From the CIE 2018 iGCSE Economics syllabus (part 1 of 8 part)
1 Basic economic problem: choice and the allocation of resources • economic
problem • factors of production • opportunity cost • resource allocation • choice
• production possibility curves
Task – you are going to draw and briefly explain these points:
A.
B.
C.
D.
E.
F.
economic problem
factors of production
opportunity cost
resource allocation
choice (some wants must be given up so that other wants can be achieved)
production possibility curves
Grading out of 10; drawing (4), explanation (4), neatness and grammar (2).
A
Draw and explain the economic problem
Bank
Gas station
Scarcity is the basic economic problem, it is the gap between limited (scarce, few,
not much) resources and theoretically limitless wants (I want a car, a boat, a
house, a gold phone… I want… I want… I want!).
Therefore, because people want so much decisions about how to allocate
resources efficiently; to satisfy basic needs and as many additional wants at
possible choices must be made by producers making (supplying) things and
consumers demanding (needing and wanting) things.
In summary scarcity is a compromise, to get one resource (fuel or gas) you must
usually give up another resource (money).
B
Draw and explain the factors of production
I have idea for a
better business
Labour
Enterprise
Capital
Land
The factors of production is a standard economic term that describes the inputs
(things going in to a work process) that are used in the production
(making/producing/manufacturing) of goods or services in order to make a profit
include land (natural resources), labour (workers time), capital (money invested in
things to help get the business going) and enterprise (the idea for a business or
entrepreneurship).
C
Draw the opportunity cost using buying a basketball and football as an
example
The opportunity cost is the cost of choosing between alternative uses or
resources. It is the lost benefit you could have received which is the Next Best
Alternative. For example you have $1 and can buy a $1 football or $1 basketball,
if you chose the football then the basketball is the NBA.
NBA
The Next Best Alternative of a
$1 football is the $1 basketball
not bought or foregone.
D
Draw the resource allocation using manufacturing cups and mugs as an
example
This is a different type of opportunity cost. It is a ‘trade off’. For example you
make cups and mugs (costing $1 each to make) and with resource allocation you
can allocate a resource of $9 to produce (make) 4 cups and 5 mugs or say 3 cups
and 6 mugs. Every time you decide how allocate your scare resource of $9 you
must decide to make more or less of another.
E
Draw the choice
Choice always involves a cost of something. The cost can be money or time.
Every choice requires that some wants must be given up so that other wants can
be achieved.
I need to choose
what to do now
Read Economics books
Write Economics essays
Draw Economics posters
Sing about Economics
Watch Economics
videos
Dance about Economics
Present Economics
All these choices are good but I need to
use my time wisely and choose one of
two of them and trade-off against the
other options/choices.
F
Draw the production possibility curves (PPC)
Basketballs
Balls PPC
Balls can produce a maximum of
70 basketballs a week and
50 footballs a week
70
60
50
60
Footballs
Draw on the graph if Balls decides to produce 60 footballs in one week. What is
the opportunity cost of this decision? And briefly explain what a PPC shows.
60 footballs means probably making 60 basketballs so the opportunity cost of 60
footballs is 10 basketballs foregone.
The PPC shows the opportunity cost and choice of different production decision
and the trade-off caused by choosing a particular course of action (production
decision).
Extra Draw these goods and services that satisfy the needs and wants of
consumers
A non-durable consumer good
Drawings of Food, drink, soap
A durable consumer good
Consumer services
Drawings of Car, washing machine
Drawings of Cafes and holidays
Capital goods
Drawings of Factories, shops, offices
Semi-finished goods
Business services
Drawings of Paper for books, circuits for
computers, screens for phones
Drawings of Banking, transportation,
advertising
From the CIE 2018 iGCSE Economics syllabus (part 1 of 8 part)
Task – you are going to draw and briefly explain these points in order.
A.
B.
C.
D.
E.
F.
economic problem
factors of production
opportunity cost
resource allocation
choice (some wants must be given up so that other wants can be achieved)
production possibility curves
Grading out of 10; drawing (4), explanation (4), neatness and grammar (2).
A
Draw and explain the economic problem
B
Draw and explain the factors of production
C
Draw the opportunity cost using buying a basketball and football as an
example
D
Draw the resource allocation using manufacturing cups and mugs as an
example
.
E
Draw and explain the ‘choice’
F
Draw the production possibility curves (PPC)
Basketballs
Balls PPC
Balls can produce a maximum of
70 basketballs a week and
70
50 footballs a week
50
Footballs
Draw on the graph if Balls decides to produce 60 footballs in one week. What is
the opportunity cost of this decision? And briefly explain what a PPC chows.
Extra Draw these goods and services that satisfy the needs and wants of
consumers
A non-durable consumer good
A durable consumer good
Consumer services
Capital goods
Semi-finished goods
Business services