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    Revision For GCSE Economics Section 1 PDF

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    The economic problem arises due to scarcity of resources. There are limited resources but unlimited wants. The four factors of production are land, labor, capital, and enterprise. Land includes natural resources. Labor is human effort. Capital consists of manufactured goods. Enterprise combines the factors. Opportunity cost is the next best alternative given up when a choice is made, which is never monetary. It applies to consumers, workers, producers, and governments. The production possibility curve shows the different rates of production an economy can achieve with limited resources.

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    Revision For GCSE Economics Section 1 PDF

    Uploaded by

    Kostas 2
    219 views2 pages
    The economic problem arises due to scarcity of resources. There are limited resources but unlimited wants. The four factors of production are land, labor, capital, and enterprise. Land includes natural resources. Labor is human effort. Capital consists of manufactured goods. Enterprise combines the factors. Opportunity cost is the next best alternative given up when a choice is made, which is never monetary. It applies to consumers, workers, producers, and governments. The production possibility curve shows the different rates of production an economy can achieve with limited resources.

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    The economic problem arises due to scarcity of resources. There are limited resources but unlimited wants. The four factors of production are land, labor, capital, and enterprise. Land includes natural resources. Labor is human effort. Capital consists of manufactured goods. Enterprise combines the factors. Opportunity cost is the next best alternative given up when a choice is made, which is never monetary. It applies to consumers, workers, producers, and governments. The production possibility curve shows the different rates of production an economy can achieve with limited resources.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    219 views2 pages

    Revision For GCSE Economics Section 1 PDF

    Uploaded by

    Kostas 2
    The economic problem arises due to scarcity of resources. There are limited resources but unlimited wants. The four factors of production are land, labor, capital, and enterprise. Land includes natural resources. Labor is human effort. Capital consists of manufactured goods. Enterprise combines the factors. Opportunity cost is the next best alternative given up when a choice is made, which is never monetary. It applies to consumers, workers, producers, and governments. The production possibility curve shows the different rates of production an economy can achieve with limited resources.

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    www.fetsystem.com [GCSE ECONOMICS SECTION 1 REVISION NOTES

    Nature of the economic problem


    The fundamental economic problem arises due to scarcity
    Scarcity is when there are insufficient resources to satisfy everyone’s wants and
    needs
    Finite resources and unlimited wants

    Factors of Production
    Land
    Labor
    Capital
    Enterprise

    Land
    Natural occurring resources used for production purpose

    Examples:
    • Earth on which mills are built
    • Water in which fish is found
    • Raw materials used to produce goods

    Labour
    Manual and mental effort to produce or deliver goods and services
    People who are willing or able to work are known as labour work force.

    Examples:
    • Clerks
    • Computer technician
    • level Economics Teacher

    Capital
    Manmade goods to produce other goods and services
    Capital is classified into capital goods and consumer goods

    Examples:
    • Machines
    • Factories
    • Roads
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    www.fetsystem.com [GCSE ECONOMICS SECTION 1 REVISION NOTES

    Enterprise
    The people who bring the other 3 factors of production together to produce
    goods and services are called entrepreneur. In this process they do the decision
    making and risk taking.

    Opportunity cost
    The next best alternative foregone when a choice is made
    Opportunity cost is never in money value
    Opportunity cost is the benefits which could have been received by taking an
    alternative action.

    Circumstances where opportunity cost is present


    Opportunity cost and consumers
    Opportunity cost and workers
    Opportunity cost and producers
    Opportunity cost and government

    Situations
    Ali can buy a ball or a pen. He decides to buy the pen. The opportunity cost of
    buying the pen is ball.
    Rahul can buy a 1 cd or a burger meal. He decides to buy 1 cd. The opportunity
    cost of buying 1 cd is burger meal

    Situations
    The government of china can either spend $2 million on roads or computer
    technology. It decides on spending on roads. The opportunity cost of the building
    the road is computer technology

    Production possibility curve (PPC)


    It is a graph that shows the different rates of production of two goods and/or
    services that an economy can produce efficiently during a specified period of
    time with a limited quantity of productive resources

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