Scheme of work

Chapter 1 Basic economic ideas and resource allocation (AS Level)

SYLLABUS TOPIC OVERVIEW OF TOPIC SUGGESTED TEACHING AND LEARNING ACTIVITIES STUDENT BOOK
PAGE REFERENCES
a Scarcity, choice Learners need to have an understanding of: Learners could discuss what is meant by “the economic problem” Pages 8–10
and opportunity
yy the fundamental economic problem Learners could work in pairs or groups and think of three examples of choices that could be
cost
made by an individual, a firm and a government
yy the meaning of scarcity and the inevitability of choices at
all levels (individuals, firms, governments) Learners could research a particular economic activity where these three fundamental questions
are addressed
yy the basic questions of what will be produced, how and
for whom Learners could work in pairs or groups and consider the importance of “ceteris paribus” to a
subject which claims to be a science
yy the meaning of the term  “ceteris paribus”
Learners could briefly examine this in terms of such concepts as “marginal cost” and “marginal
yy the margin and decision-making at the margin
revenue” and it could then be revisited later
yy the meaning of the short run, the long run and the
Learners could discuss the difficulties of establishing these particular time periods for
very long run
various enterprises
b Positive and Learners need to have an understanding of: Learners could use examples from the media to contrast examples of positive and Pages 15–16
normative normative statements
yy the distinction between facts and value judgements
statements
c Factors of Learners need to have an understanding of: Learners could research the rewards to the factors of production, i.e. rent in the case of Pages 16–20
production land, wages/salaries in the case of labour, interest in the case of capital and profit in the case
yy the rewards to the factors of production: land, labour,
of enterprise
capital and enterprise
Learners could consider examples of the application of the concept of division of labour in
yy specialisation and the division of labour
particular production examples
d Resource Learners need to have an understanding of: Learners could choose an example of each type of economic system and research these, Pages 20–5
allocation in identifying the essential differences between them. They could also examine a particular case
yy decision-making in market, planned and mixed
different economic study of a system in transition, focusing on the key issues of such a transition
economies
systems and
Learners could work in pairs or groups to examine the role of the factor enterprise in a modern Pages 25–7
issues of transition yy the role of the factor enterprise in a modern economy
economy, perhaps by studying a particular entrepreneur
e Production Learners need to have an understanding of: Learners could practise drawing production possibility curves accurately. They could work in pairs Pages 10–12
possibility curves or groups to consider why the curve is shaped as it is and what could cause both movements
yy shape and shifts of the curve
along it and shifts of the entire curve
yy constant and increasing opportunity costs
Learners could work in pairs or groups to consider the link between a production possibility Pages 12–14
curve and opportunity costs, both in terms of constant opportunity costs and increasing
opportunity costs

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f Money Learners need to have an understanding of: Learners could work in pairs or groups to consider both the key functions and the main Pages 28–9
characteristics of money in a modern, 21st century, economy
yy the functions and characteristics of money in
a modern economy Learners could work in groups to consider exactly what is meant by money in a modern, Pages 27–8
21st century economy, especially in relation to the existence of electronic money. It would also
yy barter, cash and bank deposits, cheques, near
be useful for them to differentiate between what is, and what is not, money
money, liquidity
g Classification Learners need to have an understanding of: Learners could work in pairs or groups and think of examples of free goods, private goods and Pages 30–1
of goods and public goods in their own economy
yy free goods, private goods (economic goods) and
services
public goods Learners could engage in a class debate on why it is that a merit good, such as education or Pages 32–5
health care, is provided by both the public sector and the private sector in most economies
yy merit goods and demerit goods as the outcome of
imperfect information by consumers

Chapter 2 The price system and the micro economy (AS Level)

SYLLABUS TOPIC OVERVIEW OF TOPIC SUGGESTED TEACHING AND LEARNING ACTIVITIES STUDENT BOOK
PAGE REFERENCES
a Demand and Learners need to have an understanding of: Learners could in pairs or groups discuss the difference between wants or desires and effective Pages 39–50
supply curves demand. They could then move on to identify products that they have purchased in the past
yy effective demand
month and analyse the factors which explained the quantity of each which they demanded and
yy individual and market demand and supply also the factors that the producers of these products might have taken into account in deciding
how much of each of these products to supply
yy factors influencing demand and supply
b Price elasticity, Learners need to have an understanding of: Learners could as a class take these two sections of the syllabus together and divide the Pages 51–66
income elasticity material into sections. They could then working in groups of three or four produce a PowerPoint,
yy the meaning and calculation of elasticity of demand
and cross- audiocassette or video presentation together with a set of notes explaining the key terms,
elasticities of yy the range of elasticities of demand concepts and relationships involved in this area of the syllabus. These could then be catalogued
demand and stored for future use
yy the implications for revenue and business decisions of
c Price elasticity price, income and cross-elasticities of demand
of supply
Learners need to have an understanding of:
yy the meaning and calculation of elasticity of supply
yy the range of elasticities of supply
yy the factors affecting elasticity of supply
yy implications for speed and ease with which businesses
react to changed market conditions

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d Interaction of Learners need to have an understanding of: Learners could work in pairs or groups of three or four to research the internet, newspapers Pages 66–9
demand and and magazines to find real-world examples/case studies of events/factors which might shift
yy the meaning of equilibrium and disequilibrium
supply the demand and/or supply curves for a product. Diagrams should then be drawn to explain/
yy effects of changes in supply and demand on equilibrium illustrate the shift in the curve(s) and the consequent impact on the equilibrium price and quantity
e Market equilibrium
price and quantity demanded of the product in question
and disequilibrium
yy applications of demand and supply analysis Learners could also research a particular economic activity or event, e.g. a natural disaster,
to show the way in which the price mechanism works in both the product and factor markets
yy movements along and shifts of the demand and (rationing, signalling and transmission of preferences)
supply curves
yy joint demand (complements) and alternative
demand (substitutes)
yy joint supply
yy the workings of the price mechanism; rationing, signalling
and the transmission of preferences
f Consumer and Learners need to have an understanding of: Learners could work in pairs or groups to discuss the ways in which it might be possible to Page 70
producer surplus estimate the consumer and producer surplus resulting from the consumption and provision of a
yy the meaning and significance
good or service such as internet access or a ticket for a major sporting or musical event
yy how these are affected by changes in equilibrium price
and quantity

Chapter 3 Government microeconomic intervention (AS Level)

SYLLABUS TOPIC OVERVIEW OF TOPIC SUGGESTED TEACHING AND LEARNING ACTIVITIES STUDENT BOOK
PAGE REFERENCES
a Maximum and Learners need to have an understanding of: Learners could try to discover if there are any examples of such price intervention in their own Pages 74–5
minimum prices economy; if so, they could produce a brief report, including appropriate diagrams
yy the meaning of maximum and minimum prices and of
their effect on the market
b Taxes (direct and Learners need to have an understanding of: Learners could work in pairs or groups to investigate the incidence of taxes, i.e. who the burden Pages 75–9
indirect) of a tax actually falls on
yy the impact and incidence of taxes
Learners could research their own economy to discover particular examples of specific taxes and
yy the distinction between specific and ad valorem taxes
ad valorem taxes. A sales tax, such as VAT or GST, is usually an example of an ad valorem tax
yy the distinction between average and marginal rates
Learners could work in pairs or groups and consider the distinction between an average rate of
of taxation
taxation and a marginal rate of taxation, using examples from their own country
yy the distinction between proportional, progressive and
Learners could research taxes in their own country and try to find examples of a progressive, a
regressive taxes
regressive and a proportional tax
yy the canons or principles of taxation
Learners could work in pairs or groups and establish what they would consider to be the essential
features of a “good” form of taxation

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c Subsidies Learners need to have an understanding of: Learners could research the existence of subsidies in their own country, producing a brief report, Pages 79–80
including appropriate diagrams
yy the impact and incidence of subsidies
d Transfer payments Learners need to have an understanding of: Learners could research examples of transfer payments in their own economy, producing a brief Page 80
report on their effect
yy the meaning of transfer payments and of their effect on
the market
e Direct provision Learners need to have an understanding of: Learners could research examples of the direct provision of goods and services in their own Page 81
of goods and economy, producing a brief report on their effect
yy the meaning of the direct provision of goods and services
services
and of their effect on the market
f Nationalisation Learners need to have an understanding of: Learners could have a class debate on the advantages and disadvantages of nationalisation and Pages 81–4
and privatisation privatisation and the effect that such changes would be likely to have in an economy
yy the meaning of nationalisation and privatisation and of
their effect on the market

Chapter 4 The macro economy (AS Level)

SYLLABUS TOPIC OVERVIEW OF TOPIC SUGGESTED TEACHING AND LEARNING ACTIVITIES STUDENT BOOK
PAGE REFERENCES
a Aggregate Learners need to have an understanding of: Learners could practice drawing AD and AS curves without their notes; they could be given a Pages 87–9
demand and number of situations affecting AD and AS and asked to decide whether it is a shift of AD or AS.
yy the shape and determinants of AD and AS curves;
aggregate supply They could draw the diagrams to show this and could then discuss in pairs the outcome for
AD = C + I + G + (X − M)
analysis output, prices and income
yy the distinction between a movement along and a shift in
AD and AS
yy the interaction of AD and AS and the determination of the
level of output, prices and employment
b Inflation Learners need to have an understanding of: Learners could, prior to undertaking the work, discuss in group(s) what they understand by the Pages 90–4
terms inflation and deflation
yy the definition of inflation; degrees of inflation and the
measurement of inflation; deflation and disinflation Learners could try to find out the money and real value for their currency over the last 20 years
yy the distinction between money values and real data Learners could discuss what they think have been the causes of inflation in their country. If time
allows they could try to find out how this compares to other countries
yy the causes of inflation (cost-push and demand-pull inflation)
Learners could investigate the consequences of inflation for their country
yy the consequences of inflation

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c Balance of Learners need to have an understanding of: Learners could find out what their country’s balance of payments is and how it has changed over Pages 94–9
payments the last ten or more years. This could lead on to a discussion as to why there have been changes
yy the components of the balance of payments accounts
(using the IMF/OECD definition): Have a session where they suggest possible reasons for a disequilibrium in each component They
could then try to find out what the real reasons have been for their country
current account; capital and financial account; balancing
item Half the group could look at the consequences for the domestic and half for the external
economies. They could then exchange ideas and discuss them
yy the meaning of balance of payments equilibrium and
disequilibrium
yy the causes of balance of payments disequilibrium in each
component of the accounts
yy the consequences of balance of payments disequilibrium
on domestic and external economy
d Exchange rates Learners need to have an understanding of: Learners could find out what system is used for their country’s exchange rate Pages 99–103
yy the definitions and measurement of exchange rates – Learners could find out how the exchange rate has changed over the last ten years
nominal, real, trade – weighted exchange rates
Learners could discuss why it may have changed
yy the determination of exchange rates – floating, fixed,
Learners could try to find out what have been the consequences of the changes
managed float
(If their country’s exchange rate is completely fixed or is not traded on the market then they should
yy the factors underlying changes in exchange rates
use another country)
yy the effects of changing exchange rates on the domestic
and external economy using AD, Marshall–Lerner and
J-curve analysis
yy depreciation/appreciation
yy devaluation/revaluation
e Terms of trade Learners need to have an understanding of: Learners could practise terms of trade calculations Pages 103–5
yy the measurement of the terms of trade Learners could find out what have been the causes of changes in their country’s terms of trade.
Individually they could then write a paragraph to justify which cause they think has been most
yy the causes of changes in the terms of trade
important
yy the impact of changes in the terms of trade
Learners could discuss as a group the possible consequences of such changes

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f Principles of Learners need to have an understanding of: Learners could practise a number of absolute and comparative advantage examples which Pages 105–13
absolute and they have made up. They could then explain their answers to each other to see if they all fully
yy the distinction between absolute and comparative advantage
comparative understand the ideas involved.
advantage yy free trade area, customs union, monetary union, full
Individuals/pairs etc. could each find out about one of the types of free trade areas
economic union
yy trade creation and trade diversion
yy the benefits of free trade, including the trading
possibility curve
g Protectionism Learners need to have an understanding of: Learners could, if there are sufficient numbers, each find out about one of the methods Pages 113–19
of protection
yy the meaning of protectionism in the context of
international trade Learners could have a debate on the whether their country should adopt free trade or protection
yy different methods of protection and their impact, for
example tariffs, import duties and quotas, export
subsidies, embargoes, voluntary export restraints (VERs)
and excessive administrative burdens (“red tape”)
yy the arguments in favour of protectionism

Chapter 5 Government macro intervention (AS)

SYLLABUS TOPIC OVERVIEW OF TOPIC SUGGESTED TEACHING AND LEARNING ACTIVITIES STUDENT BOOK
PAGE REFERENCES
a Types of policy: Learners need to have an understanding of the: Learners could be given a wide range of possible measures and asked to identify whether they Pages 123–9
fiscal policy, instruments of each policy are fiscal, monetary or supply-side policies
monetary policy,
and supply-side
policy
b Policies to Learners need to have an understanding of: Learners could revise what is meant by a balance of payments disequilibrium Pages 129–32
correct balance
yy assessment of the effectiveness of fiscal, monetary and If there are sufficient numbers, learners could be split into six groups of three to look at a positive
of payments
supply-side policies to correct a balance of payments and three a negative disequilibrium. Two groups to each set of policies. The learners could then
disequilibrium
disequilibrium research how the policy could work, decide on its effectiveness and then report back to the whole
class perhaps using a slide presentation
yy expenditure reducing and expenditure switching
Learners could discuss how these ideas fit with the work they have just completed above
c Policies to correct Learners need to have an understanding of: Learners could, using their knowledge and understanding from Chapter 4, be split into groups Pages 132–4
inflation and to decide how effective each of the policies would be and then under what circumstances these
yy assessment of the effectiveness of fiscal, monetary and
deflation policies would be effective/not effective. They can then present their findings to the class.
supply-side policies to correct inflation and deflation
This could be done prior to any direct teaching of the topic so that this just adds to what the
learners contribute

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Chapter 6 Basic economic ideas and resource allocation (A Level)

SYLLABUS TOPIC OVERVIEW OF TOPIC SUGGESTED TEACHING AND LEARNING ACTIVITIES STUDENT BOOK
PAGE REFERENCES
a Efficient resource Learners need to have an understanding of: Learners could work in pairs or groups to investigate the differences between productive and Pages 137–41
allocation allocative efficiency, using appropriate diagrams
yy the distinction between productive and allocative
efficiency Learners could research Pareto and find out as much as possible about his ideas of optimality
yy the meaning of Pareto optimality Learners could work in pairs or groups to investigate how dynamic efficiency is a distinct form of
efficiency, being “dynamic” rather than “static”
yy the meaning of dynamic efficiency
b Externalities and Learners need to have an understanding of: Learners could work in pairs or groups to investigate the various possible reasons for market Pages 141–6
market failure failure in an economy
yy the reasons for market failure
Learners could work in pairs or groups to investigate examples of both positive and negative
yy the existence of positive and negative externalities for
externalities from their own economy, in relation to both consumers and firms. They could then
both consumers and firms
present a summary of their findings to the rest of the class
yy the reasons for inefficient resource allocation
Learners could work in pairs or groups to investigate the possible reasons for inefficient resource
allocation in their own economy. Their findings could then be summarised in the form of a poster
or wall chart
c Social costs and Learners need to have an understanding of: Learners could investigate a project in their own country, such as the building of a new road or a Pages 146–9
benefits; cost- new airport, and produce a report which summarises the main social costs and social benefits of
yy social costs as the sum of private costs and external costs
benefit analysis such a project
yy social benefits as the sum of private benefits and
Learners could try to discover a proposed project in their own country and carry out a cost-benefit
external benefits
analysis, identifying the key social costs and social benefits of such a proposal
yy the use of cost-benefit analysis in decision-making

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Chapter 7 The price system and the micro economy (A Level)

SYLLABUS TOPIC OVERVIEW OF TOPIC SUGGESTED TEACHING AND LEARNING ACTIVITIES STUDENT BOOK
PAGE REFERENCES
Introduction All learners should review their understanding of the material in Chapter 2 which provides Chapter 2
underpinning theory for this chapter
a Law of diminishing Learners need to have an understanding of: Learners could work in groups discuss the difficulties involved in measuring the utility gained from Pages 152–5
marginal utility consuming a particular product
yy the relationship to derivation of an individual demand
schedule Learners could individually take a product which they regularly purchase/consume in large
quantities and establish whether the extra satisfaction gained from consuming the product
yy the equi-marginal principle
actually declines and if so at which point
yy limitations of marginal utility theory; rational behaviour
Learners could in small groups discuss what factors they take into account in allocating their
versus behavioural economic models
limited income between their various needs/wants
Learners could in small groups identify five economic decisions they have made in the past month
and discuss whether they could be considered “rational” in the economic sense of the word. If
not could such “irrational” decisions be explained in terms of any of the elements of behavioural
economics explained in the text?
Learners could in small groups identify ways individuals might be persuaded/“nudged” into
making individually/socially desirable or beneficial decisions, e.g. not throwing away litter in the
streets or taking more exercise
b Indifference curves Learners need to have an understanding of: Learners could take two goods they purchase/consume frequently and see whether they can Pages 155–67
and budget lines produce an indifference set/indifference curve showing the trade-off between them
yy income, substitution and price effects for various types
of goods Learners could in groups identify a list of products that might be regarded as “normal”, “inferior”
or “Giffen” goods
Learners could in pairs or groups produce a series of posters with diagrams showing an
indifference map, changes in budget lines and the income and substitution effects of price
changes for normal, inferior and Giffen goods

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c Types of cost, Learners need to have an understanding of: Learners could as a class divide the material in this part of the syllabus into smaller sections. Each Pages 167–79
revenue and section could then be allocated to a group of three or four learners who could produce a set of
yy short-run production function: fixed and variable factors
profit, short-run multiple-choice questions and Q&A cards, which should be catalogued and stored for future use
of production. Total product, average product and
and long-run possibly as revision guides
marginal product
production
Learners could in small groups identify a large public limited company or organisation operating
yy law of diminishing returns (law of variable proportions):
in the local area or region and identify the most likely economies of scale available to it and any
– marginal cost and average cost potential diseconomies of scale that might occur

– short-run cost function-fixed costs versus variable costs

– explanation of shape of short-run average cost (SRAC)
yy long-run production function:
– returns to scale
– long-run cost function
– explanation of shape of long-run average cost (LRAC)
– relationship between economies of scale and
decreasing costs
– internal and external economies of scale and
diseconomies of scale
yy revenue: total, average and marginal
yy profit: normal and abnormal (supernormal)
d Different market Learners need to have an understanding of: Learners could in small groups take one of the market structures indicated in the Specification Pages 180–202
structures (perfect competition, monopolistic competition oligopoly, monopoly and contestable markets)
yy perfect competition, imperfect competition (monopoly,
and produce a PowerPoint presentation with accompanying notes to be presented to the
monopolistic competition, oligopoly, natural monopoly)
rest of the class explaining the main characteristics of the structure, the equilibrium price and
yy structure of markets as explained by number of buyers quantity positions for firms in these markets and their performance in terms of profits (normal or
and sellers, nature of product, degree of freedom of entry supernormal), productive allocative, dynamic and X-inefficiency, barriers to entry/exit, price and
and nature of product non-price competition and collusion

yy contestable markets and their implications Learners could in small groups identify examples of the different market structures in their local
area, region or country and produce a report explaining the extent to which the firms within a
yy concentration ratio particular market structure behave/perform in the manner predicted by traditional economic theory

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 SYLLABUS TOPIC OVERVIEW OF TOPIC
e Growth and Learners need to have an understanding of:
survival of firms
yy reasons for small firms
yy integration, diversification, mergers, cartels
f Differing objectives Learners need to have an understanding of:
of firms yy traditional profit maximising objective of firm:
– normal and abnormal profit
– relationship between elasticity and revenue
yy an understanding of other objectives of the firm:
– survival, strategic, satisficing, sales maximisation
– principal-agent problem, for example the divorce of
ownership from control
– behavioural analysis approach to the decision-making
of a firm; the prisoner’s dilemma, two-player pay-off
matrix, kinked demand curve
yy pricing policy
– including price discrimination, limit pricing, price
leadership and mutual interdependence in the case of
oligopoly (including game theory)
yy comparison of performance of firms:
– revenue, output, profits, efficiency, X-inefficiency,
barriers to entry and exit, price competition, non-price
competition and collusion
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SUGGESTED TEACHING AND LEARNING ACTIVITIES STUDENT BOOK
PAGE REFERENCES
Learners could in pairs identify a small firm in their local area (each pair to choose a different firm) Pages 206–7
and identify the factors explaining its continued survival. A whole class discussion could then be See also sections on
held to identify common factors enabling small firms to survive oligopoly
Learners could in pairs or small groups trace the history of the growth of a large company in their (pages 191–2) and
country (each pair/group to select a different company) and produce a report explaining the way different objectives of
it has grown over time, the reasons for its growth and the impact of this growth on the business firms (pages 202–6)
and its customers. A whole class discussion could then be held to identify common factors in the
growth of these firms and the issues that arise
Learners in small groups could take a recent major national or global merger or proposed merger
(each group to select a different example) and produce a presentation with accompanying notes to be
made to the rest of the class explaining the nature of the merger (horizontal, vertical, conglomerate),
the reasons for it and the likely benefits and drawbacks for the companies involved and the wider
community
A whole class discussion could then be held to identify common factors in the mergers and
issues that arise
Learners could in small groups conduct research into the reports of the competition regulator for their
country to establish whether any investigations have been conducted into cartels in their country.
Learners should then produce a short report identifying who was involved in the cartel, the nature of the
collusive activity undertaken by the cartel members and the action taken by the competition regulator
Learners could in small groups each take a different large firm or organisation operating in Pages 202–6
their local area region or country (each group should take a different example) and produce a See also sections on
presentation identifying their main stakeholders, the likely main interests/objectives of these oligopoly
stakeholders and the extent to which the interests/objectives of these stakeholders are the same (pages 191–2) and
or in conflict with one another. Learners might then go on in a plenary to discuss the extent to price discrimination
which the objectives of these firms conform with any of the different models of the objectives of (pages 185–7)
firms explained in the chapter
Learners could in pairs, using the internet, research a range of goods or services, e.g. event
ticket pricing or airline fares to particular destinations, to see if they can find examples of price
discrimination. They could then go on to produce a brief report explaining the type of price
discrimination involved, the factors that make it possible and the benefits and drawbacks for the
firms involved and their customers
Learners could hold a debate on whether the internet makes price discrimination more or
less likely
10
Chapter 8 Government microeconomic intervention (A Level)

SYLLABUS TOPIC OVERVIEW OF TOPIC SUGGESTED TEACHING AND LEARNING ACTIVITIES STUDENT BOOK
PAGE REFERENCES
a Policies to achieve Learners need to have an understanding of: Learners could work in pairs or groups to investigate how the application of indirect taxes and Pages 212–21
efficient resource subsidies could be used to correct particular market failures
yy the application of indirect taxes and subsidies
allocation and to
Learners, following on from the class debate on nationalisation and privatisation, could work in
correct market yy price and output decisions under nationalisation and pairs or groups to investigate the likely effects of such changes on price and output decisions,
failure privatisation using appropriate diagrams
yy prohibitions and licences Learners could research particular examples of prohibitions and licences, and property rights,
yy property rights including appropriate examples from their own country

yy information Learners could investigate the extent to which appropriate information to achieve efficient
resource allocation is made available in their own country
yy regulatory bodies, deregulation and the direct provision of
Learners could research examples of regulatory bodies, deregulation and the direct provision of
goods and services
goods and services from their own economy, producing a brief report
yy pollution permits
Learners could research examples of pollution permits, including examples from their
yy behavioural insights and “nudge” theory own economy
Learners could research examples of “nudge” theory, including examples from their own country,
such as in the case of advertisements about sensible drinking and information contained on
cigarette packets
b Equity and policies Learners need to have an understanding of: Learners could work in pairs or groups to consider the differences between, and the relative Pages 221–7
towards income merits of, equity and efficiency
yy equity versus efficiency
and wealth
Learners could research a particular example of price stabilisation, such as a buffer stock scheme
redistribution yy price stabilisation
Learners could research particular examples of means-tested benefits and transfer payments in
yy means-tested benefits their own economy and consider to what extent they help to achieve a redistribution of income
yy transfer payments and wealth

yy progressive income taxes, inheritance and capital taxes Learners could carry out an investigation into the extent to which progressive income taxes,
inheritance and capital taxes could bring about a redistribution of income and wealth in an
yy negative income tax economy, producing a brief report on their findings
yy poverty trap analysis Learners could research the idea of a “negative income tax” and then investigate a particular
example of such a scheme
yy the Gini coefficient and the Lorenz curve
Learners could research the idea of a “poverty trap” and produce a brief report on why it could
yy inter-generational equity occur in certain situations
Learners could investigate the Gini coefficient and the Lorenz curve and then give a presentation
to the class on what these show about the distribution of income and wealth. A wall chart could
be produced to show the distribution of income and wealth in the learners’ own country
Learners could research the existence of inter-generational equity and make a comparison
between selected countries

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c Labour market Learners need to have an understanding of: Learners could research the various possible factors affecting the demand for labour in their Pages 227–44
forces and own economy
yy factors affecting the demand for labour
government
Learners could research the theory of marginal revenue productivity and assess its usefulness
intervention yy the derivation of an individual firm’s demand for labour
in understanding an individual firm’s demand for labour
using marginal revenue product theory
i the demand
Learners could research the various possible factors affecting the supply of labour in their
for, and the yy factors affecting the supply of labour
own economy
supply of,
labour yy net advantages and the long-run supply of labour
Learners could research the idea of “net advantages” and consider what would be likely to affect
yy competitive product and factor market forces determining the long-run supply of labour in an economy
ii wage
determination wage differentials, transfer earnings and economic rent
Learners could research the reasons why various workers are paid different wages, making use
in perfect yy the influence of trade unions on wage determination of the concepts of transfer earnings and economic rent. They could then present their findings to
markets the whole class
yy the influence of government on wage determination
iii wage Learners could research what is likely to happen in relation to wage determination in an imperfect
determination yy monopsony market, taking into account the existence of trade unions, government and the possible existence
in imperfect of monopsony
markets
d Government failure Learners need to have an understanding of: Learners could research government microeconomic intervention, assessing the extent to which Pages 244–5
in microeconomic such intervention has been effective and the extent to which it has been a failure. They could then
yy the effectiveness of government policies
intervention present a summary of their findings to the whole class

Chapter 9 The macro economy (A Level)

SYLLABUS TOPIC OVERVIEW OF TOPIC SUGGESTED TEACHING AND LEARNING ACTIVITIES STUDENT BOOK
PAGE REFERENCES
a Economic Learners need to have an understanding of: Learners could try to define these, perhaps in pairs, before then comparing their definitions with Pages 248–54
growth, economic those in the book
yy definition of economic growth, economic development
development and
and sustainability Learners could revisit earlier work on production possibility curves and on AD/AS. They could
sustainability
try to find out about business cycles in their countries over the last 50+ years and then plot this
yy actual versus potential growth in national output; output
information on a graph
gap; business (trade) cycle
Learners could discuss as a group what factors they think might lead to economic growth and
yy factors contributing to economic growth
then put them in order of importance for their country. If done prior to classroom learning then this
yy costs and benefits of growth, including using and list could be compared to the book or to conventional economic thought
conserving resources
The group could be divided into two sub-groups with one looking at benefits and one at costs.
The groups could then feed back to each other

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b National income Learners need to have an understanding of: Learners could find out the GDP, GNP and NI for their country for the last 50 years. If they came Pages 254–6
statistics from several countries then the figures could be compared
yy use of national income statistics as measures of
economic growth and living standards Learners could find out the size of their country’s national debt over the past ten years. This could
lead to a discussion both as to why it has/has not changed and whether its size matters
yy gross domestic product (GDP)/gross national product
(GNP)/gross national income (GNI)
yy national debt (government or public sector debt)
c Classification of Learners need to have an understanding of: Learners could discuss what they consider to be important factors in deciding living standards Pages 256–68
countries and economic development before starting this section. This can be used as a basis for
yy indicators of living standards and economic development,
discussing the measurements put forward by economists
monetary, non-monetary, Human Development
Index (HDI), Measure of Economic Welfare (MEW), Learners could find out the characteristics of their country in terms of the indicators listed in
Human Poverty Index (HPI), later supplanted by the the specification. In pairs etc. they could then compare these with one of the BRICS or MINT
Multidimensional Poverty Index (MPI), and the economies. If they are from a BRICS/MINT then they should compare their country with a
Kuznets curve developed one, e.g. USA or UK
yy characteristics of developed, developing and emerging They can also find out the figures for real GDP per capita for their country over the last 25 years to
(BRICS) economies: by population growth and structure, see how economic growth and living standards have changed
income distribution, economic structure, employment
If appropriate time could be allocated to sharing the information where different countries have
composition, external trade and urbanisation in developing
been researched
economies, comparison of economic growth rates and
living standards over time and between countries
d Employment/ Learners need to have an understanding of: Learners could find out how the size and composition of their country’s labour force has Pages 268–76
unemployment changed over the last 25 years. They could then discuss what might happen in the future and its
yy size and components of labour force
implications for the economy
yy labour productivity
Make sure that they fully understand the difference between productivity and production
yy full employment and natural rate of unemployment
Learners could find out what the full employment rate is claimed to be for their country
yy causes of unemployment
Before starting these three sections learner could discuss as a group, or as individuals write
yy consequences of unemployment down, what they think are the causes of unemployment and the consequences of unemployment.
They could use this to compare with what the book says. At the end they could repeat the
yy types of unemployment exercise and see if they have changed their minds
yy unemployment rate; patterns and trends in Learners could find out what has happened to unemployment in their country over the last 25
(un)employment years. Discuss the outcomes
yy difficulties involved in measuring unemployment Learners could find out how unemployment is measured in their country
yy policies to correct unemployment Learners could find out what policies are used in their country to control unemployment. Discuss
how effective these are and whether they are the correct policies

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e The circular flow Learners need to have an understanding of: Learners could practise drawing the circular flow of income for both closed and open economies. Pages 276–85
of income They could practise multiplier examples for a range of different variables
yy closed and open economies
Learners could practise drawing the relevant diagrams correctly
yy the circular flow of income between households, firms,
government and the international economy: the multiplier, They could practise a number of multiplier examples and make sure that they are clear as to the
average and marginal propensities to save and consume difference between, and links with, the accelerator and the multiplier
yy aggregate expenditure (AE) function:
– meaning, components of AE and their determinants
– income determination using AE and income approach;
and withdrawal (leakage) and injection approach
– inflationary and deflationary gaps; full employment
level of income and equilibrium level of income
– autonomous and induced investment; the accelerator
f Money supply Learners need to have an understanding of: Learners could invite a banker, or any other appropriate person, to come and talk about aspects Pages 285–9
(theory) such as definitions of money and sources of money supply
yy quantity theory of money (MV = PT)
yy broad and narrow money supply
yy sources of money supply in an open economy
(commercial banks and credit creation, role of central
bank, deficit financing, quantitative easing, total
currency flow)
yy transmission mechanism of monetary policy
g Keynesian and Learners need to have an understanding of: Learners could work in groups: one group could try to find out about Keynes and one group Pages 289–90
monetarist schools about Milton Freidman etc. Two YouTube videos – ‘Fear The Boom and Bust’ and ‘Fight of the
yy different theoretical approaches to how the macro
Century’ – are excellent ways to help learners understand the differences between the Keynesian
economy functions
and the Monetarist schools.
h The demand Learners need to have an understanding of: Learners could ensure that they can correctly draw the diagrams and explain them to their fellow Pages 290–3
for money and learners
yy liquidity preference theory
interest rate
determination

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i Policies towards Learners need to have an understanding of: Learners could find out what aid their country has received or has provided Pages 293–7
developing
yy types of aid, nature of dependency Investigate how beneficial a multinational operating in their country has been for the country
economies;
policies of trade yy trade and investment, role of multinationals and foreign In groups/pairs etc. find out the role of an international organisation in trade, development, debt,
and aid direct investment (FDI) etc. These sub-groups could then report back to the whole group
yy external debt, the role of the IMF and World Bank
yy the impact of corruption, and the importance of the legal
framework in an economy

Chapter 10

5. Government macro intervention (A Level)

SYLLABUS TOPIC OVERVIEW OF TOPIC SUGGESTED TEACHING AND LEARNING ACTIVITIES STUDENT BOOK
PAGE REFERENCES
a Government Learners need to have an understanding of: Learners could revise their previous work on all these topics Pages 300–2
macro policy aims
yy inflation, balance of payments, exchange rates, Where they have not yet done so, they could find out what has happened to all of these in their
unemployment, growth and development country over the last 25 years
b Inter- Learners need to have an understanding of: Learners could take each relationship, except for the Phillips curve, and, in groups, make a Pages 302–5
connectedness presentation about one of these to the whole group using past learning and research from
yy links between macroeconomic problems and their
of problems their country
interrelatedness, for example:
Learners could discuss as a group the extent to which the expectations-added Phillips curve is
– relationship between internal and external value
correct
of money
– relationship between balance of payments and inflation
– trade-off between inflation and unemployment;
Phillips curve
c Effectiveness of Learners need to have an understanding of: Learners could, using Figure 10.1, individually analyse how each policy could control inflation and Pages 305–8
policy options how it might affect the balance of payments and the exchange rate. They should then come to a
yy problems arising from conflicts between policy objectives
to meet all supported conclusion
on inflation, unemployment, economic growth, balance
macroeconomic
of payments, exchange rates and the redistribution of Learners could discuss as a group what they think government failure could consist of in terms of
objectives
income and wealth the national economy. This could alternatively be done as a debate
yy existence of government failure in macro-economic Learners could debate the validity of the Laffer curve. They could discuss whether it has any
policies application in their country
yy Laffer curve analysis

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