IGCSE ECONOMICS (EDEXCEL)
DEFINITIONS EXAM QUESTIONS WITH
COMPLETE SOLUTIONS 2025/2026
, Economics - ANSWERSThe study of how society manages its scare resources to
satisfy unlimited wants
Economy - ANSWERSA system that attempt to solve the basic economic problem.
Micro-economics - ANSWERSThe study of how households (buyers) and firms (sellers)
make decisions regarding the allocation of limited resources and how they interact in
specific markets as individuals
Macro-economics - ANSWERSThe branch of economics that examines the behaviour
of the whole economy
Scarcity - ANSWERSSociety has limited resources and therefore cannot produce
enough goods and services to satisfy everyone's wants.
Opportunity Cost - ANSWERSThe next best alternative forgone when an economic
decision is made
Wants - ANSWERSAnything you would like irrespective of whether you have the
resources to purchase it.
Needs - ANSWERSBasic requirements for human survival
Choice - ANSWERSThe selection of appropriate alternatives.
Ceteris Paribus - ANSWERS'other things being equal' It is used as a reminder that all
variables other than the one(s) being studied are assumed to be constant
Production Possibility Curve - ANSWERSThis shows maximum quantities of different
combinations of two products an economy can produce given current resources and the
state of technology.
Exporters - ANSWERSFirms that sell overseas.
Market - ANSWERSA place or situation where buyers and sellers communicate with
exchange in mind.
Market Failure - ANSWERSMarket failure occurs when freely functioning markets fail to
deliver an efficient allocation of resources. The result is a loss of economic and social
welfare.
Price - ANSWERSThe amount of money that goods are exchanged for a transaction.
DEFINITIONS EXAM QUESTIONS WITH
COMPLETE SOLUTIONS 2025/2026
, Economics - ANSWERSThe study of how society manages its scare resources to
satisfy unlimited wants
Economy - ANSWERSA system that attempt to solve the basic economic problem.
Micro-economics - ANSWERSThe study of how households (buyers) and firms (sellers)
make decisions regarding the allocation of limited resources and how they interact in
specific markets as individuals
Macro-economics - ANSWERSThe branch of economics that examines the behaviour
of the whole economy
Scarcity - ANSWERSSociety has limited resources and therefore cannot produce
enough goods and services to satisfy everyone's wants.
Opportunity Cost - ANSWERSThe next best alternative forgone when an economic
decision is made
Wants - ANSWERSAnything you would like irrespective of whether you have the
resources to purchase it.
Needs - ANSWERSBasic requirements for human survival
Choice - ANSWERSThe selection of appropriate alternatives.
Ceteris Paribus - ANSWERS'other things being equal' It is used as a reminder that all
variables other than the one(s) being studied are assumed to be constant
Production Possibility Curve - ANSWERSThis shows maximum quantities of different
combinations of two products an economy can produce given current resources and the
state of technology.
Exporters - ANSWERSFirms that sell overseas.
Market - ANSWERSA place or situation where buyers and sellers communicate with
exchange in mind.
Market Failure - ANSWERSMarket failure occurs when freely functioning markets fail to
deliver an efficient allocation of resources. The result is a loss of economic and social
welfare.
Price - ANSWERSThe amount of money that goods are exchanged for a transaction.
