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Syllabus 9708 Economics
Recommended Prior Knowledge A2 Level Economics builds on what has been studied and examined at AS Level (the two Core Papers, 1 and 2). Papers
3 and 4 will test the topics in the Supplement but they will also require candidates to demonstrate a knowledge and understanding of the topics in the Core
curriculum content.
General Resources There is a specially written course textbook, AS Level and A Level Economics by C. Bamford et al, published by Cambridge University
Press. This book matches the requirements of the syllabus and is endorsed by CIE. There is a very useful introductory chapter on the economist`s `tool kit`
and there are helpful self-assessment tasks throughout the book to test understanding of the most important concepts. There is also a glossary at the end of
the book which covers the most important terms and concepts. The A2 parts of the book are covered in the last six chapters.
There are a number of other textbooks which could also be used, including Economics by A.G.Anderton and Economics Explained by P.Maunder et al. It
would also be a good idea to use an Economics dictionary, such as the Penguin one by G.Bannock et al, and a revision guide, such as Advanced Economics
Through Diagrams by A.Gillespie. The Resource List in the syllabus gives a number of other examples of textbooks and dictionaries.
There are a number of websites which should prove useful at A2. Www.ebea.org.uk is the website of the Economics and Business Education Association, the
main subject teaching body for Economics. There is also some very useful material on www.bized.ac.uk and www.tutor2u.net. Www.s-cool.co.uk will be
particularly helpful for revision. Government departments in the UK have some interesting websites, such as www.hm-treasury.gov.uk, and the Bank of
England site, www.bankofengland.co.uk, is also worth looking at. At the international level, the following sites may be particularly useful: the World Bank,
www.worldbank.org, the International Monetary Fund, www.imf.org and the World Trade Organisation, www.wto.org.
UNITS
1
2
Basic Economic Ideas (Supplement).
These are mainly covered in the Core curriculum content but for A2, efficient resource allocation is added, covering the concept of economic
efficiency, including both productive and allocative efficiency. Syllabus section 1 Supp. Approximately 5% of the time for the A2 course should be
devoted to this Unit.
The Price System and Theory of the Firm (Supplement).
The law of diminishing marginal utility and the limitations of the theory, budget lines and the income and substitution effects of a price change,
the short-run production function, the law of diminishing returns, the demand for and supply of labour, wage determination, including the role of
trade unions and the government, the long-run production function, different definitions of costs, long-run costs and economies of scale, the
survival of small firms and the growth of firms, the relationship between elasticity and marginal, average and total revenue, the concepts of firm
and industry, traditional objectives of a firm and other possible objectives, different market structures including perfect competition, monopoly,
monopolistic competition, oligopoly and contestable markets, the conduct of firms in such areas as pricing and non-price policies and the
performance of firms in terms of output, profits and efficiency. Syllabus section 2 Supp (a-p). Approximately 25% of the time for the A2 course
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should be devoted to this Unit.
3
4
5
Government Intervention in the Price System (Supplement).
Sources of market failure, market imperfections, including the existence of monopolistic elements and deadweight losses, the objectives of
government microeconomic policy, such as efficiency and equity, policies to correct market failure and redistribute income and wealth, the
effectiveness of such government policies and privatisation, including the transitional problems in an economy when the extent of central
planning is reduced. Syllabus section 3 Supp (a-e). Approximately 15% of the time for the A2 course should be devoted to this Unit.
Theory and Measurement in the Macroeconomy (Supplement).
National income statistics and their uses, different definitions of the money supply, the circular flow of income, the contrast between the
Keynesian and monetarist schools of thought on how the macroeconomy functions, the aggregate expenditure function, inflationary and
deflationary gaps, the multiplier and the accelerator, the determination and interaction of AD and AS, the sources of the money supply and the
relationship between the money supply and the levels of price and output, the demand for money and the determination of interest rates.
Syllabus section 5 Supp (a-h). Approximately 20% of the time for the A2 course should be devoted to this Unit.
Macroeconomic Problems and Policies (Supplement).
Definitions of economic growth and development, indicators of comparative development and underdevelopment in the world economy,
characteristics of developing economies, actual versus potential growth in national output, the factors contributing to economic growth, the costs
and benefits of growth, full employment and the natural rate of unemployment, the causes and consequences of unemployment, the links
between macroeconomic problems such as the relationship between the internal and external value of money, between the balance of payments
and inflation and between inflation and unemployment, the objectives of macroeconomic policy, such as stabilisation and growth, the trade and
aid policies towards developing economies, the types of policy including fiscal, monetary, exchange rate and supply side policies, including the
aims, instruments and effectiveness of each policy, the conflicts between policy objectives and the evaluation of policy options to deal with
economic problems. Syllabus sections 6 Supp (a-c) and 7 Supp (a-d). Approximately 35% of the time for the A2 course should be devoted to this
Unit.
TEACHING ORDER
The Units may be taught in the order indicated above, starting with microeconomics and then moving on to macroeconomics, considering the different
schools of thought on how the macroeconomy functions and examining the possible reasons for government intervention in the economy.
The time allocation is an approximate guide only but will help to give some indication of the time that will need to be allocated to each of the Units.