Contents
How to use this series
How to use this book
Introduction
Introduction to command words
Getting started with Cambridge International AS & A Level Economics
1. Basic economic ideas and resources allocation
AS Level
Chapter1: Scarcity, choice and opportunity cost
1.1 The fundamental economic problem
1.2 Unlimited wants
1.3 Choice and opportunity cost
1.4 What to produce, how to produce and for whom to produce?
Chapter2: Economic methodology
2.1 What is economics
2.2 Economics as a social science
2.3 Positive and normative statements
2.4 Meaning of the term ceteris paribus
2.5 The importance of time periods
Chapter3: Factors of production
3.1 The factors of production
3.2 The difference between human capital and physical capital
3.3 Specialisation and the division of labour
3.4 The role of the entrepreneur
Chapter4: Resource allocation in different economic systems
4.1 What are economic systems?
4.2 The market economy
4.3 The planned economy
4.4 The mixed economy
Chapter5: Production possibility curves
5.1 The production possibility curve
5.2 The production possibility curve and opportunity cost
5.3 The shape of the production possibility curve
5.4 Shifts in the production possibility curve
Chapter6: Classification of goods and services End-of-unit exam-style questions
6.1 Excludability and rivalry
6.2 Private goods
6.3 Public goods
6.4 Merit goods, demerit goods and information failure
2. The price system and the microeconomy
AS Level:
Chapter7: Demand and supply curves
7.1 The price mechanism and markets
7.2 Demand
7.3 The demand curve/ The factors that affect demand
7.4 Supply
7.5 The supply curve
7.6 The factors affecting supply
7.7 Cause of a shift in the demand curve
7.8 Causes of a shift in the supply curve
7.9 How to distinguish between a shift in the demand or supply curve and a moment
along the curves.
Chapter8: Price elasticity, income elasticity and cross elasticity of demand
8.1 What do economists mean by elasticity?
8.2 Price elasticity of demand
8.3 Income elasticity of demand
8.4 Cross elasticity of demand
8.5 How price, income and cross elasticities of demand can affect decision-making
Chapter9: Price elasticity of supply
9.1 Price elasticity of supply
9.2 Factors influencing price elasticity of supply
9.3 Implications of PES for the ways in which businesses react to changing market
conditions
Chapter10: The interaction of demand and supply
10.1 Market equilibrium and disequilibrium
10.2 The effects of shifts in demand and supply curves on equilibrium price and
quantity
10.3 Relationships between markets
10.4 The functions of price in resource allocation
Chapter11: Consumer and producer surplus
11.1 The significance of consumer surplus
11.2 The significance of producer surplus
A Level:
Chapter30: Utility
30.1 Utility and diminishing marginal utility
30.2 The equi-marginal principle
30.3 Derivation of an individual demand curve
30.4 Limitations of marginal utility theory and assumptions of rational behaviour
Chapter31: Indifference curves and budget lines
31.1 Indifference curves
31.2 Budget lines
31.3 The income and substitution effects of a price change
31.4 Limitations of the model of indifference curves
Chapter32: Efficiency and market failure
32.1 Introduction to efficiency
32.2 Conditions needed for productive efficiency
32.3 Conditions needed for allocative efficiency
32.4 Pareto optimality
32.5 Dynamic efficiency
32.6 Market failure
Chapter33: Private costs and benefits, externalities and social costs and benefits
33.1 Externalities
33.2 Types of cost and benefits
33.3 Negative and positive externalities of production and consumption
33.4 Asymmetric information and moral hazard
33.5 Use of costs and benefits in analysing decisions
Chapter34: Types of cost, revenue and profit, short-run and long-run production
34.1 Introduction to production
34.2 Short-run production function
34.3 Short-run cost function
34.4 Long-run production function
34.5 Long-run cost function
34.6 Internal and external economies and diseconomies of scale
34.7 Total, average and marginal revenue
34.8 Normal, subnormal and supernormal profit
Chapter35: Different market structures
35.1 Market structures and their characteristics
35.2 Barriers to entry and exit
35.3 Performance of firms in different market structures
35.4 Comparison of monopoly with perfect competition
35.5 Contestable markets
Chapter36: Growth and survival of firms
36.1 Reasons for different sizes of firms
36.2 Internal and external growth of firms
36.3 Integration
36.4 Cartels
36.5 The principal-agent problem
Chapter37: Differing objectives and policies of firms
37.1 The traditional profit maximizing objective
37.2 Other objectives of firms
37.3 Price discrimination
37.4 Other pricing policies
37.5 Relationship between price elasticity of demand and a firm’s revenue
3. Government microeconomic intervention
AS Level:
Chapter12: Reasons for government intervention
12.1 What is market failure?
12.2 How governments intervene in markets
12.3 Controlling prices in markets
Chapter13: Methods and effects of government
13.1 The impact and incidence of specific indirect taxes
13.2 The impact and incidence of subsidies
13.3 The direct provision of goods and services
13.4 Maximum and minimum prices
13.5 Buffer stock schemes
13.6 Provision of information
Chapter14: Addressing income and wealth inequality
14.1 Income and wealth
14.2 Measuring income and wealth inequality
14.3 Economic reasons for inequality of income and wealth
14.4 Policies to redistribute income and wealth
A Level:
Chapter38: Government policies to achieve efficient resource allocation and correct market
failure
38.1 Government policies to correct negative and positive externalities
38.2 Other tools to correct market failure
38.3 Government failure in microeconomic intervention
Chapter39: Equity and redistribution of income and wealth
39.1 Equity, equality and efficiency
39.2 Absolute and relative poverty
39.3 Policies towards equity
Chapter40: Labour market forces and government intervention
40.1 The demand for labour
40.2 The supply of labour
40.3 Wage determination in perfect markets
40.4 Wage determination in imperfect markets
40.5 Wage differentials
40.6 Transfer earnings and economic rent
4. The macroeconomy
AS Level：
Chapter15: National income statistics
15.1 National income statistics
15.2 Gross domestic product and gross national income
15.3 Methods of measuring GDP
15.4 Market prices and basic prices
15.5 Gross values and net values
Chapter16: Introduction to the circular flow of income
16.1 The circular flow of income
16.2 The difference between an open and a closed economy
16.3 The impact of injections and leakages on the circular flow
16.4 Equilibrium and disequilibrium income
16.5 Links between injections and leakages
Chapter17: Aggregate demand and aggregate supply analysis
17.1 Aggregate demand
17.2 Determinants of the components of aggregate demand
17.3 The aggregate demand curve
17.4 Aggregate supply
17.5 Macro equilibrium and disequilibrium
Chapter18: Economic growth
18.1 Economic growth
18.2 Measurement of economic growth
18.3 Nominal GDP and real GDP
18.4 Causes and consequences of economic growth
Chapter19: Unemployment
19.1 Unemployment
19.2 The labour force
19.3 Level of unemployment
19.4 The stock and flow of unemployment
19.5 Measure of unemployment
19.6 The causes of unemployment
19,7 The consequences of unemployment
19.8 How significant is unemployment?
Chapter20: Price stability
20.1 What is price stability
20.2 Inflation, deflation and disinflation
20.3 Calculating the inflation rate
20.4 Measurement of inflation and deflation
20.5 The difficulties of measuring changes in the price level
20.6 The difference between money values and real data
20.7 The causes of inflation
20.8 The consequences of inflation
20.9 Extension: The causes and consequences of deflation
Chapter41: The circular flow of income
41.1 The multiplier
41.2 Components of aggregate demand and their determinants
41.3 Full employment level of national income and equilibrium level of national income
Chapter42: Economic growth and sustainability
42.1 Actual and potential economic growth
42.2 Positive and negative output gaps
42.3 The business cycle
42.4 Policies to promote economic growth
42.5 Inclusive economic growth
42.6 Sustainable economic growth
A Level：
Chapter43: Employment and unemployment
43.1 Full employment
43.2 Equilibrium and disequilibrium unemployment
43.3 Voluntary and involuntary unemployment
43.3 The natural rate of unemployment
43.4 The natural rate of unemployment
43.5 Patterns and trends in unemployment
43.6 Patterns and trends in employment
43.7 The forms of labour mobility
43.8 Policies to reduce unemployment
Chapter44: Money and banking
44.1 Introduction to money
44.2 The money supply
44.3 The quantity theory of money
44.4 Functions of commercial banks
44.5 Causes of changes in the money supply
44.6 The effectiveness of policies to reduce inflation
44.7 The liquidity preference theory
44.8 Interest rate determination
5. Government macroeconomic intervention
AS Level：
Chapter21: Government macroeconomic policy objectives
21.1 Price stability
21.2 Low unemployment
21.3 Economic growth
Chaapter22: Fiscal policy
22.1 Fiscal policy and the budget
22.2 The national debt
22.3 Taxation
22.4 Government spending
22.5 Expansionary and contractionary fiscal policy
Chapter23: Monetary policy
23.1 What is monetary policy
23.2 The tools of monetary policy
23.3 The difference between expansionary and contractionary monetary policy
23.4 The impact of expansionary and contractionary monetary policy
Chapter24: Supply-side policy
24.1 Supply-side policy objectives
24.2 Supply-side policy tools/ The impact pf Supply-side policy tools on the
macroeconomy
24.3 The effectiveness of supply-side policies
A Level:
Chapter45: Government macroeconomic policy
45.1 Inflation
45.2 Balance of payments stability
45.3 Unemployment
45.4 Economic growth
45.5 Economic development
45.6 Sustainability
45.7 Redistribution of income and wealth
Chapter46: Links between macroeconomic problems and their interrelatedness
46.1 The relationship between the internal and external value of money
46.2 The relationship between the balance of payments and inflation
46.3 The relationship between growth and inflation
46.4 The relationship between growth and the balance of payments
46.5 The relationship between inflation and unemployment
Chapter47: Effectiveness of policy options to meet all macroeconomic objectives
47.1 The effectiveness of fiscal policy in relation to different macroeconomic objectives
47.2 The effectiveness of monetary policy in relation to different macroeconomic
objectives
47.3 The effectiveness of supply-side policy in relation to different macroeconomic
objectives
47.4 The effectiveness of exchange rate policy in relation to different macroeconomic
objectives
47.5 The effectiveness of international trade policy in relation to different
macroeconomic objectives
47.6 The problems arising from conflicts between policy objectives
47.7 Government failure in macroeconomic policies
6. International economic issues
AS Level:
Chapter25: The reasons for international trade
25.1 Absolute and comparative advantage
25.2 The benefits of specialization and free trade (trade liberalization)
25.3 Exports, imports and the term of trade
25.4 Limitations of the theory of absolute and comparative advantage
Chapter26: Protectionism
26.1 Protectionism
26.2 Tools of protection and their impact
26.3 The arguments for protectionism
26.4 The arguments against protectionism
Chapter27: Current account of the balance of payments
27.1 What is a country’s balance of payments?
27.2 Components of the current account of balance of payments
27.3 Balance and imbalances (deficit and surplus) in the current account of the
balance of payments
27.4 Current account balance calculations
27.5 Causes of imbalances in the current account of balance of payments
27.6 Consequences of imbalances in the current account on the economy
Chapter28: Exchange rates
28.1 The exchange rate
28.2 How a floating exchange rate is determined
28.3 Depreciation and appreciation of a floating exchange rate
28.4 The causes of changes in a floating exchange rate
28.5 The impact of exchange rate changes on the domestic economy
Chapter29: Policies to correct imbalances in the current account of the balance of
payments
29.1 Government policy objective of stability of the current account
29.2 The effect of fiscal policy on the current account
29.3 The effect of monetary policy on the current account
29.4 The effect of supply-side policy on the current account
A Level:
Chapter48: Policies to correct disequilibrium in the balance of payments
48.1 The components of the balance of payments
48.2 Effect of fiscal, monetary, supply-side, protectionist and the exchange rate
policies on the balance of payments
48.3 Expenditure-switching and expenditure-reducing policies
Chapter49: Exchange rates
49.1 Measurement of exchange rates
49.2 Determination of exchange rates
49.3 Revaluation and devaluation of a fixed exchange rate
49.4 Changes in the exchange rate under different exchange rate systems
49.5 The effects of changing exchange rate on the external economy
Chapter50: Economic development
50.1 How economies are classified in terms of development and national income
50.2 Other indicators of living standards and economic development
50.3 Comparison of economic growth rates and living standards
Chapter51: Characteristics of countries at different levels of development
51.1 Population growth and structure
51.2 Income distribution
51.3 Economic structure
Chapter52: Relationship between countries at different levels of development
52.1 International aid
52.2 Trade and investment
52.3 The role of multinational companies
52.4 The causes and consequences of external debt
52.5 The role of International Monetary Fund and the World Bank
Chapter53: Globalization
53.1 What is globalization
53.2 Trade blocs
53.3 Trade creation
53.4 Trade diversion
Chapter54 Preparing for assessment
Appendix : Key formulae
Glossary
Index
Acknowledgements