Igcse Economics Revision Notes

IGCSE Economics Revision Notes/Study notes/Mind maps/Cheat Sheets

Following are the IGCSE Cambridge Revision  notes for  syllabus valid for 2022/2023/2024.The notes are special in that they also guide you into the key points of answering the board exam questions as per the marking scheme. This is a very popular resources when it comes to  Last minute Board Exam Revision, when a day before , you do not have enough time to  read through every single text book page.

MIND-MAPS:

BASIC ECONOMIC PROBLEM MIND MAP

 

      THE BASIC ECONOMIC PROBLEM

1. The economic problem: It is due to scarcity that there exists a basic economic problem of not being able to satisfy the want's of all people.

2. The economic problem can never be solved because the economic problem is scarcity. As we know the wants are infinite but resources are limited. The wants exceed resources as wants grow faster than resources 

NATURE OF THE BASIC ECONOMIC PROBLEM

At any given point of time in an economy, output is limited by the resources and the technology available. There is therefore a basic condition of scarcity. On the other hand, the wants of the consumers are infinite or unlimited and the ability of the resources to satisfy those wants however are limited. There is therefore a need to make a choice as a result of this scarcity. This choice will be in terms of what to produce, how to produce and for whom to produce.

1. Economic good: An economic good has a benefit to the society.It  is a consumable good that is useful to people but  at the same time scarce in relation to its demand. Also economic goods have a price. Human effort is required to obtain economic goods.Economic goods come with an opportunity cost.Examples of economic goods include:Piped gas,, electricity, cars, mobiles etc.

2. Free good: It is a product that does not require any resources to make it and so does not have an opportunity cost.Example of free goods are: air, water, wind etc.

 

FACTORS OF PRODUCTION MIND MAP

Factors-of-production

TOPIC 2  FACTORS OF PRODUCTION AND THEIR REWARDS

The economic resources of land, labour, capital and enterprise are called as the factors of production.

1. Land: It refers to all the natural resources used in the production such as oil, coal etc. In addition, the water, plants, animals etc are also included. Example: Farmland, minerals, sea. Land resources are the raw materials in the production process. These resources can be renewable, such as forests, or nonrenewable such as oil or natural gas.Land gives us rent

2. Labour: Labour stands for the human effort (mental or physical) that is used in producing goods and services. Example: A teacher, workers.Infact all people with their efforts , abilities and skills are termed as labour.labour gives us wages

3. Capital: Capital refers to all the human made (man-made) goods used in production. Example: Machinery and equipment, factories, conveyor belts, computers, delivery vans etc.Capital gives us interest.

4. Enterprise: It refers to the risk bearing and the key decision-making function in a business. This is needed as some events cannot be anticipated beforehand and might not qualify for being insured. Example: An entrepreneur.Enterprise gives us profit

 

Some board[ 4 m ]questions Define enterprise

Enterprise is a factor that takes the risk in bringing the other factors together or combining the other factors in order  to produce goods and services to make profits . Enterprise involves the taking of decisions in terms of what to produce and how to produce. Enterprise is taken by entrepreneurs example shareholders who receive profit as reward

Using examples, define the factor of production capital

Capital can be defined as any human-made good that is used to produce other goods and services; that is they are aids to production. Examples of capital are factories, machinery, tools, equipments etc.

MOBILITY OF FACTORS OF PRODUCTION MIND MAP

Mobility-of-factors-of-production

MOBILITY OF FACTORS OF PRODUCTION IS AFFECTED BY THE FOLLOWING FACTORS:

1.Difference in the price and the availability of housing in different areas and countries

2. Family ties

3. Difference in the educational system in different ares and countries

4. Restrictions on the movement of workers

5.Lack of information

 

Following mind maps are taken as random questions from IGCSE Past Papers

FUNCTIONS OF MONEY MIND MAP
Functions of money

Functions of money are as follows:

1. Acts as a medium of exchange

2. It is a standard of deferred payments

3. It is a nit of account

4. It is a store of value

FACTORS AFFECTING DEMAND OF A PRODUCT MIND MAP

Factors affecting demand of a product

The following factors affect the demand of a product:

1. The price of the product

2. Changes in income

3. Price of substitute goods/services

4. Price of complementary goods/services

5.Changes in income

6.Changes in tastes and preferences of customers

FACTORS AFFECTING BORROWING

Factors affecting borrowing

Factors affecting borrowing:

1.Availability of loans and overdrafts

2. Rate of interest

3. Confidence

4. Social attitudes

CHARACTERISTICS OF DEVELOPING ECONOMIES

Characteristics-of-developing-economiesCharacteristics of developing economies:

1. Low level of health care

2. Low level of education

3. Low level of savings

4. High rate of population growth

5. Low income per head

6. Low life expectancy

7.High infant mortality rate

8.Low level of capital investment

9.Poor infrastructure

10.Poor housing and sanitation

11.High proportion of workers in the primary sector

FUNCTIONS OF COMMERCIAL BANK

Functions-of-a-commercial-bank

Functions of commercial bank:

1.Acceptance of accounts in savings and current accounts

2.Enable customers to make payments

3.Can lend money

4.Provide traveler cheque/Foreign currency

5.Accept deposits of valuables

6.Advice on financial matters

7.Buy/Sell shares for customers

MICROECONOMICS AND MACROECONOMICS

MICROECONOMICS:

1.It is the study of  the behaviour and the decision of households and firms and the performance of individual markets.

2.Studies variables such as the amount of a firm’s output or of a consumer’s income etc.

MARKET: It is an arrangement which brings buyers into contact with sellers

MACROECONOMICS:

1.It is the study of the whole economy.

2.It studies the aggregate economic behaviour. That is the behaviour of aggregate economic agents on aggregate economic markets.

3.It deals with the economic issues  that affect the entire economy and most of the society.

4.It studies aggregate variables such as gross domestic product, national income, aggregate demand, general price level, rate of unemployment

DIFFERENCE BETWEEN MACROECONOMICS AND MICROECONOMICS:

Difference-between-microeconomics-and-macroeconomics

Aims-of-decision-makers

Note: All details mentioned in the mind  maps are a part of mark schemes. Students are requested to carefully study them. These mind maps are a great help from exam point of view and also to develop mastery of concepts other wise

For more notes , stay tuned

 

Team,

Smart Exam resources