OCR GCSE Intro to Economics
Households/consumers: make up the population and workforce + consume goods/services
Businesses/firms: produce goods/services (using factors of production) to make profits
Government: gives public goods/services (with taxes) and creates policies to help society
International sector: the rest of the world that interacts with the domestic economy
Land: natural resources (fields, mines, etc.)
Labor: workforce, employed laborers
Capital: goods that help with production (machines, offices, tech)
Enterprise: entrepreneurship, combines the other factors to make a good/service
They combine together to form a good/service that will be used to generate profit
Enterprise involves making economic decisions (rent, wages, advertising, etc.) to sell the product and generate profit
Income adds on to the GDP (Gross Domestic Product)
Impacts aspects of economy:
supply, demand, interest rate, debt, employment, etc.
We have finite resources which are:
the main factors of production– land, labor, capital, and enterprise
We as humans constantly have needs and demands that outnumber how much can actually be supplied to us.
This is the big idea of economics!
We must consider the three main questions of economics:
What to produce?
How to produce?
For whom to produce?
to be efficient, the most important things are considered first, i.e. our needs.
After fulfilling needs, we can consider wants.
We may have to make trade-offs or face opportunity costs while making these decisions.
Every decision we make causes a sacrifice– choosing one option means that the opportunity cost is whatever the value of the next best alternative was.
Every choice involves sacrificing another option!
E.g. If you choose to spend money on a new shirt, the opportunity cost is that you won’t have enough money for dinner that night.
Economic decisions are made in all levels of society
Consumers: spend to maximize our satisfaction and/or usefulness
Businesses: spend to maximize profits and minimize costs
Governments: spend to satisfy needs and wants of citizens + allocate resources
In order to make decisions, we consider:
needs/wants, opportunity costs/trade-offs, resources/income, effects, and priorities
Needs/Wants:
Do we really need this item/service?
Is it just a want that doesn’t need to be prioritized?
Will buying this jeopardize my needs?
Opportunity costs/Trade-offs:
Which choice is better?
What is the cost of this decision?
Resources/income:
How much money can you spend?
Is this using up valuable resources?
Effects:
Does this impact the environment?
Does this hurt or help people?
Does this have a positive or negative impact?
Does this affect the economy?
Priorities:
Is this a need or a want?
Is this an urgent purchase?
Have you thought about the purchase?
Households/consumers: make up the population and workforce + consume goods/services
Businesses/firms: produce goods/services (using factors of production) to make profits
Government: gives public goods/services (with taxes) and creates policies to help society
International sector: the rest of the world that interacts with the domestic economy
Land: natural resources (fields, mines, etc.)
Labor: workforce, employed laborers
Capital: goods that help with production (machines, offices, tech)
Enterprise: entrepreneurship, combines the other factors to make a good/service
They combine together to form a good/service that will be used to generate profit
Enterprise involves making economic decisions (rent, wages, advertising, etc.) to sell the product and generate profit
Income adds on to the GDP (Gross Domestic Product)
Impacts aspects of economy:
supply, demand, interest rate, debt, employment, etc.
We have finite resources which are:
the main factors of production– land, labor, capital, and enterprise
We as humans constantly have needs and demands that outnumber how much can actually be supplied to us.
This is the big idea of economics!
We must consider the three main questions of economics:
What to produce?
How to produce?
For whom to produce?
to be efficient, the most important things are considered first, i.e. our needs.
After fulfilling needs, we can consider wants.
We may have to make trade-offs or face opportunity costs while making these decisions.
Every decision we make causes a sacrifice– choosing one option means that the opportunity cost is whatever the value of the next best alternative was.
Every choice involves sacrificing another option!
E.g. If you choose to spend money on a new shirt, the opportunity cost is that you won’t have enough money for dinner that night.
Economic decisions are made in all levels of society
Consumers: spend to maximize our satisfaction and/or usefulness
Businesses: spend to maximize profits and minimize costs
Governments: spend to satisfy needs and wants of citizens + allocate resources
In order to make decisions, we consider:
needs/wants, opportunity costs/trade-offs, resources/income, effects, and priorities
Needs/Wants:
Do we really need this item/service?
Is it just a want that doesn’t need to be prioritized?
Will buying this jeopardize my needs?
Opportunity costs/Trade-offs:
Which choice is better?
What is the cost of this decision?
Resources/income:
How much money can you spend?
Is this using up valuable resources?
Effects:
Does this impact the environment?
Does this hurt or help people?
Does this have a positive or negative impact?
Does this affect the economy?
Priorities:
Is this a need or a want?
Is this an urgent purchase?
Have you thought about the purchase?