Summary
Summary Basic Economic Idea and Resource Allocation
- Institution
- CIE
A summary of Unit 1 of the CIE AS Level syllabus.
[Show more]
Seller
Follow
Content preview
Topic 1 : Basic economic ideasand resource allocation
What is the fundamental economic problem?
a situation where there are not enough resources to satisfy all human needs
and wants
What is scarcity and how does it link to choices?
a situation which wants and needs are in excess of the resources available
due to scarcity and unlimited wants, we need to make choices
What is opportunity cost?
the cost expressed in terms of the next best alternative forgone
What are the importance of opportunity costs?
opportunity costs means we have to make decisions about best use of time,
resources
sometimes 2 options are good, but we need to choose the relative best
option
Topic 1 : Basic economic ideas and resource allocation 1
, What are the 3 basic economic problem?
what will be produced
how it will be produced
for whom it will be produced
What is meant by ceteris paribus?
it means all other things being equal
What is meant by margin?
the point which the last unit of a product is produced or consumed
What is short run?
where 1 FOP is fixed, eg: capital
time period: less than 6 months
What is long run?
where all main FOP are variable
time period: greater than 6 months
eg: can build a bigger factory, firms can enter or leave the market
What is very long run and examples?
where technology and factors are beyond the control of the firm can change
significantly
eg: government policies may change, new technology
What is a positive statement and example?
a statement which is factual and objective
eg: In 2015, the inflation rate in the UK was 0.5%
What is a normative statement?
a statement which is subjective and expresses a value judgement
eg: It is unfair that student have to pay for tuition fees
What are the 4 factors of production?
land: raw materials, eg: coal, fish, wood
labour: workers able to participate in productive process
Topic 1 : Basic economic ideas and resource allocation 2
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 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 nelsonkhoo. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for £6.96. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
53340 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy revision notes and other study material for 14 years now