Understanding Core Economic Principles Study Guide
This guide covers core microeconomic concepts including demand, supply, market equilibrium, and elasticity. It explains the law of demand, its determinants, and how demand is represented graphically. It also delves into price elasticity of demand and supply, their determinants, and applications. The guide further explores market structures, government intervention, and international trade.
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Market Dynamics of Demand and Supply
The Role of Markets Allocating Resources
An explanation of how markets allow goods and services to be traded through the roles of buyers and sellers.
- market definition
- buyers
- consumers
- sellers
- economic questions
- price mechanism
- goods and services
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Understanding Demand and Demand Curves
This content explores the law of demand, the relationship between price and quantity demanded, and the construction of individual and market demand curves.
- Law of demand
- Price and quantity demanded relationship
- Income and substitution effects
- Law of diminishing marginal utility
- Demand curve
- Demand schedule
- Non-price determinants of demand
- Individual demand
- Market demand
- Movements along the demand curve
- Shifts of the demand curve
Non-price Determinants of Supply
Non-price determinants of supply are factors that influence the willingness and ability of producers to supply a good and/or service.
- Indirect taxes
- Subsidies
- Changes in technology
- Competitive supply
- Joint supply
- Costs of production
- Expectations of producers
Supply and Movements Along the Curve
This lesson examines the behavior of firms, individual supply, market supply, and the law of supply.
- supply
- individual supply
- market supply
- supply curve
- supply schedule
- law of supply
- non-price determinants of supply
- law of diminishing marginal returns
Non-Price Determinants of Demand
Non-price determinants of demand are factors that influence the willingness and ability of consumers to purchase a good or service.
- Law of demand
- Quantity demanded
- Non-price determinants of demand
- Income
- Tastes and preferences
- Future price expectations
- Price of related goods
- Number of consumers
- Demand curve shifts
- Movements along the demand curve
Price Elasticity of Supply Analysis
Price elasticity of supply measures the responsiveness of quantity supplied in a market as a result of a change in price.
- Price elasticity of supply (PES)
- Relatively elastic supply
- Relatively inelastic supply
- Unitary elastic supply
- Perfectly elastic supply
- Perfectly inelastic supply
- Determinants of PES
- Law of supply
Determinants of Price Elasticity of Supply
The determinants of PES can be remembered through the mnemonic TRICS: Time, Rate at which costs increase, Inventory, Capacity, and Substitute Factors of Production.
- Price elasticity of supply
- Time lags
- Primary commodities vs manufactured goods
- Marginal costs
- Law of diminishing marginal returns
- Inventory
- Unused capacity
- Factor mobility
- Substitute factors of production
Cambridge IGCSE Economics Syllabus Overview
Cambridge IGCSE Economics Syllabus Overview
This syllabus focuses on how scarce resources are organised in a world facing challenging economic and environmental issues.
- basic economic problem
- factors of production
- opportunity cost
- production possibility curve
- demand
- supply
- price determination
- price elasticity of demand
- price elasticity of supply
- market economic system
- market failure
- mixed economic system
- money and banking
- households
- workers
- firms
- firms and production
- firms' costs, revenue and objectives
- types of markets
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Macroeconomic Intervention and Economic Development
This topic considers fiscal, monetary and supply-side policy measures used by governments, and examines the measurement, as well as the causes and consequences, of economic growth, unemployment and inflation.
- Monopoly markets
- Macroeconomic aims
- Fiscal policy
- Monetary policy
- Supply-side policy
- Economic growth
- Recession
- Employment and unemployment
- Inflation
- Living standards
- Poverty
- Population
Market Principles of Demand and Supply
Demand Principles and Market Analysis
This topic explores the law of demand, the relationship between price and quantity demanded, and the distinction between individual demand and market demand.
- Law of demand
- Relationship between price and quantity demanded
- Income and substitution effects
- Law of diminishing marginal utility
- Demand curve
- Demand schedule
- Individual demand
- Market demand
- Non-price determinants of demand
- Movements along the demand curve
- Shifts of the demand curve
- Substitutes and complements
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The Role of Markets Allocating Resources
An arrangement that allows goods and services to be traded through the interactions of buyers and sellers.
- market definition
- buyers
- consumers
- sellers
- transactions
- price mechanism
- economic questions
Supply and Movements Along the Curve
Supply refers to the quantities of a good or service that producers are willing and able to supply at different prices.
- supply
- individual supply
- market supply
- supply schedule
- supply curve
- law of supply
- non-price determinants of supply
- law of diminishing marginal returns
International Trade, Globalisation, and Balance of Payments
International Trade and Globalisation
This topic considers the importance of trade between countries and the causes and consequences of globalisation.
- specialisation by country
- free trade
- globalisation
- multinational companies
- trade restrictions
- foreign exchange rates
- floating exchange rate
- appreciation and depreciation
- current account of the balance of payments
- balance of payments stability
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Market Equilibrium and Determinants of Demand and Supply
Price Determination and Market Equilibrium
Price changes are determined by the interaction of the market forces of demand and supply through the price mechanism.
- Price mechanism
- Market equilibrium
- Market disequilibrium
- Demand and supply
- Non-price determinant of supply
- Surpluses
- Shortages
- Excess demand
- Excess supply
Non-Price Determinants of Demand
Non-price determinants of demand are factors that may influence the willingness and ability of consumers to purchase a good and/or service.
- Law of demand
- Quantity demanded
- Non-price determinants of demand
- Income
- Tastes and preferences
- Future price expectations
- Number of consumers
- Price of related goods
- Demand curve shifts
- Movements along the demand curve
Non-price Determinants of Supply
Non-price determinants of supply are factors that may influence the willingness and ability of producers to supply a good and/or service.
- Indirect taxes
- Subsidies
- Changes in technology
- Competitive supply
- Joint supply
- Resources costs
- Expectations of producers
- Size of market
Assessment Details and Syllabus Changes
Economics Assessment and Syllabus Changes
This document details assessment objectives, paper structures, command words, and syllabus content revisions for the 2027-2029 examination period.
- Assessment objectives
- Multiple-choice paper
- Structured questions
- Command words
- Knowledge and understanding
- Analysis
- Evaluation
- Scarcity
- Monopoly
- Market failure
- Mixed economic system
- Economies and diseconomies of scale
- Competitive markets
- Supply-side policy measures
- Causes and consequences of recession
- Seasonal unemployment
- Globalisation
- Free trade
- Trade restrictions
- Floating exchange rate
Fundamentals and Applications of Price Elasticity
Price Elasticity of Demand Fundamentals
Define and calculate price elasticity of demand and explain the possible range of values using diagrams.
- Price elasticity of demand (PED)
- Law of Demand
- Elastic demand
- Inelastic demand
- Quantity demanded
- Total revenue
- Demand curve
Price Elasticity of Demand Special Cases
This topic covers special cases of Price Elasticity of Demand including perfectly elastic demand, perfectly inelastic demand, unit elastic, elastic, and inelastic demand.
- Perfectly Elastic Demand
- Perfectly Inelastic Demand
- Unit Elastic
- Elastic Demand
- Inelastic Demand
- Total Revenue
- Price Elasticity of Demand
Determinants and Applications of PED
This topic explores the determinants of price elasticity of demand and how businesses and governments apply this knowledge.
- Determinants of PED
- Substitutes
- Proportion of income
- Luxury or necessity
- Addictive products
- Time
- Definition of product
- Applications of PED for Businesses
- Government taxation
- Veblen Goods
Price Elasticity of Supply
Price elasticity of supply measures the responsiveness of quantity supplied in a market as a result of a change in price.
- Price elasticity of supply (PES)
- Relatively elastic supply
- Relatively inelastic supply
- Unitary elastic supply
- Perfectly elastic supply
- Perfectly inelastic supply
- Determinants of PES
- Time
- Rate at which costs increase
- Inventory
- Unused capacity
- Factor mobility
- Primary commodities vs manufactured goods
- Marginal costs
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