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SecondaryCode 2281

Economics

110 topics and 216 objectives, each one something you should be able to do.

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1.1.1Finite resources and infinite wants3 objectives
  • the way the basic economic problem is defined
  • the concept of scarcity
  • illustrations of the basic economic problem as it applies to: consumers; workers; producers/firms; governments
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1.1.2Resource allocation decisions The three basic economic questions which determine resource allocation:3 objectives
  • what to produce
  • how to produce
  • who to produce for
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1.1.3Economic goods and free goods1 objective
  • the distinction separating economic goods from free goods
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1.2.1Factors of production and their rewards2 objectives
  • what is meant by each factor of production: land, labour, capital and enterprise
  • the income each factor of production receives: rent, wages, interest and profit
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1.2.2Quantity and quality of factors of production1 objective
  • why each factor of production can change in quantity and in quality
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1.3.1Opportunity cost2 objectives
  • definition of opportunity cost
  • instances of opportunity cost across a range of situations
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1.3.2The influence of opportunity cost on decision-making1 objective
  • the choices consumers, workers, producers/firms and governments make when they allocate their resources
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1.4.1Production possibility curves (PPC)2 objectives
  • definition
  • sketching and reading a production possibility curve (PPC) diagram
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1.4.2Points under, on and beyond a PPC1 objective
  • the importance of where the different production points are situated
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1.4.3Movements along a PPC1 objective
  • the importance of moving along a PPC, and the idea of opportunity cost
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1.4.4Shifts of a PPC1 objective
  • why a PPC shifts and what the shift means for the growth of an economy
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2.1.1How markets work3 objectives
  • definition of a market
  • examples of markets
  • the functions performed by those who buy and those who sell
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2.2.1Individual and market demand3 objectives
  • definition of demand
  • the relationship linking individual demand to market demand
  • sketching and interpreting the demand diagram
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2.2.2Movements along a demand curve2 objectives
  • the reasons behind extensions and contractions in demand
  • diagrams showing movement along a demand curve
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2.2.3Shifts of a demand curve2 objectives
  • what causes demand to increase or decrease
  • diagrams that show a demand curve shifting
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2.3.1Individual and market supply3 objectives
  • definition of supply
  • how an individual seller's supply relates to the supply for the whole market
  • sketching and reading a supply diagram
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2.3.2Movements along a supply curve2 objectives
  • the factors behind extensions and contractions in supply
  • diagrams which depict movements along a supply curve
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2.3.3Shifts of a supply curve2 objectives
  • what causes supply to increase or decrease
  • diagrams that show a supply curve shifting
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2.4.1Price mechanism1 objective
  • how the price mechanism settles the basic decisions about allocating resources: what to produce, how, and for whom
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2.4.2Market equilibrium1 objective
  • equilibrium price and equilibrium quantity in a market: what market equilibrium means; reading equilibrium off demand and supply schedules; sketching and reading equilibrium on demand and supply curves
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2.4.3Market disequilibrium2 objectives
  • disequilibrium prices and quantities: what is meant by market disequilibrium; reading disequilibrium from demand and supply schedules; sketching and reading disequilibrium on demand and supply curves
  • shortages, in which demand is larger than supply, and surpluses, in which supply is larger than demand
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2.5.1Causes of price changes1 objective
  • the way that shifts in demand and supply bring about changes in price
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2.5.2Consequences of price changes2 objectives
  • how a change in price affects sales
  • apply demand and supply diagrams to show how shifts in market conditions affect the market
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2.6.1Definition of PED1 objective
  • Definition of PED
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2.6.2Calculation of PED3 objectives
  • the working out of PED by applying the formula
  • interpretation of what each PED figure signifies: perfectly inelastic, inelastic, unitary, elastic, perfectly elastic
  • sketching and reading demand curve diagrams for different values of PED
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2.6.3Determinants of PED1 objective
  • the chief factors affecting if demand is elastic or inelastic
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2.6.4PED, consumer expenditure and firms’ revenue2 objectives
  • how a change in price alters consumer spending and the revenue firms receive, illustrated both on a diagram and by calculation
  • how PED relates to consumer spending and to the revenue firms receive
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2.6.5Significance of PED1 objective
  • what PED means for the decisions made by consumers, workers, producers/firms and government
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2.7.1Definition of PES1 objective
  • Definition of PES
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2.7.2Calculation of PES3 objectives
  • working out of PES by means of the formula
  • making sense of what the PES figure signifies: perfectly inelastic, inelastic, unitary, elastic, perfectly elastic
  • sketching and making sense of supply curve diagrams that depict contrasting PES
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2.7.3Determinants of PES1 objective
  • the principal factors that determine whether supply is elastic or inelastic
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2.8.1Definition of the market economic system1 objective
  • The meaning given to the market economic system
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2.8.2Arguments for and against the market economic system2 objectives
  • the benefits of a market economic system
  • the drawbacks of a market economic system
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2.9.1Definition of market failure1 objective
  • Definition of market failure
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2.9.3Causes of market failure1 objective
  • the factors behind market failure that come from public goods, merit goods, demerit goods, external costs and external benefits, and the misuse of monopoly power
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2.9.4Consequences of market failure1 objective
  • the effects of misallocated resources, covering: too much consumption of demerit goods and of goods causing external costs; too little consumption of merit goods and of goods giving external benefits; the failure to supply public goods; limited output that pushes prices up under a monopoly
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2.10.1Definition of the mixed economic system1 objective
  • The meaning of a mixed economic system
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2.10.2Arguments for and against the mixed economic system2 objectives
  • the upsides of a mixed economic system
  • the downsides of a mixed economic system
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2.10.3Government intervention to address market failure2 objectives
  • indirect taxation, subsidies, and minimum and maximum prices in product markets: what each one means, how to draw and read its diagram, and its advantages and disadvantages
  • definitions, and the advantages and disadvantages of regulation, privatisation, nationalisation, the direct provision of goods and services, and quotas, e.g. limits on how much natural resources may be extracted
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3.1.1Money1 objective
  • money's forms, functions and characteristics
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3.1.2Banking2 objectives
  • the function and significance of central banks
  • the function and significance of commercial banks
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3.2.1Influences on households’ spending, saving and borrowing5 objectives
  • income
  • rate of interest
  • confidence
  • age
  • culture
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3.3.1Factors affecting an individual’s choice of occupation1 objective
  • wage and non-wage factors
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3.3.2Wage determination4 objectives
  • the part labour demand and labour supply play in setting wages
  • trade unions and how much bargaining power they hold compared with others
  • measures set by the state, including the national minimum wage (NMW)
  • sketching and reading diagrams of the labour market that show the effects of a change in demand or supply, and of a national minimum wage
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3.3.3Reasons for differences in wages2 objectives
  • the reasons behind differences: the balance between labour demand and labour supply; relative bargaining strengths; discrimination, e.g. male/female; government policy
  • how these reasons affect workers' wages, depending on: how skilled they are; which economic sector they work in: primary/secondary/tertiary; discrimination between workers, e.g. male/female; whether they work in the public sector or the private sector
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3.3.4Mobility of labour2 objectives
  • why labour's occupational and geographical mobility changes
  • what follows when labour's occupational and geographical mobility changes
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3.3.5Division of labour2 objectives
  • the precise meaning of division of labour (worker specialisation)
  • the benefits and drawbacks of division of labour
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3.4.1Different types of firms3 objectives
  • primary/secondary/tertiary sector firms
  • private sector/public sector firms
  • the strengths and weaknesses of small firms compared with large firms
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3.4.2Mergers1 objective
  • for horizontal, vertical and conglomerate mergers: what each type is, examples of it, and its advantages and disadvantages
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3.4.3Economies and diseconomies of scale2 objectives
  • what economies and diseconomies of scale, internal and external, can do to a firm/industry as it changes its scale of production
  • sketching and reading diagrams of average total cost (ATC) that show economies of scale and diseconomies of scale
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3.5.1Demand for factors of production1 objective
  • what affects demand for factors of production, including demand for the product, the prices of the different factors, how available they are and how productive they are
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3.5.2Labour-intensive and capital-intensive production2 objectives
  • why labour-intensive or capital-intensive production might be chosen
  • the benefits and drawbacks of each form of production
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3.5.3Production and productivity3 objectives
  • how production and productivity differ from one another
  • the factors that shape production and productivity
  • how a change in investment affects productivity
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3.6.2Calculation of costs of production2 objectives
  • the working out of TC, ATC, FC, AFC, VC and AVC
  • the sketching and interpreting of graphs illustrating how variations in output influence production costs
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3.6.3Definition of revenue1 objective
  • the meanings given to total revenue (TR) and average revenue (AR)
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3.6.4Calculation of revenue2 objectives
  • determining TR and AR
  • the effect that sales have on revenue
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3.7.1Competitive markets2 objectives
  • the features, benefits and drawbacks of competitive markets
  • the impact that a large number of firms has on price, quality, choice and profit
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3.7.2Monopoly markets2 objectives
  • the features, benefits and drawbacks of monopoly markets
  • The effect on price, quality, choice and profit of there being only one firm
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4.1.1Macroeconomic aims3 objectives
  • the aims a government pursues for the macroeconomy: economic growth; stable prices or low inflation; full employment or low unemployment; balance of payments stability; environmental sustainability; redistribution of income
  • the justifications for which aims a government picks, along with the criteria a government may set to measure success in reaching each aim
  • possible tensions where one macroeconomic aim undermines another: full employment with stable prices; economic growth with environmental sustainability; full employment with balance of payments stability
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4.2.1Government budget2 objectives
  • the meanings of each of these terms: government budget; government budget deficit; government budget surplus
  • work out how large a government budget deficit or surplus is
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4.2.2Reasons for government spending1 objective
  • the chief fields of government spending, together with the motives behind spending in each field and the consequences of that spending there
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4.2.3Taxation3 objectives
  • the purposes behind taxation: bringing in revenue, deterring consumption of demerit goods, cutting imports, redistributing income, shaping overall demand, fostering environmental sustainability
  • instances of the various ways taxes are grouped: progressive, regressive, proportional; direct, indirect
  • how consumers, workers, producers/firms, the government and the economy are affected by taxation
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4.2.4Definition of fiscal policy1 objective
  • Definition of fiscal policy
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4.2.5Fiscal policy measures1 objective
  • changing taxes and changing government spending
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4.2.6Effects of fiscal policy on government macroeconomic aims1 objective
  • how the steps taken through fiscal policy might help a government meet its macroeconomic aims
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4.3.1Definitions of money supply and monetary policy1 objective
  • Meanings of the money supply and of monetary policy
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4.3.2Monetary policy measures1 objective
  • movements in the interest rate, the money supply and the foreign exchange rate
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4.3.3Effect of monetary policy on government macroeconomic aims1 objective
  • the ways in which measures of monetary policy can help a government reach its macroeconomic goals
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4.4.1Definition of supply-side policy1 objective
  • Definition of supply-side policy
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4.4.2Supply-side policy measures7 objectives
  • education and training
  • infrastructure spending
  • labour market reforms
  • lower direct taxes
  • deregulation
  • stronger incentives for working and investing
  • privatisation
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4.4.3Effects of supply-side policy measures on government macroeconomic aims1 objective
  • how supply-side policy measures can help a government reach its macroeconomic goals
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4.5.1Definition of economic growth1 objective
  • Definition of economic growth
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4.5.2Measurement of economic growth1 objective
  • Gross Domestic Product (GDP) in real terms
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4.5.3Causes and consequences of economic growth2 objectives
  • the manner in which economic growth might arise from greater total demand, a larger quantity of resources or better quality of resources
  • the advantages and disadvantages that come with economic growth
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4.5.4Causes and consequences of recession3 objectives
  • definition of recession
  • what can cause a recession: a fall in total demand, or a fall in the quantity or the quality of resources
  • the impact a recession has on consumers, workers, producers/firms and the government
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4.5.5Policies to promote economic growth1 objective
  • the variety of measures open to government for encouraging economic growth, and how well each one works
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4.6.1Definitions of employment, unemployment and full employment1 objective
  • The meanings given to employment, unemployment and full employment
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4.6.2Measurement of unemployment2 objectives
  • how the labour force survey is used to measure unemployment
  • the formula used to work out the unemployment rate
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4.6.3Causes/types of unemployment4 objectives
  • frictional unemployment
  • structural unemployment
  • cyclical unemployment
  • seasonal unemployment
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4.6.4Consequences of unemployment1 objective
  • the effects that unemployment has on the individual, on producers/firms, on the government and on the economy
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4.6.5Policies to reduce unemployment1 objective
  • the variety of measures open to government for cutting unemployment, and how well each one works
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4.7.1Definitions of inflation and deflation1 objective
  • The meanings of inflation and deflation
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4.7.2Measurement of inflation1 objective
  • how inflation is measured with the Consumer Prices Index (CPI)
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4.7.3Causes of inflation2 objectives
  • demand-pull
  • cost-push
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4.7.4Consequences of inflation2 objectives
  • the impact inflation has on people who save, lend and borrow
  • how consumers, workers, producers/firms and the economy are affected by inflation
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4.7.5Policies to control inflation1 objective
  • the variety of measures open to the government to keep inflation under control, and how well each one works
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5.1.1Indicators of living standards3 objectives
  • Gross Domestic Product (GDP) per head in real terms
  • the Human Development Index (HDI) and what it is made up of
  • the strengths and weaknesses of real GDP per head and of the HDI as indicators
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5.1.2Comparing living standards and income distribution1 objective
  • the causes behind variations in living standards and in how income is shared out, both inside individual countries and between different countries
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5.2.1Definitions of absolute and relative poverty1 objective
  • the contrast drawn between absolute poverty and relative poverty
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5.2.2Causes of poverty5 objectives
  • unemployment
  • low wages
  • illness
  • age
  • environmental factors
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5.2.3Policies to alleviate poverty and redistribute income6 objectives
  • promoting economic growth
  • improved education
  • improved healthcare provision
  • more generous state benefits
  • progressive taxation
  • national minimum wage (NMW)
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5.3.1Factors that affect population growth3 objectives
  • what is meant by the terms birth rate, death rate, net migration, immigration and emigration
  • the ways in which birth rates, death rates and net migration differ from one country to another
  • the explanations for why birth rate, death rate and net migration figures differ from country to country
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5.3.2The effects of changes in the size and structure of populations2 objectives
  • the idea behind an optimum population
  • what happens when population size goes up or down, and when the age and gender makeup of the population shifts
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5.4.1Causes and consequences of international differences1 objective
  • the ways in which nations vary with regard to income; productivity; population growth; the scale of the primary, secondary and tertiary sectors; saving and investment; education; healthcare; natural resources
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6.1.1Specialisation by country3 objectives
  • the meaning of specialisation by country
  • the grounds for specialisation by country: allocating resources in the best way and/or producing at low cost
  • the benefits and drawbacks of specialisation
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6.1.2Free trade2 objectives
  • definition of free trade
  • the benefits and drawbacks of free trade
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6.2.1Definition of globalisation1 objective
  • Definition of globalisation
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6.2.2Causes and consequences of changes in globalisation2 objectives
  • underlying drivers of shifts in globalisation: alterations to trade restrictions; variations in transport costs; variations in communication costs; the movement of multinational companies (MNCs)
  • consequences that shifts in globalisation have for: international trade; competition; the environment; migration; income distribution; economic development
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6.2.3Role of multinational companies (MNCs)1 objective
  • MNCs, and the benefits and drawbacks they bring to host countries and to home countries
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6.2.4Types of trade restrictions / methods of protection4 objectives
  • tariffs
  • import quotas
  • subsidies
  • embargoes
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6.2.5Reasons for trade restrictions8 objectives
  • protect infant (sunrise) industries
  • protect declining (sunset) industries
  • protect strategic industries
  • avoid dumping
  • cut a current account deficit in the balance of payments
  • raise tax revenue
  • limit the inflow of demerit goods from overseas
  • promote environmental sustainability
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6.2.6Consequences of trade restrictions2 objectives
  • the consequences of trade restrictions for the domestic economy and for the nations it trades with
  • the benefits and drawbacks of limiting free trade
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6.3.1Definition of foreign exchange rate1 objective
  • Meaning of the foreign exchange rate
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6.3.2Reasons for buying and selling foreign currencies6 objectives
  • trading goods and services with other countries
  • speculation
  • intervention by the government in currency markets
  • profit, interest and dividend payments made across national borders
  • workers’ remittances
  • capital goods investment flowing between nations
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6.3.3Determination of foreign exchange rate in foreign exchange market4 objectives
  • the meanings of a floating exchange rate, currency appreciation and currency depreciation
  • the demand for a currency alongside its supply
  • how the equilibrium foreign exchange rate is set
  • what brings about swings in the foreign exchange rate: shifts in demand for exports and imports; alterations to the interest rate; speculation
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6.3.4Consequences of changes in foreign exchange rates1 objective
  • the impact of movements in foreign exchange rates on the prices and demand of exports and imports
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6.4.1Structure of the current account of the balance of payments2 objectives
  • the sections that together form a country's current account within its balance of payments: trade in goods; trade in services; primary income; secondary income
  • computation of deficits or surpluses on the balance of payments' current account and on each of its sub-sections
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6.4.2Causes of current account deficit and surplus1 objective
  • why a country's current account can be in deficit or in surplus
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6.4.3Consequences of current account deficit and surplus1 objective
  • effects on GDP, the level of employment, the rate of inflation and the foreign exchange rate
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6.4.4Policies to achieve balance of payments stability1 objective
  • the variety of measures open to governments for securing balance of payments stability, along with how well they work
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