IGCSE REVISION NOTES .
The basic economic problem:
scarcity and exercise of choice .
IGCSE ECONOMICS
Revision notes
,ig c s e e c o n o m i c s - Scarce resources & unlimited wants
This is the reason for the existence of this subject. In reality most resources are scarce.
Similarly individuals and nations have unlimited wants.
The Basics
Scare Resources
There are only a limited number of resources such as workers, machines, factories, raw
materials etc. Yet there are a number of different ways in which they could be used.
IGCSE ECONOMICS
Revision notes
,Similarly people only have a limited amount of money. Yet they have lots of needs and
wants to satisfy.
Also the Government has a limited amount of money £440 billion !!!!. However, it is
unable to satisfy all its wants.
THE BASIC ECONOMIC PROBLEM – the problem arises because resources are scarce,
but human wants are unlimited.
What is the difference between needs and wants?
choice and opportunity cost
Economic choice - is deciding between different uses of scarce resources
Opportunity cost - is the benefit that is lost in making a choice between two competing
uses of scarce resources. It is the next best alternative.
IGCSE ECONOMICS
Revision notes
, Examples of Opportunity Cost
Allocation of Resources
This is about how resources are allocated between competing uses
Examples
Coca Cola decide to spend £50 billion on advertising
The government decides to spend £100 billion on hospitals
An individual allocates their time to study rather than playing football
IGCSE ECONOMICS
Revision notes
The basic economic problem:
scarcity and exercise of choice .
IGCSE ECONOMICS
Revision notes
,ig c s e e c o n o m i c s - Scarce resources & unlimited wants
This is the reason for the existence of this subject. In reality most resources are scarce.
Similarly individuals and nations have unlimited wants.
The Basics
Scare Resources
There are only a limited number of resources such as workers, machines, factories, raw
materials etc. Yet there are a number of different ways in which they could be used.
IGCSE ECONOMICS
Revision notes
,Similarly people only have a limited amount of money. Yet they have lots of needs and
wants to satisfy.
Also the Government has a limited amount of money £440 billion !!!!. However, it is
unable to satisfy all its wants.
THE BASIC ECONOMIC PROBLEM – the problem arises because resources are scarce,
but human wants are unlimited.
What is the difference between needs and wants?
choice and opportunity cost
Economic choice - is deciding between different uses of scarce resources
Opportunity cost - is the benefit that is lost in making a choice between two competing
uses of scarce resources. It is the next best alternative.
IGCSE ECONOMICS
Revision notes
, Examples of Opportunity Cost
Allocation of Resources
This is about how resources are allocated between competing uses
Examples
Coca Cola decide to spend £50 billion on advertising
The government decides to spend £100 billion on hospitals
An individual allocates their time to study rather than playing football
IGCSE ECONOMICS
Revision notes
