Economics
What is Economics?
Economics is essentially the study of the interaction of materials, services, labour, exchange, investment and money. As a subject, it attempts to explain why goods are allocated in particular ways by society, and how their value is expressed in price. Students are required to know about microeconomics—the study of individual markets—and macroeconomics, which is the study of the whole economy. You will develop an understanding of economic methods and reasoning, but also a grasp of important policy debates about things like inflation, the balance of trade, or economic growth. You will also develop a capacity to apply different theories of the economy, such as Keynesianism and Monetarism, to history, politics, and contemporary life. Economics at A-level is not characterised by mathematical reasoning, as it is later in a student’s career, but instead depends upon the alliance of critical reasoning with succinct expression. Students will be expected to explain answers, and to structure arguments. Very often, students will also find themselves looking behind the news to understand what is really happening in the economy, which is a skill of great use in future life as well as in academic study.
AS Specification number Edexcel 8ECO1
Unit 1: Competitive Markets; How They Work and Why They Fail
This unit seeks to introduce students to the question of how resources are allocated, and to the price mechanism. It also looks at situations where markets fail to work. Students should be able to apply economics to real-world situations and to understand terms such as price, cost, elasticity, supply and demand by the end of the course. The unit is assessed via an examination of one hour and thirty minutes duration. There are ten multiple-choice questions, to which students must provide an explained answer, and a choice of two data questions, of which students must answer one.
Unit 2: Managing the Economy
This unit introduces students to the macroeconomy. Students should be able to recognise and use diagrams of aggregate demand and supply, and also to assess policies to deal with economic problems from a demand-side, monetary, and supply-side viewpoint. Students should also develop a strong grasp of the major economic indicators, such as GDP, inflation, and unemployment. You will be expected to know about government policies to deal with different economic problems, and to evaluate their usefulness. The unit is assessed over one hour and thirty minutes, during which a student must answer one data response question out of a choice of two.
A2 specification Edexcel 9ECO1
Unit 3: Business Economics and Economic Inefficiency
This unit familiarises students with competition policy, the growth and behaviour of firms, and ways to assess cost. It also looks at the various output decisions available to firms, and at what economists call ‘supply side pressures’. Students will be expected to know how labour markets interact with firms. The examination consists of a one-and-a-half hour paper, which is made up of supported multiple-choice questions and one data response question out of a choice of two.
Unit 4: The Global Economy
This unit requires students to know about macroeconomic policies in greater depth, and to apply lessons to the global economy. The era of globalisation, and the development of the present economic crisis, are essential knowledge, as is a firm grasp of the lessons learned from the previous three modules. Students can draw from, and be asked about, the example of other economies in this paper.
The assessment for this module is two hours long. It consists of one essay question, broken into two parts, from a choice of three topic areas, and one data response out of two questions.
Reading List
Chelsea Independent College requires students to use Alain Anderton’s Economics for A Level, Fifth Edition. (Pearson Education)
Students may also benefit from reading, listening to, or accessing the following;
Introducing Keynesian Economics by Peter Pugh and Chris Garrat (Icon Books Ltd)
Freakonomics; a Rogue Economist Explains Everything by Steven Levitt and Stephen Dubner (Penguin)
The Big Three in Economics (MP3 Cds) by Mark Skousen
The Economist
The Daily Telegraph finance section (available at www.telegraph.co.uk)
Tutor 2U economics, which can be accessed at www.tutor2u.net.