AQA Economics A Level

Microeconomics

3.1.1 The economic problem and economic methodology

Intro video – hope it doesn’t put you off Economics!
Section covers Economic methodology, purpose of Economic activity, Resources, Scarcity, Production possibility frontiers (PPFs)…note we also cover Rationality and Imperfect Information in this section (although officially covered in 3.1.2)

3.1.2 Individual economic decision making (Behavioural Economics)

How do individuals (Consumers) make Economic decisions – Classical economics assumes we are happiness (utility) maximisers – but Behaviourial Economists disagree..

3.1.3 Price determination in a competitive market

Determinants of demand and supply; Elasticities of demand, cross, income, supply; Equilibrium prices and Market Interrelationships.

3.1.4 Production, costs and revenue

Measuring Production, link to returns to scale and law of diminishing returns; Specialisation and Division of Labour; Total, marginal and average Costs; long run vs short run Cost assumptions; Total, marginal and average Revenue; Profit; Technological change

3.1.5 Perfect competition, imperfectly competitive markets & monopoly

The market structures: perfect competion and the imperfect forms (Monopolistic competition, Oligopoly and Monopoly); Objectives of Firms (Profit max, Sales max, Cost Min, Revenue max) & Profit satisficing; Monopoly allows Price Discrimination; Competition and barriers to entry/creative destruction; Contestability; Static and Dynamic efficiency; Consumer and Producer Surplus

3.1.6 The Labour market

Demand for Labour = Marginal Value Product of Labour; Supply of Labour; Wage determination & Employment in a Perfectly & Imperfectly competitive Labour market; Trade Unions; Discrimination; National Minimum Wage

3.1.7 The distribution of income and wealth: poverty and inequality

Income and Wealth are different; how we measure distribution; Relative and Absolute Poverty, Policies to alleviate Poverty and Inequality

3.1.8 The market mechanism, market failure and government intervention in markets

(Big section – typically takes a big chunk of year 12)
a) Market Failure -> Price mechanism – Signalling, Rationing and Incentive function; What is Market Failure – partial mkt failure (externalities) and complete mkt failure (Public goods). Free rider problem, Tragedy of the Commons and Quasi Public Goods; Positive and Negative Externalities of production and consumption; Merit and Demerit goods; Market Imperfections (Information Failure, Monopoly, Geographical or Occupational Immobility).
b) Government Intervention -> Competition Policy; Nationalisation vs Privatisation
c) Government Failure -> Government intervenes in the economy and fails to improve welfare losses in free markets

Macroeconomics

3.2.1 The measurement of macroeconomic performance

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3.2.2 How the macroeconomy works : the circular flow of income, AD/AS analysis, and related concepts

3.2.3 Economic performance

3.2.4 Financial markets and monetary policy

3.2.5 Fiscal policy and supply-side policies

3.2.6 The international economy