1.1Scarcity, choice and potential conflicts:
Students are introduced to the basic economic problem and to the way in which different economic agents have different and conflicting objectives.
Topics Covered:
-The economic problem
- Business objectives
-Stakeholders
(economic agents)
and their objectives
1.2 Enterprise, business and the economy
Entrepreneurs are key to a dynamic economy and they take decisions in the context of current economic conditions.
Topics Coved:
-Role of an entrepreneur in the economy
-Entrepreneurial motives
- Factors of Production
- Specialisation
- The Wider Economic Environment
After 3 weeks there will be an assessment to review suitability to continue the course. EOU assessment will be carried out at the end of term. The assessments will consist of AS level questions and will initially look to reinforce the development of chains of logic and the use of application and evaluation skills.
Requirement for survival
Non-essential desire
Scarcity of resources vs unlimited wants
Land, labour, capital, enterprise
Next best alternative foregone
Objective, testable claim
Subjective opinion
Personal assessment of right or wrong
Goods used to produce other goods
Limited resources
Max output combinations curve
Splitting production into tasks
Quantity consumers willing to buy
Quantity producers willing to sell
Responsiveness of demand to price
Responsiveness of demand to income
Responsiveness of demand to other goods prices
Responsiveness of supply to price
Difference between willingness to pay and price
Difference between price received and minimum acceptable
Third-party effect of production/consumption
Non-rival and non-excludable goods
When parties lack full info
Intervention creates worse outcomes
General rise in prices
People without jobs but seeking work
Increase in real GDP
Record of trade flows
Total demand in economy
Total output producers willing to supply
Spending on capital goods
Public sector spending
Exports minus imports
Change in injections produces larger change in GDP
Difference between actual and potential output
Gov spending/tax changes
High growth phase
Negative growth
Interest rate/money supply control
Value of currency
Trade barriers
Integration of world economies
Investment by foreign firms
Firm operating in many countries
Moving production abroad
Using external suppliers
Rivalry between firms
Market dominated by few firms
Single seller market
Different prices to different groups
Falling AC with output
Rising AC with output
Values within firm
Internal expansion
Mergers & acquisitions
Merging with same stage firm
Merging up/down supply chain
Diversified merger
Owners liability limited to investment
Owner of shares
Any party affected by business
Goal to maximise profits
Goal to maximise sales revenue
Goal to increase output
Ethical business practice
How prices allocate resources
Market allocates inefficiently
Government payments to firms
Compulsory payments to gov
Tax on imports
Limit on imports
Output per worker
Supply/demand for labour
Legal pay floor
Policy of stabilising inflation
Cost of borrowing
Transfer to private sector
Transfer to public sector
Optimal use of resources
Resources match consumer preferences
Lowest cost production
Innovation over time
Ease of entry in market
International production links
Unstable currency values
Trade in goods/services part of BOP
Gov spending exceeds revenue
Total gov borrowing
Sudden reduction in lending
GDP per person
Index combining income, health, education
Making product distinct
Dividing consumers into groups
Efficient waste‑reducing production
Producing only when needed
1.3 Introducing the market
The understanding of markets is fundamental to economics and helps students to understand what is produced and how it is sold.
Topics Covered:
- Demand
- Supply
- Price Determination
- Price Mechanism
- Understanding the consumer
- The competition
1.4 The role of credit in the economy
Firms may need to borrow for capital investment and working capital but borrowing can be both costly and risky.
Topics Covered:
- Role of banks in the Economy
- Risk and liability
- Types and sources of credit and the impact of credit within the economy
End of unit assessments based on Topic 1.3 and 1.4, these assessments are completed in timed conditions and are based on A-level exam questions, which helps prepare students for their A-Level examinations.
Requirement for survival
Non-essential desire
Scarcity of resources vs unlimited wants
Land, labour, capital, enterprise
Next best alternative foregone
Objective, testable claim
Subjective opinion
Personal assessment of right or wrong
Goods used to produce other goods
Limited resources
Max output combinations curve
Splitting production into tasks
Quantity consumers willing to buy
Quantity producers willing to sell
Responsiveness of demand to price
Responsiveness of demand to income
Responsiveness of demand to other goods prices
Responsiveness of supply to price
Difference between willingness to pay and price
Difference between price received and minimum acceptable
Third-party effect of production/consumption
Non-rival and non-excludable goods
When parties lack full info
Intervention creates worse outcomes
General rise in prices
People without jobs but seeking work
Increase in real GDP
Record of trade flows
Total demand in economy
Total output producers willing to supply
Spending on capital goods
Public sector spending
Exports minus imports
Change in injections produces larger change in GDP
Difference between actual and potential output
Gov spending/tax changes
High growth phase
Negative growth
Interest rate/money supply control
Value of currency
Trade barriers
Integration of world economies
Investment by foreign firms
Firm operating in many countries
Moving production abroad
Using external suppliers
Rivalry between firms
Market dominated by few firms
Single seller market
Different prices to different groups
Falling AC with output
Rising AC with output
Values within firm
Internal expansion
Mergers & acquisitions
Merging with same stage firm
Merging up/down supply chain
Diversified merger
Owners liability limited to investment
Owner of shares
Any party affected by business
Goal to maximise profits
Goal to maximise sales revenue
Goal to increase output
Ethical business practice
How prices allocate resources
Market allocates inefficiently
Government payments to firms
Compulsory payments to gov
Tax on imports
Limit on imports
Output per worker
Supply/demand for labour
Legal pay floor
Policy of stabilising inflation
Cost of borrowing
Transfer to private sector
Transfer to public sector
Optimal use of resources
Resources match consumer preferences
Lowest cost production
Innovation over time
Ease of entry in market
International production links
Unstable currency values
Trade in goods/services part of BOP
Gov spending exceeds revenue
Total gov borrowing
Sudden reduction in lending
GDP per person
Index combining income, health, education
Making product distinct
Dividing consumers into groups
Efficient waste‑reducing production
Producing only when needed
1.5 Market failure and government intervention
Some markets work better than others and governments may try to make markets work more efficiently for the benefit of society.
Topics Covered:
- Market failure and
Externalities
Government Intervention and failure
1.6 Revenue, costs, profits and cash
An efficient allocation of resources requires a way of measuring the costs of using those resources and the revenues generated by their use.
Topics Covered:
-Revenue and costs
-The relationship between revenue and costs.
- Profit and Loss
- Business survival and cash flow
End of unit assessments based on Topic 1.5 and 1.6, these assessments are completed in timed conditions and are based on A-level exam questions, which helps prepare students for their A-Level examinations
Requirement for survival
Non-essential desire
Scarcity of resources vs unlimited wants
Land, labour, capital, enterprise
Next best alternative foregone
Objective, testable claim
Subjective opinion
Personal assessment of right or wrong
Goods used to produce other goods
Limited resources
Max output combinations curve
Splitting production into tasks
Quantity consumers willing to buy
Quantity producers willing to sell
Responsiveness of demand to price
Responsiveness of demand to income
Responsiveness of demand to other goods prices
Responsiveness of supply to price
Difference between willingness to pay and price
Difference between price received and minimum acceptable
Third-party effect of production/consumption
Non-rival and non-excludable goods
When parties lack full info
Intervention creates worse outcomes
General rise in prices
People without jobs but seeking work
Increase in real GDP
Record of trade flows
Total demand in economy
Total output producers willing to supply
Spending on capital goods
Public sector spending
Exports minus imports
Change in injections produces larger change in GDP
Difference between actual and potential output
Gov spending/tax changes
High growth phase
Negative growth
Interest rate/money supply control
Value of currency
Trade barriers
Integration of world economies
Investment by foreign firms
Firm operating in many countries
Moving production abroad
Using external suppliers
Rivalry between firms
Market dominated by few firms
Single seller market
Different prices to different groups
Falling AC with output
Rising AC with output
Values within firm
Internal expansion
Mergers & acquisitions
Merging with same stage firm
Merging up/down supply chain
Diversified merger
Owners liability limited to investment
Owner of shares
Any party affected by business
Goal to maximise profits
Goal to maximise sales revenue
Goal to increase output
Ethical business practice
How prices allocate resources
Market allocates inefficiently
Government payments to firms
Compulsory payments to gov
Tax on imports
Limit on imports
Output per worker
Supply/demand for labour
Legal pay floor
Policy of stabilising inflation
Cost of borrowing
Transfer to private sector
Transfer to public sector
Optimal use of resources
Resources match consumer preferences
Lowest cost production
Innovation over time
Ease of entry in market
International production links
Unstable currency values
Trade in goods/services part of BOP
Gov spending exceeds revenue
Total gov borrowing
Sudden reduction in lending
GDP per person
Index combining income, health, education
Making product distinct
Dividing consumers into groups
Efficient waste‑reducing production
Producing only when needed
2.1 Business growth and competitive advantage
Success in business requires dynamism and flexibility which must include technical excellence, sensitivity to market trends and imaginative thinking.
Topics Covered:
- Growth
- Methods of growth
- Research and Development
- How the digital economy affects markets and firms
- How small firms compete
2.2 Firms, consumers and elasticities of demand
Measuring consumer response to changes in prices and incomes helps firms make price, product and output decisions.
Topics Covered:
- Price Elasticity of Demand
- Competing on Price
- Types of non-price competition
- Income Elasticity of Demand
End of unit assessments based on Topic 2.1 and 2.2, these assessments are completed in timed conditions and are based on A-level exam questions, which helps prepare students for their A-Level examinations
Requirement for survival
Non-essential desire
Scarcity of resources vs unlimited wants
Land, labour, capital, enterprise
Next best alternative foregone
Objective, testable claim
Subjective opinion
Personal assessment of right or wrong
Goods used to produce other goods
Limited resources
Max output combinations curve
Splitting production into tasks
Quantity consumers willing to buy
Quantity producers willing to sell
Responsiveness of demand to price
Responsiveness of demand to income
Responsiveness of demand to other goods prices
Responsiveness of supply to price
Difference between willingness to pay and price
Difference between price received and minimum acceptable
Third-party effect of production/consumption
Non-rival and non-excludable goods
When parties lack full info
Intervention creates worse outcomes
General rise in prices
People without jobs but seeking work
Increase in real GDP
Record of trade flows
Total demand in economy
Total output producers willing to supply
Spending on capital goods
Public sector spending
Exports minus imports
Change in injections produces larger change in GDP
Difference between actual and potential output
Gov spending/tax changes
High growth phase
Negative growth
Interest rate/money supply control
Value of currency
Trade barriers
Integration of world economies
Investment by foreign firms
Firm operating in many countries
Moving production abroad
Using external suppliers
Rivalry between firms
Market dominated by few firms
Single seller market
Different prices to different groups
Falling AC with output
Rising AC with output
Values within firm
Internal expansion
Mergers & acquisitions
Merging with same stage firm
Merging up/down supply chain
Diversified merger
Owners liability limited to investment
Owner of shares
Any party affected by business
Goal to maximise profits
Goal to maximise sales revenue
Goal to increase output
Ethical business practice
How prices allocate resources
Market allocates inefficiently
Government payments to firms
Compulsory payments to gov
Tax on imports
Limit on imports
Output per worker
Supply/demand for labour
Legal pay floor
Policy of stabilising inflation
Cost of borrowing
Transfer to private sector
Transfer to public sector
Optimal use of resources
Resources match consumer preferences
Lowest cost production
Innovation over time
Ease of entry in market
International production links
Unstable currency values
Trade in goods/services part of BOP
Gov spending exceeds revenue
Total gov borrowing
Sudden reduction in lending
GDP per person
Index combining income, health, education
Making product distinct
Dividing consumers into groups
Efficient waste‑reducing production
Producing only when needed
2.3 Productive efficiency
Firms’ success and living standards in the economy depend on increasing productive efficiency.
Topics Covered:
-Productivity
- Capacity Utilisation
- Efficiency and competitiveness using lean production
- Impact on costs and sales revenue
2.4 Life in a global economy
Globalisation has given firms many new opportunities to trade and to contribute to economic development.
Topics Covered
-Globalisation
-Developed, emerging and developing economies
-International trade
-Exchange Rates
End of unit assessments based on Topic 2.3 and 2.4, these assessments are completed in timed conditions and are based on A-level exam questions, which helps prepare students for their A-Level examinations
Requirement for survival
Non-essential desire
Scarcity of resources vs unlimited wants
Land, labour, capital, enterprise
Next best alternative foregone
Objective, testable claim
Subjective opinion
Personal assessment of right or wrong
Goods used to produce other goods
Limited resources
Max output combinations curve
Splitting production into tasks
Quantity consumers willing to buy
Quantity producers willing to sell
Responsiveness of demand to price
Responsiveness of demand to income
Responsiveness of demand to other goods prices
Responsiveness of supply to price
Difference between willingness to pay and price
Difference between price received and minimum acceptable
Third-party effect of production/consumption
Non-rival and non-excludable goods
When parties lack full info
Intervention creates worse outcomes
General rise in prices
People without jobs but seeking work
Increase in real GDP
Record of trade flows
Total demand in economy
Total output producers willing to supply
Spending on capital goods
Public sector spending
Exports minus imports
Change in injections produces larger change in GDP
Difference between actual and potential output
Gov spending/tax changes
High growth phase
Negative growth
Interest rate/money supply control
Value of currency
Trade barriers
Integration of world economies
Investment by foreign firms
Firm operating in many countries
Moving production abroad
Using external suppliers
Rivalry between firms
Market dominated by few firms
Single seller market
Different prices to different groups
Falling AC with output
Rising AC with output
Values within firm
Internal expansion
Mergers & acquisitions
Merging with same stage firm
Merging up/down supply chain
Diversified merger
Owners liability limited to investment
Owner of shares
Any party affected by business
Goal to maximise profits
Goal to maximise sales revenue
Goal to increase output
Ethical business practice
How prices allocate resources
Market allocates inefficiently
Government payments to firms
Compulsory payments to gov
Tax on imports
Limit on imports
Output per worker
Supply/demand for labour
Legal pay floor
Policy of stabilising inflation
Cost of borrowing
Transfer to private sector
Transfer to public sector
Optimal use of resources
Resources match consumer preferences
Lowest cost production
Innovation over time
Ease of entry in market
International production links
Unstable currency values
Trade in goods/services part of BOP
Gov spending exceeds revenue
Total gov borrowing
Sudden reduction in lending
GDP per person
Index combining income, health, education
Making product distinct
Dividing consumers into groups
Efficient waste‑reducing production
Producing only when needed
2.5 The economic cycle
Economic growth rates are constantly changing, creating instability and uncertainty for firms and economic agents.
Topics Covered:
-The economic cycle
-Circular flow of income, expenditure and output
-Inflation
-Employment and unemployment
2.6 Introduction to macroeconomic policy
Economic policies focus on stabilisation and standards of living but controversy and debate may influence the outcome.
Topics Covered:
-Possible macroeconomic objectives
-Policy Instruments
-Potential policy conflicts and trade-offs
End of unit assessments based on Topic 2.5 and 2.6, these assessments are completed in timed conditions and are based on A-level exam questions, which helps prepare students for their A-Level examinations
Requirement for survival
Non-essential desire
Scarcity of resources vs unlimited wants
Land, labour, capital, enterprise
Next best alternative foregone
Objective, testable claim
Subjective opinion
Personal assessment of right or wrong
Goods used to produce other goods
Limited resources
Max output combinations curve
Splitting production into tasks
Quantity consumers willing to buy
Quantity producers willing to sell
Responsiveness of demand to price
Responsiveness of demand to income
Responsiveness of demand to other goods prices
Responsiveness of supply to price
Difference between willingness to pay and price
Difference between price received and minimum acceptable
Third-party effect of production/consumption
Non-rival and non-excludable goods
When parties lack full info
Intervention creates worse outcomes
General rise in prices
People without jobs but seeking work
Increase in real GDP
Record of trade flows
Total demand in economy
Total output producers willing to supply
Spending on capital goods
Public sector spending
Exports minus imports
Change in injections produces larger change in GDP
Difference between actual and potential output
Gov spending/tax changes
High growth phase
Negative growth
Interest rate/money supply control
Value of currency
Trade barriers
Integration of world economies
Investment by foreign firms
Firm operating in many countries
Moving production abroad
Using external suppliers
Rivalry between firms
Market dominated by few firms
Single seller market
Different prices to different groups
Falling AC with output
Rising AC with output
Values within firm
Internal expansion
Mergers & acquisitions
Merging with same stage firm
Merging up/down supply chain
Diversified merger
Owners liability limited to investment
Owner of shares
Any party affected by business
Goal to maximise profits
Goal to maximise sales revenue
Goal to increase output
Ethical business practice
How prices allocate resources
Market allocates inefficiently
Government payments to firms
Compulsory payments to gov
Tax on imports
Limit on imports
Output per worker
Supply/demand for labour
Legal pay floor
Policy of stabilising inflation
Cost of borrowing
Transfer to private sector
Transfer to public sector
Optimal use of resources
Resources match consumer preferences
Lowest cost production
Innovation over time
Ease of entry in market
International production links
Unstable currency values
Trade in goods/services part of BOP
Gov spending exceeds revenue
Total gov borrowing
Sudden reduction in lending
GDP per person
Index combining income, health, education
Making product distinct
Dividing consumers into groups
Efficient waste‑reducing production
Producing only when needed
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