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IGCSEEconomicsCambridge (CIE)Flashcards1. The Basic Economic Problem1.3 Opportunity Cost

1.3 Opportunity Cost (Cambridge (CIE) IGCSE Economics)

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  • Define the term opportunity cost.

    Opportunity cost is the loss of the next best alternative when making a decision.

  • What does the term scarcity mean?

    Scarcity is the situation where resources are finite in relation to the unlimited wants and needs of humans.

  • What is resource allocation?

    Resource allocation is the decision-making process of assigning scarce resources to their most efficient use.

  • True or False?

    Opportunity cost is a monetary amount.

    False.

    Opportunity cost is not a monetary amount, it is the loss of the next best alternative.

  • Define the term consumer.

    A consumer is an individual or household that uses or consumes goods and services.

  • What does the term producer mean?

    A producer is a business or individual who creates or supplies goods and services.

  • Define the term government.

    A government is the system or group of people running an organised community, often a country.

  • What is a firm?

    A firm is a business organisation that produces or supplies goods or services.

  • Define the term worker.

    A worker is a person who offers their labour in return for a wage or salary.

  • What does the term factors of production mean?

    Factors of production are the scarce resources used in the production of goods and services.

  • True or False?

    Opportunity cost is about the gain of the next best alternative.

    False.

    Opportunity cost is the loss of the next best alternative when making a decision.

  • True or False?

    A consideration of the opportunity cost often results in a different allocation of resources.

    True.

    A consideration of the opportunity cost often results in a different allocation of resources.

Previous:1.2 The Factors of ProductionNext:1.4 Production Possibility Curves

    1. Topic 1

      1.1 The Nature of the Economic Problem

    2. Topic 2

      1.2 The Factors of Production

    3. Topic 3

      1.3 Opportunity Cost

    4. Topic 4

      1.4 Production Possibility Curves

    1. Topic 1

      2.1 Microeconomics & Macroeconomics

    2. Topic 2

      2.2 The Role of Markets in Allocating Resources

    3. Topic 3

      2.3 Demand

    4. Topic 4

      2.4 Supply

    5. Topic 5

      2.5 Price Determination

    6. Topic 6

      2.6 Price Changes

    7. Topic 7

      2.7 Price Elasticity of Demand (PED)

    8. Topic 8

      2.8 Price Elasticity of Supply (PES)

    9. Topic 9

      2.9 Market Economic System

    10. Topic 10

      2.10 Market Failure

    11. Topic 11

      2.11 Mixed Economic System

    1. Topic 1

      3.1 Money & Banking

    2. Topic 2

      3.2 Households

    3. Topic 3

      3.3. Workers

    4. Topic 4

      3.4 Trade Unions

    5. Topic 5

      3.5 Firms

    6. Topic 6

      3.6 Firms & Production

    7. Topic 7

      3.7 Firms’ Costs, Revenue & Objectives

    8. Topic 8

      3.8 Market Structure

    1. Topic 1

      4.1 The Role of Government

    2. Topic 2

      4.2 The Macroeconomic Aims of Government

    3. Topic 3

      4.3 Fiscal Policy

    4. Topic 4

      4.4 Monetary Policy

    5. Topic 5

      4.5 Supply-side Policy

    6. Topic 6

      4.6 Economic Growth

    7. Topic 7

      4.7 Employment & Unemployment

    8. Topic 8

      4.8 Inflation & Deflation

    1. Topic 1

      5.1 Living Standards

    2. Topic 2

      5.2 Poverty

    3. Topic 3

      5.3 Population

    4. Topic 4

      5.4 Differences in Economic Development

    1. Topic 1

      6.1 International Specialisation

    2. Topic 2

      6.2 Globalisation, Free Trade & Protection

    3. Topic 3

      6.3 Foreign Exchange Rates

    4. Topic 4

      6.4 Current Account of Balance of Payments