IGCSE Economics Quiz: Test Your Knowledge with Flashcards

Study Notes

Government Influence on Economic Activities

Governments regulate markets through fiscal and monetary policies to stimulate or restrain economic growth.
They intervene in markets to correct market failures, providing public goods and addressing externalities.
Policies such as taxation and subsidies can influence consumer behavior and resource allocation.

Forces Determining Price and Quantity

Supply and demand are fundamental forces in determining market prices and quantities.
Price elasticity of demand indicates how sensitive consumers are to price changes, influencing sales.
Market equilibrium occurs when the quantity demanded equals the quantity supplied, setting the market price.

Scarcity and Choice in Economics

Scarcity refers to the limited availability of resources, compelling individuals and societies to make choices.
Choices involve trade-offs, where opting for one alternative leads to the loss of another.
Opportunity cost represents the value of the next best alternative that is forgone.

Examples of Different Market Structures

Perfect competition features many firms with identical products, leading to price-taking behaviors.
Monopolistic competition has many firms offering differentiated products while maintaining some control over prices.
Oligopoly consists of a few large firms dominating the market, often leading to interdependent pricing strategies.
Monopoly occurs when a single firm controls the entire market, allowing for significant pricing power.

Impact of Globalization on International Trade

Globalization enhances trade by reducing barriers, fostering economic integration, and increasing market access.
It allows for specialization and comparative advantage, enabling countries to focus on producing goods they can create efficiently.
Global competition influences domestic industries, prompting innovation and potentially leading to job displacement in some sectors.

Production Possibility Curve (PPC) / Production Possibility Frontier (PPF)

The PPC or PPF illustrates the maximum possible output combinations of two goods, given fixed resources and technology.
It highlights trade-offs and opportunity costs by showing what is forgone for the production of one good over another.

Analysis and Decision-Making with PPCs and PPFs

Economists use PPCs and PPFs to identify efficient production levels, resource allocation, and the impact of economic changes.
They serve as tools for visualizing potential growth, resource scarcity, and the effects of shifts in economic policies.

Axes of Production Possibility Curves (PPCs) and PPFs

PPCs and PPFs are typically plotted with one good on each axis, visually representing production trade-offs.

Assumptions About Resources in PPCs and PPFs

PPCs and PPFs assume resources are fixed in quantity and quality, and technology remains constant during the analysis.
They also assume that all resources are fully employed, illustrating maximum efficiency.

Economic Concepts Represented by PPCs and PPFs

PPCs and PPFs help illustrate concepts such as efficiency, marginal cost, opportunity cost, and economic growth.
They visually demonstrate the impact of resource allocation decisions and changes in production capabilities.

Description

Test your knowledge of the market system in IGCSE Economics with this quiz. Explore fundamental economic concepts, the role of consumers, producers, and government in the economy, and understand the concept of scarcity and choice.