IGCSE Economics Syllabus - Chapter 1: Introduction

Flashcards for IGCSE Economics Syllabus review, covering topics from the basic economic problem to factors of production, opportunity cost and PPC curves.

What is Economics?

A social science that describes the factors that determine the production, distribution, and consumption of goods and services.

What is the nature of the Economic Problem?

The fundamental issue that there are limited resources to satisfy unlimited human wants and needs.

What are Resources?

Inputs required for the production of goods and services.

What is Scarcity?

A lack of something; in economics, it refers to the limited availability of resources.

What are Economic Goods?

Goods that are scarce in supply and can only be produced with an economic cost or consumed with a price.

What are Free Goods?

Goods that are abundant in supply and are unlimited; for example, sunlight and air.

What is a Need?

Something that is necessary for survival, such as food or shelter.

What is a Want?

Something that is a luxury and that people can live without.

What are Factors of Production?

Resources, including land, labor, capital, and enterprise, used to produce goods and services.

What is Land?

All natural resources in an economy, including the surface of the earth, lakes, rivers, and forests.

What is the reward for Land?

Rent.

What is the Land supply?

The supply is fixed.

What is the mobility of Land?

Geographically immobile and occupationally mobile.

What is Labor?

All human resources available in an economy; the mental and physical efforts and skills of workers.

What is the reward for Labor?

Wages and salaries.

What does the quality of Labor depend on?

Skills and education.

What is Capital?

All man-made resources that are available in the economy used to produce other goods.

What is the reward for Capital?

Interest.

What is Enterprise?

The ability to take risks and run a business venture; the firm that takes risks and starts a business.

What is the reward for Enterprise?

Profit generated from the business.

What is Opportunity Cost?

The next best alternative that is sacrificed or foregone in order to obtain something else

What is a Production Possibility Curve (PPC)?

Diagram that shows the maximum combination of two goods that can be produced by an economy with available resources.

What does a PPC point indicate if it is outside the curve?

Situation when the point is outside the PPC curve and is unattainable with the existing resources.

What can cause an outward shift in the PPC?

Discovery of raw materials, new technology, or increase in labor force.

What can cause an inward shift in the PPC?

Natural disasters, low investment in technologies, or running out of resources.