IGCSE Economics Unit 1 Class Notes Provided by A Star Student
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Module
IGCSE Economics
Institution
IGCSE Economics full class notes of Unit 1. Chapters include Basic Economic Problem, Factors of Production, Opportunity Cost and PPC. Provided by A Star Student and double checked by IB Students.
Unit 1 – The Basic Economic Problem
Chapter 1 - The nature of the economic
problem
People can’t get all their wants fulfilled due to a lack of
resources. Resources are factors used to produce goods
and services.
The economic problem – unlimited wants exceeding finite
resources. This problem arises due to a situation where
there is not enough to satisfy everyone wants. This
situation is known as scarcity.
Wants = In economics a want is something that is desired.
A person has unlimited wants but due to limited resources
all these wants are not fulfilled. For example, designer
clothes.
Needs = In economics needs are seen as a necessity for
example food.
Scarcity continues to exist. With growing populations,
wants grow at a faster rate than the growth of economic
resources.
Economic Goods = A product which requires resources to
produce it and therefore has an opportunity cost (the best
alternative forgone) of production.
, Free Goods = A product which does not require any
resources to make and therefore doesn’t have an
opportunity cost of production.
Chapter 2 – Factors of Production
Factors of Production – Land, labour, capital and
enterprise.
• Land – Gifts of nature available for production.
• Labour – Human effort used in producing goods and
services.
• Capital – Human made goods used in production
• Enterprise – Risk bearing and key decision making in
business.
Important Note – Roads aren’t an example of land. Only
natural things such as animals or grasslands or even
oceans are examples of land.
Capital Goods = Goods not wanted for their own sake but
for what they can produce.
Consumer Goods = Goods and services purchased by
households for their own satisfaction.
o Occupation Mobility = How capable a
factor of production is in changing use. o
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