IGCSE Pearson Edexcel Economics summary notes + anki flashcards
12 views 0 purchase
Course
IGCSE Economics
Institution
Fifth Year / 11th Grade
Book
Pearson Edexcel International GCSE (9-1) Economics Student Book Ebook
Comprehensive IGCSE Pearson Edexcel Economics Notes with Anki Flashcards
Ace your IGCSE Pearson Edexcel Economics exams with our meticulously crafted set of Economics notes and Anki flashcards! This complete learning package covers the entire syllabus in an easy-to-understand format, ensuring yo...
Edexcel IGCSE O-level Economics, Chap 19: Advantages & Disadvantages of Large & Small Firms (Handwritten notes)
Chapter 17 Economies of scale and Diseconomies of scale
chapter 18 Business Competition
All for this textbook (7)
Written for
Secondary school
IGCSE Economics
3
All documents for this subject (1)
Seller
Follow
evans2
Content preview
ECONOMICS IGCSE REVISION NOTE
Microeconomics
The Market System
1.1.1 The economic problem
a) The problem of scarcity – where there are unlimited wants and finite resources, leading to
the need to make choices.
Humans have unlimited wants and needs. However, resources are finite, meaning the quantity
available is limited. These resources are scarce.
b) Opportunity cost and its effect on economic agents (consumers, producers and government).
All decision-makers are faced with choices known as the opportunity cost. Opportunity cost is the
cost of the next best alternative given up.
Consumers: They have to choose how to spend their limited budgets.
Producers: They have to choose whether to spend their money between advertising, training, buying
a new machine etc.
Government: They have to choose whether to spend money on increasing welfare benefits, better
health care, new schools etc.
c) The use of diagrams to show the production possibility curve.
d) Production possibility curve diagram should be used to show:
A PPC (production possibility curve) shows a different combination of 2 goods that can be produced
if resources are fully used.
At point A, resources are being fully used, but completely allocated to consumer goods, and 0 for
capital goods.
,At point B, resources are being fully used, 14M of consumer goods are produced and 4M of capital
goods are produced.
At point C, resources are being fully used, 8M of consumer goods are produced and 8M of capital
goods are produced.
At point D, resources are being fully used, but completely allocated to capital goods, and 0 for
consumer goods.
At point E, this is impossible as there are not enough resources for this to occur. This is because the
point is outside the PPC.
At point F, resources are not being fully used.
From point B to point C, this is an opportunity cost. Capital goods has gained 3M, but the
opportunity cost was 6M of consumer goods.
e) Possible causes of positive or negative economic growth.
An economy could expect to raise the production of all goods. This is called economic growth and it
shifts the PPC outwards. Economic growth can be caused by these factors. (4) N.I.N.E
- NEW TECHNOLOGY
New technologies can improve in speed and quality, producing more output.
- IMPROVED EFFICIENCY
New production methods can improve efficiency over time, producing more output.
- EDUCATION & TRAINING
This can lead to more educated workers, they can more efficiently carry out tasks that require more
difficulty, and work faster.
- NEW RESOURCES
Some countries find that new resources can enable them to produce more.
,However, a PPC can also shift inwards. This would represent negative economic growth. This may be
caused by resource depletion, which occurs when a country runs out of a natural resource.
1.1.2 Economic assumptions
a) The underlying assumptions that:
• consumers aim to maximise their benefit
• businesses aim to maximise their profit.
b) Reasons why consumers may not maximise their benefit: (3)
• consumers are not always good at calculating their benefits
• consumers have habits that are hard to give up
• consumers sometimes copy others’ behaviour.
c) Reasons why producers may not maximise their profit: (3)
• producers may have managers that revenue maximise or sales maximise
• producers may prioritise caring for customers
• producers may complete charitable work.
1.1.3 Demand, supply and market equilibrium
a) Definition of demand.
Demand is the amount of goods that will be bought at given prices over a period of time.
b) The use of demand curve diagram to show:
• changes in price causing movements along a demand curve
• shifts indicating increased and decreased demand.
, As price decreases, the quantity demanded increases. This is called a movement along.
c) Factors that may cause a shift in the demand curve, including: (6)
• advertising
• income
• fashion and tastes
• price of substitute goods
• price of complementary goods
• demographic changes.
d) Definition of supply.
Supply is the amount of a good that sellers are prepared to offer for sale at any given price over a
period of time.
e) The use of supply curve diagram to show:
• changes in price causing movements along a supply curve
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 evans2. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $8.99. You're not tied to anything after your purchase.
