Chapter 1 • 2 sets
Scarcity, choice, models and economic methodology
Economics as a social science, scarcity and choice, opportunity cost, the production possibilities curve, and economic models.
Economic methodology, the assumptions behind models, and the development of the main schools of economic thought.
Chapter 2 • 12 sets
Demand, supply, elasticity, market failure and market structures
Price and quantity demanded, movements along the demand curve, and the non-price factors that shift demand.
Price and quantity supplied, movements along the supply curve, and the non-price factors that shift supply.
Equilibrium and disequilibrium, how prices allocate resources, and calculating consumer and producer surplus.
Rational choice, behavioural economics, departures from maximising behaviour, and alternative objectives of firms.
Price elasticity of demand, its importance and applications, and income elasticity as a measure of responsiveness.
Price elasticity of supply, the factors that determine it, and how to interpret different PES values.
Why governments intervene, indirect taxes and subsidies, price controls, direct provision, regulation, and nudges.
Market failure, negative and positive externalities, common access resources, and ways of correcting inefficiency.
The characteristics of public goods, why markets underprovide them, and the effects of non-excludability and non-rivalry.
Asymmetric information, how unequal information affects market outcomes, and the inefficiencies that follow.
Perfect competition, monopoly, oligopoly and monopolistic competition, profit maximisation, and government intervention.
How market outcomes create inequality, why unequal distribution persists, and the limits of markets in achieving equity.
Chapter 3 • 7 sets
Measurement, AD and AS, objectives, and demand and supply-side policy
National income, the circular flow, GDP and GNI, the business cycle, and alternative measures of living standards.
Aggregate demand, short-run aggregate supply, competing views of AS, long-run capacity, and macroeconomic equilibrium.
Growth, low unemployment, stable inflation, sustainable government debt, and the conflicts between these objectives.
Measuring poverty and inequality, identifying their causes, and evaluating the tax and policy tools used to reduce them.
The aims of monetary policy, the role of central banks, and the tools used to influence demand and inflation.
Government spending and taxation, the Keynesian multiplier, and the strengths and limitations of fiscal policy.
Types of supply-side policy, their effect on productive potential, and what determines their effectiveness over time.
Chapter 4 • 10 sets
Trade, protection, exchange rates, balance of payments and development
The benefits of free trade, specialisation between countries, and absolute and comparative advantage.
Tariffs, import quotas, export subsidies, administrative barriers, and how governments apply trade protection.
Arguments for protectionism, arguments for freer trade, and the consequences for consumers, producers and economies.
What economic integration means, the different forms of trading bloc, and the role of the World Trade Organization.
Exchange-rate systems, the causes and effects of currency movements, and fixed versus floating arrangements.
Components of the balance of payments, links to exchange rates, persistent imbalances, Marshall-Lerner and the J-curve.
The Sustainable Development Goals, the link between poverty and sustainability, and long-term development trade-offs.
Single development indicators, composite measures, and the strengths and limitations of each approach.
Poverty traps and the economic, political and social barriers that restrict growth and slow rising living standards.
Trade strategies, diversification, market-led and interventionist policies, FDI, aid, institutional reform, and the SDGs.
Need the theory first?
Read the SL Revision Notes first, or check the SL Curriculum Framework to see what each chapter covers.
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