IGCSE Economics - i-study

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IGCSE Economics

Study guide

Hywel Davies and Michael Wolstenholme .

Updated for the 2017-19 syllabus

LICENSED PRODUCT - SCHOOL USE ONLY

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First edition published March 2014

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Contents

Unit 1 - The Basic Economic Problem

5

The Factors of Production

Opportunity Cost

The Production Possibility Curve (PPC)

Chapter Review

7

11

12

13

Unit 2 - The Allocation of Resources

Merit, Demerit and Public Goods

Economic Systems

Market Forces: Demand, Supply and Equilibrium

Shifts of the Demand Curve

The Supply Curve

Shifts of the Supply Curve

Equilibrium

Elasticities

Calculating PED

Elasticities (continued)

Types of Goods

The Law of Diminishing Marginal Utility

Merits of the Market System

Market Failure

Private Costs and Benefits

Social Costs and Benefits

Conserving Resources versus Using Resources

Public Expenditure versus Private Expenditure

Chapter Review

Unit 3 - The Individual

Barter and the need for exchange

Money

Banking

Stock Exchanges

Choosing an Occupation

Changes in earnings over time for Individuals

Supply and Demand in relation to changes in earnings

Differences in earnings between occupational groups

Private/Public

Trade Unions

Specialisation for Individuals

Motives for spending, saving and borrowing

Saving

Chapter Review

3

14

14

16

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21

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30

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Unit 4 - The Private Firm

Business Organisations

Demand for the factors of production

Industrial Classifications

Profit, Revenue and Costs

The Costs of Business

The Costs of Business (continued)

Demand, Supply and Costs

Costs and Profits

Characteristics of Market structures

How perfect competition functions

Monopolies

Monopolies continued

The Growth of Firms

Economies of Scale

Diseconomies of scale

57

58

61

61

62

63

64

65

66

68

69

70

71

73

75

76

Unit 5 - The Role of Government

78

Aims of a Government

The Circular Flow of Income

Aggregate Demand and Supply

The Macroeconomic Diagram

Shifting Macroeconomic Curves

Demand and Supply-Side Policies

Fiscal Policy

Monetary Policy

Market-Oriented Supply-Side Policy

Interventionist Supply-Side Policy

The Multiplier Effect

Aims of Taxation

What makes a good tax?

What are the consequences of taxation?

Subsidies

The Macroeconomy

Chapter Review

79

80

82

83

84

88

89

90

92

93

95

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99

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100

101

104

Unit 6 - Economic Indicators

Unemployment

Consequences of unemployment

Multiple Choice Questions

Inflation

Measuring Inflation

Causes of inflation

Consequences of inflation

105

105

106

107

108

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112

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Hyperinflation

Multiple Choice Questions

Measuring Output

Conservation vs Consumption

Chapter Review

Unit 7 - Development Economics

Measuring Development: The HDI

Identifying a Developing country

Alleviating Poverty

Population

Population Pyramids: Interpreting the Data

Developed Countries¡¯ Population Pyramids

Changing Times: The Effects of Population Growth

Why develop?

Drawbacks to Development

Why do some countries remain less developed?

Chapter Review

Unit 8 - International Trade

The Balance of Payments

Problems with the Balance of Payments

The Theory of Absolute Advantage Explained

Comparative Advantage

Comparative Advantage continued

Free Trade vs Protectionism

Questions for Review

Exchange Rates

What causes exchange rates to change?

Effects of a depreciation

Effects of an appreciation

Different Exchange Rates

Chapter Review

Worksheets

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