Exam Success in Economics for Cambridge IGCSE® and O Level
These notes are everything you need to know for Unit 1 IGCSE Economics (0455). To make these notes, I used: Essential Economics for Cambridge IGCSE and O level (third edition) and Exam Success in Economics for IGCSE and O level.
IGCSE Economics (0455) Unit 6 - International trade and globalisation
IGCSE Economics (0455) Unit 4 - Government and the macroeconomy
IGCSE Economics (0455) Unit 3 - Microeconomic decision makers
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Unit 1 - The basic economic problem
The Nature Of The Economic Problem
Finite Resources And Unlimited Wants
The economic problem: people have infinity wants, but there are finite resources to satisfy those wants,
choices have to be made
Economic problems in the context of
● Consumers: unable to buy al the wants at a time, have to make choices
● Workers: able to work longer hours to earn more money o have downtime, involves choice and
the sacrifice
● Producers: only has so many resources at their disposal, therefore if they produce more of one
good, they will have less of another
● Governments: a limited amount of money for essential services, therefore if they spend more
on one service, they will have to spend less on another
Economic And Free Goods
Economic good: a good that is scarce in relation to its demand so a price is charged
Free good: not scarce relative to the demand (no price charged)
The Factors Of Production
Definitions Of The Factors Of Production And Their Rewards
● Land: gifts of nature used in production (rent)
● Labour: human resource enabling physical and intellectual work (wages and salaries)
● Capital: human-made aids of production (interests)
● Enterprise: coordination of the other factors of production involving risk (profit)
Mobility Of The Factors Of Production
Geographical mobility: the ability of factors of production to move from an area to another
Occupational mobility: the ability of factors of production to move from one use to another
Land Relatively, impossible to You can change the use of a Reclaiming land it very
move from one area to given piece of land expensive
another, but you can
reclaim land
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