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T
Tashh
30/11/2025
Economics
Economics theme 1 revision summary sheets
149
•
30 Nov 2025
•
Economics Theme 1 Revision Sheets with Key Points
T
Tashh
@tashx
1 / 5
Economics as a Social Science
Economics sits firmly in the social sciences because it studies human behaviour and interactions, making it quite different from natural sciences like chemistry or biology. Unlike natural sciences that deal with objective, measurable phenomena, economics is subjective and focuses on how people make decisions.
Economists use models and theories to simplify the complex real world and try to predict human behaviour. Think of the classic supply and demand model - it's a simplified version of reality that helps us understand basic market forces. These models rely on assumptions to work properly.
The most important assumption you'll encounter is ceteris paribus, which means "all other things being equal." This helps economists isolate cause and effect relationships - like how increasing price typically decreases demand, assuming nothing else changes.
Key Point: Economics can't be as precise as natural sciences because human behaviour is unpredictable and economists can't control real-world conditions like scientists control lab experiments.
Specialisation and Division of Labour
Specialisation happens when people, firms, or countries focus on what they do best. Apple specialises in technology, Bangladesh in textiles, and a surgeon specialises in medical procedures. This concept revolutionises how we organise work and trade.
Division of labour breaks down production into separate tasks, with different workers handling each part. In a restaurant, some staff take orders, others cook, and others handle deliveries. This system can dramatically increase productivity and quality.
The economy splits into three main sectors: primary (raw materials like farming), secondary (manufacturing like car production), and tertiary (services like banking and healthcare). Most developed countries have shifted heavily towards tertiary sectors.
However, there's a trade-off. While specialisation can increase efficiency and lower costs, it can also create repetitive work that demotivates employees and makes the workforce less flexible, potentially leading to structural unemployment.
Historical Note: Adam Smith wrote about division of labour in "The Wealth of Nations" back in the 18th century, and his ideas still shape modern economics today.
Functions of Money
Money isn't just coins and notes - it serves four crucial functions that make modern economies possible. As a medium of exchange, money acts as an intermediary between buyers and sellers, eliminating the need for bartering goods directly.
Money also works as a store of value, allowing you to save purchasing power for the future. You can earn money today and spend it next month without losing its usefulness. Additionally, it serves as a unit of account, helping buyers and sellers determine and compare the value of different goods and services.
Finally, money functions as a means of deferred payment, letting you buy something now and pay for it later. This enables credit systems and more flexible economic arrangements.
Quick Tip: Remember that when prices fall, the value of money increases - your pound can buy more stuff when everything gets cheaper!
Economic Systems: Free Market vs Command Economy
Every country must decide how to allocate scarce resources, leading to different economic systems. A free market economy (like Hong Kong) lets consumers and producers make these decisions without government interference, guided by what Adam Smith called the "invisible hand."
Free markets excel at eliminating shortages and surpluses, providing greater choice, and encouraging innovation through competition. However, they can create significant inequality, lead to worker exploitation, and result in overconsumption of harmful goods.
Command economies (like North Korea) have governments making all major economic decisions. While this can create greater equality and macroeconomic stability, it often leads to inefficiency, restricted freedom of choice, and limited innovation due to lack of profit incentives.
Most countries today operate mixed economies, combining both market mechanisms and government intervention to balance efficiency with social welfare.
Economist Spotlight: Marx predicted free markets would collapse due to worker exploitation, while Hayek argued governments couldn't process information effectively enough to run economies successfully.
Mixed Economies and Economic Goals
Mixed economies aim to capture the best of both worlds by having governments pursue multiple objectives simultaneously. Key goals include maintaining high employment, ensuring price stability to control inflation, and regulating markets to keep them competitive.
Governments in mixed systems also focus on decreasing consumption of demerit goods (harmful products like cigarettes), providing essential public services like education, and supplying public goods that private markets won't provide efficiently.
The ultimate aim is achieving high living standards for citizens while maintaining economic stability. This requires careful balancing - too much government intervention stifles innovation, while too little can lead to inequality and market failures.
Different economists have varying views on the ideal balance. Smith favoured individual freedom, Hayek criticised excessive government control, while Marx highlighted the problems of worker exploitation in free markets.
Real-World Application: Most developed countries today are mixed economies, including the UK, which combines free markets with significant government involvement in healthcare, education, and regulation.
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The app is very easy to use and well designed. I have found everything I was looking for so far and have been able to learn a lot from the presentations! I will definitely use the app for a class assignment! And of course it also helps a lot as an inspiration.
Stefan S
iOS user
This app is really great. There are so many study notes and help [...]. My problem subject is French, for example, and the app has so many options for help. Thanks to this app, I have improved my French. I would recommend it to anyone.
Samantha Klich
Android user
Wow, I am really amazed. I just tried the app because I've seen it advertised many times and was absolutely stunned. This app is THE HELP you want for school and above all, it offers so many things, such as workouts and fact sheets, which have been VERY helpful to me personally.
Anna
iOS user
Best app on earth! no words because it’s too good
Thomas R
iOS user
Just amazing. Let's me revise 10x better, this app is a quick 10/10. I highly recommend it to anyone. I can watch and search for notes. I can save them in the subject folder. I can revise it any time when I come back. If you haven't tried this app, you're really missing out.
Basil
Android user
This app has made me feel so much more confident in my exam prep, not only through boosting my own self confidence through the features that allow you to connect with others and feel less alone, but also through the way the app itself is centred around making you feel better. It is easy to navigate, fun to use, and helpful to anyone struggling in absolutely any way.
David K
iOS user
The app's just great! All I have to do is enter the topic in the search bar and I get the response real fast. I don't have to watch 10 YouTube videos to understand something, so I'm saving my time. Highly recommended!
Sudenaz Ocak
Android user
In school I was really bad at maths but thanks to the app, I am doing better now. I am so grateful that you made the app.
Greenlight Bonnie
Android user
very reliable app to help and grow your ideas of Maths, English and other related topics in your works. please use this app if your struggling in areas, this app is key for that. wish I'd of done a review before. and it's also free so don't worry about that.
Rohan U
Android user
I know a lot of apps use fake accounts to boost their reviews but this app deserves it all. Originally I was getting 4 in my English exams and this time I got a grade 7. I didn’t even know about this app three days until the exam and it has helped A LOT. Please actually trust me and use it as I’m sure you too will see developments.
Xander S
iOS user
THE QUIZES AND FLASHCARDS ARE SO USEFUL AND I LOVE THE SCHOOLGPT. IT ALSO IS LITREALLY LIKE CHATGPT BUT SMARTER!! HELPED ME WITH MY MASCARA PROBLEMS TOO!! AS WELL AS MY REAL SUBJECTS ! DUHHH 😍😁😲🤑💗✨🎀😮
Elisha
iOS user
This apps acc the goat. I find revision so boring but this app makes it so easy to organize it all and then you can ask the freeeee ai to test yourself so good and you can easily upload your own stuff. highly recommend as someone taking mocks now
Paul T
iOS user
The app is very easy to use and well designed. I have found everything I was looking for so far and have been able to learn a lot from the presentations! I will definitely use the app for a class assignment! And of course it also helps a lot as an inspiration.
Stefan S
iOS user
This app is really great. There are so many study notes and help [...]. My problem subject is French, for example, and the app has so many options for help. Thanks to this app, I have improved my French. I would recommend it to anyone.
Samantha Klich
Android user
Wow, I am really amazed. I just tried the app because I've seen it advertised many times and was absolutely stunned. This app is THE HELP you want for school and above all, it offers so many things, such as workouts and fact sheets, which have been VERY helpful to me personally.
Anna
iOS user
Best app on earth! no words because it’s too good
Thomas R
iOS user
Just amazing. Let's me revise 10x better, this app is a quick 10/10. I highly recommend it to anyone. I can watch and search for notes. I can save them in the subject folder. I can revise it any time when I come back. If you haven't tried this app, you're really missing out.
Basil
Android user
This app has made me feel so much more confident in my exam prep, not only through boosting my own self confidence through the features that allow you to connect with others and feel less alone, but also through the way the app itself is centred around making you feel better. It is easy to navigate, fun to use, and helpful to anyone struggling in absolutely any way.
David K
iOS user
The app's just great! All I have to do is enter the topic in the search bar and I get the response real fast. I don't have to watch 10 YouTube videos to understand something, so I'm saving my time. Highly recommended!
Sudenaz Ocak
Android user
In school I was really bad at maths but thanks to the app, I am doing better now. I am so grateful that you made the app.
Greenlight Bonnie
Android user
very reliable app to help and grow your ideas of Maths, English and other related topics in your works. please use this app if your struggling in areas, this app is key for that. wish I'd of done a review before. and it's also free so don't worry about that.
Rohan U
Android user
I know a lot of apps use fake accounts to boost their reviews but this app deserves it all. Originally I was getting 4 in my English exams and this time I got a grade 7. I didn’t even know about this app three days until the exam and it has helped A LOT. Please actually trust me and use it as I’m sure you too will see developments.
Xander S
iOS user
THE QUIZES AND FLASHCARDS ARE SO USEFUL AND I LOVE THE SCHOOLGPT. IT ALSO IS LITREALLY LIKE CHATGPT BUT SMARTER!! HELPED ME WITH MY MASCARA PROBLEMS TOO!! AS WELL AS MY REAL SUBJECTS ! DUHHH 😍😁😲🤑💗✨🎀😮
Elisha
iOS user
This apps acc the goat. I find revision so boring but this app makes it so easy to organize it all and then you can ask the freeeee ai to test yourself so good and you can easily upload your own stuff. highly recommend as someone taking mocks now
Paul T
iOS user
Economics Theme 1 Revision Sheets with Key Points
T
Tashh
@tashx
Ever wondered how economists study human behaviour and why countries organise their economies differently? Economics is all about understanding how people make choices with limited resources, and it's more complex than you might think because we're dealing with unpredictable human... Show more
Economics as a Social Science
Economics sits firmly in the social sciences because it studies human behaviour and interactions, making it quite different from natural sciences like chemistry or biology. Unlike natural sciences that deal with objective, measurable phenomena, economics is subjective and focuses on how people make decisions.
Economists use models and theories to simplify the complex real world and try to predict human behaviour. Think of the classic supply and demand model - it's a simplified version of reality that helps us understand basic market forces. These models rely on assumptions to work properly.
The most important assumption you'll encounter is ceteris paribus, which means "all other things being equal." This helps economists isolate cause and effect relationships - like how increasing price typically decreases demand, assuming nothing else changes.
Key Point: Economics can't be as precise as natural sciences because human behaviour is unpredictable and economists can't control real-world conditions like scientists control lab experiments.
Sign up to see the contentIt's free!
Access to all documents
Improve your grades
Join milions of students
By signing up you accept Terms of Service and Privacy Policy
Specialisation and Division of Labour
Specialisation happens when people, firms, or countries focus on what they do best. Apple specialises in technology, Bangladesh in textiles, and a surgeon specialises in medical procedures. This concept revolutionises how we organise work and trade.
Division of labour breaks down production into separate tasks, with different workers handling each part. In a restaurant, some staff take orders, others cook, and others handle deliveries. This system can dramatically increase productivity and quality.
The economy splits into three main sectors: primary (raw materials like farming), secondary (manufacturing like car production), and tertiary (services like banking and healthcare). Most developed countries have shifted heavily towards tertiary sectors.
However, there's a trade-off. While specialisation can increase efficiency and lower costs, it can also create repetitive work that demotivates employees and makes the workforce less flexible, potentially leading to structural unemployment.
Historical Note: Adam Smith wrote about division of labour in "The Wealth of Nations" back in the 18th century, and his ideas still shape modern economics today.
Sign up to see the contentIt's free!
Access to all documents
Improve your grades
Join milions of students
By signing up you accept Terms of Service and Privacy Policy
Functions of Money
Money isn't just coins and notes - it serves four crucial functions that make modern economies possible. As a medium of exchange, money acts as an intermediary between buyers and sellers, eliminating the need for bartering goods directly.
Money also works as a store of value, allowing you to save purchasing power for the future. You can earn money today and spend it next month without losing its usefulness. Additionally, it serves as a unit of account, helping buyers and sellers determine and compare the value of different goods and services.
Finally, money functions as a means of deferred payment, letting you buy something now and pay for it later. This enables credit systems and more flexible economic arrangements.
Quick Tip: Remember that when prices fall, the value of money increases - your pound can buy more stuff when everything gets cheaper!
Sign up to see the contentIt's free!
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Improve your grades
Join milions of students
By signing up you accept Terms of Service and Privacy Policy
Economic Systems: Free Market vs Command Economy
Every country must decide how to allocate scarce resources, leading to different economic systems. A free market economy (like Hong Kong) lets consumers and producers make these decisions without government interference, guided by what Adam Smith called the "invisible hand."
Free markets excel at eliminating shortages and surpluses, providing greater choice, and encouraging innovation through competition. However, they can create significant inequality, lead to worker exploitation, and result in overconsumption of harmful goods.
Command economies (like North Korea) have governments making all major economic decisions. While this can create greater equality and macroeconomic stability, it often leads to inefficiency, restricted freedom of choice, and limited innovation due to lack of profit incentives.
Most countries today operate mixed economies, combining both market mechanisms and government intervention to balance efficiency with social welfare.
Economist Spotlight: Marx predicted free markets would collapse due to worker exploitation, while Hayek argued governments couldn't process information effectively enough to run economies successfully.
Sign up to see the contentIt's free!
Access to all documents
Improve your grades
Join milions of students
By signing up you accept Terms of Service and Privacy Policy
Mixed Economies and Economic Goals
Mixed economies aim to capture the best of both worlds by having governments pursue multiple objectives simultaneously. Key goals include maintaining high employment, ensuring price stability to control inflation, and regulating markets to keep them competitive.
Governments in mixed systems also focus on decreasing consumption of demerit goods (harmful products like cigarettes), providing essential public services like education, and supplying public goods that private markets won't provide efficiently.
The ultimate aim is achieving high living standards for citizens while maintaining economic stability. This requires careful balancing - too much government intervention stifles innovation, while too little can lead to inequality and market failures.
Different economists have varying views on the ideal balance. Smith favoured individual freedom, Hayek criticised excessive government control, while Marx highlighted the problems of worker exploitation in free markets.
Real-World Application: Most developed countries today are mixed economies, including the UK, which combines free markets with significant government involvement in healthcare, education, and regulation.
We thought you’d never ask...
What is the Knowunity AI companion?
Our AI Companion is a student-focused AI tool that offers more than just answers. Built on millions of Knowunity resources, it provides relevant information, personalised study plans, quizzes, and content directly in the chat, adapting to your individual learning journey.
Where can I download the Knowunity app?
You can download the app from Google Play Store and Apple App Store.
Is Knowunity really free of charge?
That's right! Enjoy free access to study content, connect with fellow students, and get instant help – all at your fingertips.
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Most popular content in Economics
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Can't find what you're looking for? Explore other subjects.
Students love us — and so will you.
4.9/5
App Store
4.8/5
Google Play
The app is very easy to use and well designed. I have found everything I was looking for so far and have been able to learn a lot from the presentations! I will definitely use the app for a class assignment! And of course it also helps a lot as an inspiration.
Stefan S
iOS user
This app is really great. There are so many study notes and help [...]. My problem subject is French, for example, and the app has so many options for help. Thanks to this app, I have improved my French. I would recommend it to anyone.
Samantha Klich
Android user
Wow, I am really amazed. I just tried the app because I've seen it advertised many times and was absolutely stunned. This app is THE HELP you want for school and above all, it offers so many things, such as workouts and fact sheets, which have been VERY helpful to me personally.
Anna
iOS user
Best app on earth! no words because it’s too good
Thomas R
iOS user
Just amazing. Let's me revise 10x better, this app is a quick 10/10. I highly recommend it to anyone. I can watch and search for notes. I can save them in the subject folder. I can revise it any time when I come back. If you haven't tried this app, you're really missing out.
Basil
Android user
This app has made me feel so much more confident in my exam prep, not only through boosting my own self confidence through the features that allow you to connect with others and feel less alone, but also through the way the app itself is centred around making you feel better. It is easy to navigate, fun to use, and helpful to anyone struggling in absolutely any way.
David K
iOS user
The app's just great! All I have to do is enter the topic in the search bar and I get the response real fast. I don't have to watch 10 YouTube videos to understand something, so I'm saving my time. Highly recommended!
Sudenaz Ocak
Android user
In school I was really bad at maths but thanks to the app, I am doing better now. I am so grateful that you made the app.
Greenlight Bonnie
Android user
very reliable app to help and grow your ideas of Maths, English and other related topics in your works. please use this app if your struggling in areas, this app is key for that. wish I'd of done a review before. and it's also free so don't worry about that.
Rohan U
Android user
I know a lot of apps use fake accounts to boost their reviews but this app deserves it all. Originally I was getting 4 in my English exams and this time I got a grade 7. I didn’t even know about this app three days until the exam and it has helped A LOT. Please actually trust me and use it as I’m sure you too will see developments.
Xander S
iOS user
THE QUIZES AND FLASHCARDS ARE SO USEFUL AND I LOVE THE SCHOOLGPT. IT ALSO IS LITREALLY LIKE CHATGPT BUT SMARTER!! HELPED ME WITH MY MASCARA PROBLEMS TOO!! AS WELL AS MY REAL SUBJECTS ! DUHHH 😍😁😲🤑💗✨🎀😮
Elisha
iOS user
This apps acc the goat. I find revision so boring but this app makes it so easy to organize it all and then you can ask the freeeee ai to test yourself so good and you can easily upload your own stuff. highly recommend as someone taking mocks now
Paul T
iOS user
The app is very easy to use and well designed. I have found everything I was looking for so far and have been able to learn a lot from the presentations! I will definitely use the app for a class assignment! And of course it also helps a lot as an inspiration.
Stefan S
iOS user
This app is really great. There are so many study notes and help [...]. My problem subject is French, for example, and the app has so many options for help. Thanks to this app, I have improved my French. I would recommend it to anyone.
Samantha Klich
Android user
Wow, I am really amazed. I just tried the app because I've seen it advertised many times and was absolutely stunned. This app is THE HELP you want for school and above all, it offers so many things, such as workouts and fact sheets, which have been VERY helpful to me personally.
Anna
iOS user
Best app on earth! no words because it’s too good
Thomas R
iOS user
Just amazing. Let's me revise 10x better, this app is a quick 10/10. I highly recommend it to anyone. I can watch and search for notes. I can save them in the subject folder. I can revise it any time when I come back. If you haven't tried this app, you're really missing out.
Basil
Android user
This app has made me feel so much more confident in my exam prep, not only through boosting my own self confidence through the features that allow you to connect with others and feel less alone, but also through the way the app itself is centred around making you feel better. It is easy to navigate, fun to use, and helpful to anyone struggling in absolutely any way.
David K
iOS user
The app's just great! All I have to do is enter the topic in the search bar and I get the response real fast. I don't have to watch 10 YouTube videos to understand something, so I'm saving my time. Highly recommended!
Sudenaz Ocak
Android user
In school I was really bad at maths but thanks to the app, I am doing better now. I am so grateful that you made the app.
Greenlight Bonnie
Android user
very reliable app to help and grow your ideas of Maths, English and other related topics in your works. please use this app if your struggling in areas, this app is key for that. wish I'd of done a review before. and it's also free so don't worry about that.
Rohan U
Android user
I know a lot of apps use fake accounts to boost their reviews but this app deserves it all. Originally I was getting 4 in my English exams and this time I got a grade 7. I didn’t even know about this app three days until the exam and it has helped A LOT. Please actually trust me and use it as I’m sure you too will see developments.
Xander S
iOS user
THE QUIZES AND FLASHCARDS ARE SO USEFUL AND I LOVE THE SCHOOLGPT. IT ALSO IS LITREALLY LIKE CHATGPT BUT SMARTER!! HELPED ME WITH MY MASCARA PROBLEMS TOO!! AS WELL AS MY REAL SUBJECTS ! DUHHH 😍😁😲🤑💗✨🎀😮
Elisha
iOS user
This apps acc the goat. I find revision so boring but this app makes it so easy to organize it all and then you can ask the freeeee ai to test yourself so good and you can easily upload your own stuff. highly recommend as someone taking mocks now
Paul T
iOS user