Course Overview

Economics at A Level is split into two main sections, microeconomics and macroeconomics. Microeconomics delves into the behaviour of individual consumers, firms, and industries. It examines how they make decisions about resource allocation, production, and consumption. For instance, microeconomics analyses how the price of a product affects consumer demand, how firms determine the quantity of goods to produce, and how different market structures, such as perfect competition or monopoly, influence pricing and output.

Macroeconomics takes a broader perspective, looking at the economy as a whole. It studies aggregate economic indicators such as inflation rates and unemployment levels. Macroeconomics seeks to understand the overall functioning of an economy and the factors that drive economic growth, stability, and development. It addresses large-scale economic issues, such as the impact of fiscal and monetary policies, the causes and effects of economic recessions, and the trade-offs governments face when implementing policies to manage economic crises.

Insight into Topics

Paper 1: Microeconomics

Students will be required to acquire knowledge and understanding of a selection of microeconomic models and to apply these to current problems and issues. Microeconomic models such as demand and supply, perfect competition, monopoly, the operation of the price mechanism and the causes of market failure are central to this part of the specification. Students will need to demonstrate a realistic understanding of the decisions made by firms and how their behaviour can be affected by the structure and characteristics of the industry in which they operate. Other key models relate to the operation of labour markets, wage determination and causes of inequalities in the distribution of income and wealth. Students will be expected to understand that traditional economic theory generally assumes that economic agents act rationally but they should also be introduced to models that recognise that consumer and firms’ behaviour is often governed by more complex influences.

Paper 2: Macroeconomics

Students will learn a number of models demonstrating how the macroeconomy works and should appreciate that different economic models provide insights into different aspects of the behaviour of the macroeconomy. When using these models students should be critically aware of the assumptions upon which they are based and their limitations when they are used to make sense of real world phenomena. Furthermore, they should be prepared to propose, analyse and evaluate possible solutions to macroeconomic problems. They will be required to assess the impact and effectiveness of current government policies to deal with these problems, as well as considering alternative policies and approaches. Students should have a good knowledge of developments in the UK economy and government policies over the past fifteen years. They should also be aware of developments in the world economy, including the European Union, and how these have affected the UK.

Paper 3: Investigation

In paper three, students are presented with a case study based on current economic data and news stories. The third paper will include topics from both micro and macroeconomics and students, particularly when answering questions linked to the case study, will be expected to recognise when it is appropriate to use microeconomic and/or macroeconomic models.

Methods of Assessment

Three 2-hour examinations at the end of the course.

– Paper 1: Markets and market failure – 33%

– Paper 2: National and international economy – 33%

– Paper 3: Economic principles and issues – 33%