IGCSE Economics Syllabus Lecture Series

Overview

• New video series for IGCSE Economics 0455 syllabus (2023 onwards)
• 6 videos covering all chapters
• First video focuses on Chapter 1: The Basic Economic Problem
• Topics covered:
  • What is Economics?
  • The Economic Problem
  • Economic Goods and Free Goods
  • Factors of Production
  • Opportunity Cost
  • Production Possibility Curve (PPC)

What is Economics?

• Economics: Social science that describes production, distribution, and consumption of goods and services.
• Economics addresses the problem of limited resources vs. unlimited human wants.

The Economic Problem

• Definition: Scarcity of resources to satisfy unlimited human wants.
• Humans have unlimited wants, but resources are finite.
• Economic problem leads to concepts like price, supply, and demand in economics.

Economic Goods and Free Goods

• Economic Goods: Scarce in supply, involve opportunity cost.
  • Example: Diamond watches, Ferraris.
• Free Goods: Abundant and unlimited, e.g., air, sunlight.
• Needs vs. Wants:
  • Needs: Essential for survival (e.g., food, shelter).
  • Wants: Luxuries not essential for survival (e.g., luxury cars).

Factors of Production

• Definition: Resources used to produce goods and services.
• Four factors:
  1. Land: Natural resources; reward is rent.
     • Geographically immobile, occupationally mobile
  2. Labor: Human resources; reward is wages/salaries.
     • Occupationally and geographically mobile
  3. Capital: Man-made resources; reward is interest.
     • Geographic immobility depends on nature, occupationally mobile
  4. Enterprise: Ability to take risks; reward is profit.
     • Highly mobile both geographically and occupationally
• Each factor is scarce and contributes to the economic problem.

Opportunity Cost

• Definition: The next best alternative foregone when a choice is made.
• Arises because of resource scarcity.

Production Possibility Curve (PPC)

• Definition: Diagram showing maximum combinations of two goods produced with available resources.
• Points on PPC:
  • Outside Curve: Unattainable
  • Inside Curve: Inefficient
  • On Curve: Efficient use
• Shifts in PPC:
  • Outward Shift: Due to new technology, increased labor force, more resources.
  • Inward Shift: Due to natural disasters, resource depletion.
• PPC links with opportunity cost to help decision-making.

Conclusion

• This lecture laid the groundwork for understanding the basic economic problem and fundamental concepts in economics.
• More complex topics and applications will be covered in subsequent videos.