to depletion of resources/ natural
resources
- Examples:
Increase in quality of resources - outwards shift of PPF
Increased u/e - inwards shift of PPF
Increased numbers of workers in economy - outwards shift
of PPF
● Capital goods = goods that are used in the production of
other goods
● Productivity = is output per factor input per time period
● Consumer goods = goods that satisfy needs and wants directly
● Specialisation = is when an entity concentrates on the production of one product or one
part of the production process
- Specialisation by individuals - division of labour = is when the production is
broken down into separate tasks
- Advantages:
- Increased productivity- increase in outputs so higher profits
- More goods available as more specialised goods are available for export
- Less training costs
- Development of skills leading to greater productivity (when productivity goes up,
costs per unit go down
- Disadvantages
- Boredom- (productivity decreases, costs per unit increases) cause quitting
increased training costs
- Breakdown in chain of production can cause chaos
● Perishable = rot
● Commodities = raw materials
● Functions of money:
- Medium of exchange - used to buy and sell goods and services, avoids the need
for a ‘double coincidence of wants’ under a system of barter, can exchange
goods for money, knowing that you can use that money to buy the thing you want
- Measure of value - can quantify each item's value, compare the value of different
goods, and create an agreed ‘ unit of account’. (an agreed way of measuring the
relative worth of different products).
- A store of value- stored to keep spending for later, money hopefully holds its
value dont need to use immediately, inflation would stop money being a store of
value.
- Method of deferred payment- lending if can buy same amount of goods and
services when paid back, money needs to be worth roughly same amount as it is
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller marianakas. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $6.54. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
62491 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now