IGCSE 0455 ECONOMICS
NOTES
(All information is based on the IGCSE Economics 0455 book)
Chapter 1
1.1
Need ⇒ goods or services necessary for survival
Want ⇒ goods or services NOT necessary for survival
Finite resources ⇒ resources that will eventually run out
Renewable resources ⇒ re...
,(All information is based on the IGCSE Economics 0455 book)
Chapter 1
1.1
Need ⇒ goods or services necessary for survival
Want ⇒ goods or services NOT necessary for survival
Finite resources ⇒ resources that will eventually run out
Renewable resources ⇒ resources that can be replaced as they are used to produce
goods or services
The economic problem ⇒ limited resources and unlimited wants which leads to a
problem called scarcity
Scarcity ⇒ an economic problem where the resources are not enough to satisfy
unlimited wants
Economic goods ⇒ goods which are scarce relative to the demand for them
Free goods ⇒ goods which are supplied at zero cost and are enough available relative
to the demand for them
1.2
Factors of production ⇒ land, labor, capital, enterprise
Land - natural resources
Labor - human resources
Capital - manufactured resources
Enterprise - the skill which brings all the other factors together in order for production to
happen
Mobility of factors of production ⇒ how easy or difficult it is for FOP to be transferred
to alternative industries
1.3
Opportunity cost ⇒ the next best alternative foregone when making an economic
decision
1.4
Production Possibility Curve (PPC) ⇒ shows the maximum possible output for two
goods or services with a given amount of resources
Straight - constant opportunity cost
, Curve - not constant opportunity cost
The point INSIDE the curve shows an inefficient usage of resources
The point OUTSIDE the curve is an unobtainable output. It can only be obtained if there
is an increase in the resources used for production (FOP)
2.1
Microeconomics ⇒ the study of the economic behavior of an individual or businesses
(small scale)
E.g. a person, business, etc
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