IGCSE/O-Level Economics Revision Flashcards

A comprehensive set of vocabulary flashcards based on O-Level/IGCSE Economics revision notes covering basic economic problems, market systems, firm structures, and macroeconomic indicators.

Scarcity

The basic economic problem arising from scarce resources and unlimited human wants.

Economic Choice

Deciding between different uses of scarce resources.

Opportunity Cost

The benefit that is lost in making a choice between two competing uses of scarce resources; it is the next best alternative.

Factors of Production

The resources used to produce goods and services: Land, Labour, Capital, and Enterprise.

Human Capital

The specific level of skills, qualities, and qualifications held by an individual worker.

Investment

Increases in the level of capital, which are man-made physical goods used to produce other goods and services.

Total Output

The value of total production in an economy.

Primary Industry

Industry that extracts raw materials from the earth, such as coal mining, agriculture, or oil extraction.

Secondary Industry

Industry that processes primary products into manufactured goods, such as car production.

Tertiary Industry

Businesses that provide a service to individuals or other businesses, such as banking or hairdressing.

De-industrialisation

The change in the balance of the economy between the output of different types of industry, often involving the decline of primary industry and growth of the service sector.

Division of Labour

A system whereby workers concentrate on performing a few tasks and then exchange their production for other goods and services.

Disposable Income

The money individuals have to spend after tax and essential payments.

Free Market System

An economic system where decisions on what, how, and for whom to produce are made by private individuals and firms, and resources are allocated via supply and demand.

Command or Planned System

An economic system where the Government makes decisions about production and resources are allocated through a system of planning.

Mixed Economy

An economy where some resources are allocated via the forces of supply and demand (private sector) and others by the state planning system (Government).

Unlimited Liability

A legal obligation on the owners of the business to pay all debts of the business, even if personal possessions must be claimed.

Limited Liability

A situation where shareholders are only responsible for the company’s debts up to the value of their shareholding.

Public Limited Company (plc)

A company owned by shareholders that must have $£50,000$ of capital when founded and may allow shares to be bought by the general public.

Central Bank

The institution that looks after government tax revenues, oversees the banking system, and sets the base interest rate; in the UK, this is the Bank of England.

Effective Demand

Demand backed by the actual money to make the purchase.

Equilibrium Price

The price where supply and demand are equal, and both sellers and buyers are satisfied with the quantity.

Subsidy

A payment of money by the Government to a producer to encourage the production of a certain good or service by reducing costs.

Price Elasticity of Demand

A measure of the relationship between changes in the price of a product and the resulting change in demand for that product.

Inelastic Demand

A situation where the percentage change in quantity demanded is less than the percentage change in price, indicating demand is not very responsive to price changes.

Cross Elasticity of Demand

A measure of how the change in the price of one good affects the level of demand for another good.

SMART Objectives

Effective business targets that are Specific, Measurable, Achievable, Realistic, and Timed.

Monopoly

A situation where the market is dominated by one seller; by law, this occurs if a firm has a market share of $25.00\%$.

Economies of Scale

The benefits gained from producing on a large scale, which usually lowers the average cost of making a good.

Diseconomies of Scale

The problems faced by businesses if they become too large, leading to rising average total costs due to issues like control, coordination, or cooperation.

GDP (Gross Domestic Product)

The value of total production, total incomes, or total spending in an economy, usually expressed as a yearly percentage change.

Structural Unemployment

Unemployment caused by a reduction in demand for specific industries or a mismatch between worker skills and the needs of businesses.

Cyclical Unemployment

Unemployment resulting from a lack of demand in the economy, typically tied to the recession phase of the trade cycle.

Cost Push Inflation

Inflation caused by an increase in production costs, such as raw materials or wages, leading businesses to raise prices.

Demand Pull Inflation

Inflation caused by excess demand in the economy where there are limited goods and services available.

Poverty Cycle

A situation where low income per head leads to low savings and low investment, resulting in continued low income.

Absolute Advantage

A situation where a country can produce something using fewer resources than another country.

Comparative Advantage

The ability of a country to produce a good at a lower opportunity cost than another country.

Tariff

A tax placed on imported goods to make them more expensive and encourage the consumption of domestic products.

Quota

A physical limit on the number of items of a particular good that can be brought into a country.