IGCSE Economics Questions and
Answers Latest Updated Rated A+
Advantages of a monopoly - ANSWER-economies of scale, can be efficient and lower
prices, better able to afford R&D
Average costs - ANSWER-total costs/ output
Average product - ANSWER-=total product/units of labour
Average product of labour - ANSWER-Total output / Total number of employees.
Average revenue - ANSWER-total revenue / output.
Break Even point of production - ANSWER-The point of production when total costs are
equal to total revenue
Capital goods - ANSWER-Man made resources produced by labour which can help in
the production of other goods and services.
Ceteris Parabis - ANSWER-Means all other things being equal and is used to examine
determinants in isolation
Characteristics of a perfect competitive market - ANSWER-Homogeneous product
(same goods), price takers (cannot influence price b/c competition), perfect information,
freedom of entry and exit.
Complements - ANSWER-goods that come together, are jointly demanded.
Constant returns to Scale - ANSWER-a company both doubles its inputs and outputs.
Consumer Goods - ANSWER-products bought by consumers to satisfy their wants
Contraction of demand - ANSWER-refers to the quantity demanded for a product to fall
as price rises.
Cooperatives - ANSWER-owned by workers, share profits and liability equally
Corporation - ANSWER-owned by shareholder, limited liability
Cross elasticity of demand - ANSWER-change in the price of one good affects the
demand of another good.
, Demand - ANSWER-is the willingness and ability of consumers to buy goods and
services.
Depreciation - ANSWER-capital equipment used in a firm wears out and needs to be
replaced.
Determinants of Supply - ANSWER-Weather, technical progress, changes in costs of
factors of production, changes in prices of other commodities
Diminishing returns to Scale - ANSWER-a company doubles its inputs and less than
doubles its outputs
Disadvantages of a monopoly - ANSWER-increased prices, no choice in product, no
incentive to innovate
Diseconomies of scale - ANSWER-occur when the average cost of producing a
good/service increases from a firm being inefficient.
Disequilibrium - ANSWER-(Quantity demanded does not equal Quantity supplied) at a
given price level
Division of Labour - ANSWER-when a workforce is separated for each to do a specific
task in producing a good or service.
Earned income - ANSWER-money earned while working (wage/salary).
Economic system - ANSWER-Used to answer a countries three economics questions,
what, how, and for whom
Economies of scale - ANSWER-the average cost of producing a good/service
decreases as output increases
Economy - ANSWER-Where people produce goods and services.
Entrepreneur - ANSWER-person who combines the factors of production and takes the
risk in the company
Equation for Price elasticity of Demand - ANSWER-Change in quantity demanded/ %
Change in price.
Equilibrium price - ANSWER-The equilibrium price is the market price where the
quantity demanded of a good is satisfied with the quantity supplied
Excess demand - ANSWER-refers to the quantity demanded being higher than the
quantity supplied
Answers Latest Updated Rated A+
Advantages of a monopoly - ANSWER-economies of scale, can be efficient and lower
prices, better able to afford R&D
Average costs - ANSWER-total costs/ output
Average product - ANSWER-=total product/units of labour
Average product of labour - ANSWER-Total output / Total number of employees.
Average revenue - ANSWER-total revenue / output.
Break Even point of production - ANSWER-The point of production when total costs are
equal to total revenue
Capital goods - ANSWER-Man made resources produced by labour which can help in
the production of other goods and services.
Ceteris Parabis - ANSWER-Means all other things being equal and is used to examine
determinants in isolation
Characteristics of a perfect competitive market - ANSWER-Homogeneous product
(same goods), price takers (cannot influence price b/c competition), perfect information,
freedom of entry and exit.
Complements - ANSWER-goods that come together, are jointly demanded.
Constant returns to Scale - ANSWER-a company both doubles its inputs and outputs.
Consumer Goods - ANSWER-products bought by consumers to satisfy their wants
Contraction of demand - ANSWER-refers to the quantity demanded for a product to fall
as price rises.
Cooperatives - ANSWER-owned by workers, share profits and liability equally
Corporation - ANSWER-owned by shareholder, limited liability
Cross elasticity of demand - ANSWER-change in the price of one good affects the
demand of another good.
, Demand - ANSWER-is the willingness and ability of consumers to buy goods and
services.
Depreciation - ANSWER-capital equipment used in a firm wears out and needs to be
replaced.
Determinants of Supply - ANSWER-Weather, technical progress, changes in costs of
factors of production, changes in prices of other commodities
Diminishing returns to Scale - ANSWER-a company doubles its inputs and less than
doubles its outputs
Disadvantages of a monopoly - ANSWER-increased prices, no choice in product, no
incentive to innovate
Diseconomies of scale - ANSWER-occur when the average cost of producing a
good/service increases from a firm being inefficient.
Disequilibrium - ANSWER-(Quantity demanded does not equal Quantity supplied) at a
given price level
Division of Labour - ANSWER-when a workforce is separated for each to do a specific
task in producing a good or service.
Earned income - ANSWER-money earned while working (wage/salary).
Economic system - ANSWER-Used to answer a countries three economics questions,
what, how, and for whom
Economies of scale - ANSWER-the average cost of producing a good/service
decreases as output increases
Economy - ANSWER-Where people produce goods and services.
Entrepreneur - ANSWER-person who combines the factors of production and takes the
risk in the company
Equation for Price elasticity of Demand - ANSWER-Change in quantity demanded/ %
Change in price.
Equilibrium price - ANSWER-The equilibrium price is the market price where the
quantity demanded of a good is satisfied with the quantity supplied
Excess demand - ANSWER-refers to the quantity demanded being higher than the
quantity supplied
