O Level OSIE Economics Notes

Economics2286OLevel Notes v2.0Contents:1. QuestionTypes+AnsweringMethod2. Topic1KeyPoints3. Topic2KeyPoints4. Topic3KeyPoints5. Topic4KeyPoints 6. Topic5KeyPoints7. Topic6KeyPoints8. DefinitionsList9. Notes+SampleQuestions10. Acknowledgements 1QuestionTypes+AnsweringMethod - Calculate(Q1):usedatafromthesourcetocalculaterequiredvalue- Identify:namerequiredterms,usingsourcedataforQ1- State:expressinclearterms- Define:givespecificmeaningtoagiventerm(s)- Explain:givepurposes/reasons,describewhyand/orhow,supportwithrelevantevidence(esp.Q1)- Analyse:- Q1(Analysetherelationshipbetween…):staterelationship,provide2supportingexamples(fromsource),provideexceptionswithexamples(fromsource),commentonrelationship- (c):givedetailstoshowmeaning- Discuss:writeaboutagivenissue/topicinastructuredandbalancedway(2A,2CA,evaluation) ● SectionA(Q1):○ Calculate[1]○ Identifyreasons(fromsource)○ Explain(usingsourcematerial)○ Analysetherelationship…[5]○ Analyse[4]→2points○ Discuss(x2)[6]each→3points● SectionB(3outof4):○ Identify/State/Define[2]○ Explain[4]→2points○ Analyse[6]→3pointsor definitionof giventopic+2to3points○ Discuss[8]→4points(2A,2CA) 1

2Topic1KeyPoints - basiceconomicproblem:scarcity(i.e.unlimitedwantsbutlimitedresources)- wantsisnotthesameasdemand,scarcityisnotthesameasshortage- factorsofproduction:- land: naturalresourcesusedinproduction(reward:rent)- labour:humanresourcesusedinproduction(reward:wages)- capital:man-madegoodswhichcontributetoproduction(reward:interest)- entrepreneurship:skillsrequiredtocombineandmanageotherFOPforproduction,risktaker(reward:profits)- freegoodvseconomicgood- freegood:unlimited,notscarce∴doesnotincuropp.cost(e.gsunshine,air)- afreegoodisnotthesameasagoodthatisfreeofcharge- ec.good:limited,scarce∴incursopp.cost- firms:‘production’→resourcesprocessedintogoodsandservices- householdsandconsumers:‘consumption’→actofbuyingproducedgoodsandservicestosatisfywants- opportunitycost:thenextbestalternativeforgone- allocationofresources:- householdsandconsumers→maximumsatisfaction(qualityandpriceofproducts)- firms→maximumprofits- governments→maximumSOLofthepopulation- PPC(ProductionPossibilityCurve):maximumproductivecapacityofacountry- pt.onPPC:resourcesfullyutilised(FE)- pt.withinPPC:attainableproductionpoint(resourcesnotfullyutilised)- pt.abovePPC:unattainableinproduction- movement of pt. alongPPC: moreresourcesusedtoproduceagoodbut lesstotheother good(opp. cost)- shiftofPPC:changeinquantityand/orqualityofFOP- increasedforeignworkers- increasedtrainingofworkers- technologicaladvancement- resourcesdestroyed(e.gwar) 2

3Topic2KeyPoints - microec.vsmacroec.- microeconomics:economicdecisionsofconsumers,producersandhouseholds- macroeconomics:economicissuesandactionsthataffectthewholeeconomy(decisionsofgovt.)- demand:willingnessandabilitytopurchasegoodsandservices- quantitydemanded:changeinpricecausesachangeinquantitydemanded- individualvsmarketdd- individualdemand:amountanindividualdemands- marketdemand:totaldemandforaproduct- conditions:- incom