Economics

Economics as a social science

Positive vs normative statements

Value judgements in economic decision-making

Purpose of economic activity: meeting needs and wants

Three basic economic questions: what, how, for whom

Factors of production: land, labour, capital, enterprise

Scarcity, choice and opportunity cost

Production possibility frontiers: trade-offs and opportunity cost

Productive efficiency vs allocative efficiency on a PPF

PPF shifts: growth and changes in resources/technology

Unemployment of resources on a PPF

Rational decision-making and economic incentives

Total utility and marginal utility

Diminishing marginal utility

Utility maximisation (marginal analysis)

Importance of thinking at the margin

Why information matters for consumer decisions

Asymmetric information: what it is and why it matters

How imperfect information can cause market failure

Bounded rationality and bounded self-control

Behavioural biases: rules of thumb and anchoring

Behavioural biases: availability and social norms

Altruism and perceptions of fairness

Choice architecture and framing

Nudges: how they work and why they’re used

Default, restricted and mandated choices

Demand curves: price and quantity demanded

Shifts in demand: causes and examples

Price elasticity of demand: calculation and interpretation

Income elasticity of demand: normal vs inferior goods

Cross elasticity of demand: substitutes vs complements

Elasticity and total revenue (total expenditure)

Factors affecting elasticities of demand

Supply curves: price and quantity supplied

Shifts in supply: causes and examples

Price elasticity of supply: calculation and interpretation

Factors affecting price elasticity of supply

Market equilibrium: where demand meets supply

Disequilibrium: excess demand and excess supply

How price changes restore equilibrium

Interrelated markets: joint and derived demand

Interrelated markets: joint supply and composite demand

Tracing knock-on effects across related markets

Turning inputs into outputs: what production means

Productivity and labour productivity

Specialisation and division of labour: why they raise output

Exchange and money as a medium of exchange

Short run vs long run in production decisions

Marginal, average and total returns

The law of diminishing returns

Returns to scale: increasing, constant, decreasing

Fixed costs vs variable costs

Total, average and marginal costs

Why cost curves have their shapes

How factor prices and productivity shift costs

Internal economies of scale: types and examples

External economies of scale: types and examples

Diseconomies of scale: why they happen

Minimum efficient scale and industry implications

Total, average and marginal revenue

Average revenue as the firm’s demand curve

Profit: normal vs abnormal (supernormal)

The role of profit in a market economy

Invention vs innovation

How technological change affects costs and markets

Creative destruction linked to technological change

Market structure spectrum: perfect competition to monopoly

Market classification: firms, differentiation, entry/exit

Firm objectives: profit maximisation and alternatives

Profit-maximising rule: MC = MR

Divorce of ownership from control: why it happens

Satisficing: what it is and why firms might do it

Perfect competition: key assumptions

Perfect competition short run vs long run outcomes

Price takers and the industry supply story

Perfect competition as a yardstick for efficiency

Monopolistic competition: characteristics

Monopolistic competition short run vs long run diagrams

Non-price competition in monopolistic competition

Oligopoly: characteristics and why markets differ

Oligopoly conduct vs structure definitions

Concentration ratios: calculation and interpretation

Collusive vs non-collusive oligopoly

Cooperation vs collusion

Kinked demand curve as interdependence illustration

Barriers to entry and strategic behaviour in oligopoly

Monopoly: diagrammatic model and outcomes

Monopoly power: sources (barriers, branding, differentiation)

Pros and cons of monopoly

Price discrimination: conditions needed

Price discrimination: welfare effects on consumers/producers

Competition benefits in short run vs long run

Creative destruction as a competition process

Contestable markets: sunk costs and hit-and-run entry

Static efficiency vs dynamic efficiency

Productive vs allocative efficiency conditions

Consumer and producer surplus (diagram skills)

Deadweight and welfare loss (e.g., monopoly)

Derived demand: labour demand depends on product demand

Marginal productivity theory of labour demand

Shifts in labour demand: causes and examples

Elasticity of demand for labour: determinants

Monetary and non-monetary factors affecting labour supply

Shifts in labour supply: causes and examples

Wage determination in competitive labour markets (diagrams)

Relative wages: role of market forces

Why real-world labour markets are imperfect

Monopsony: effects on wages and employment

Trade unions: sources of bargaining power

Trade unions in competitive vs monopsony markets (diagrams)

National Minimum Wage: labour market effects

NMW pros and cons (workers, firms, economy)

Wage discrimination: conditions needed

Discrimination by gender, ethnicity and other factors

Evaluating discrimination: efficiency and equity

Income vs wealth: clear distinction

Why distributions differ: skills, inheritance and markets

Equality vs equity: fairness as a value judgement

Lorenz curves: interpretation

Gini coefficient: interpretation (no calculation)

Benefits and costs of greater equality

Benefits and costs of greater inequality

Absolute vs relative poverty

Causes of poverty: individual, structural, regional

Consequences of poverty: economic and social

Policies to reduce poverty: transfers and welfare support

Policies to reduce poverty: minimum wage and in-work benefits

Policies to influence distribution: tax and public spending

Evaluating redistribution: efficiency–equity trade-offs

Prices as signals, incentives and rationing devices

Strengths and weaknesses of the price mechanism

Extending markets into new areas: pros and cons

Market failure: misallocation of resources

Complete vs partial market failure

Public goods: non-rivalry and non-excludability

Quasi-public goods and technology impacts

Free-rider problem and missing markets

Tragedy of the commons and environmental failure

Externalities: private vs social costs/benefits

Negative externalities: over-production (diagram analysis)

Positive externalities: under-production (diagram analysis)

Property rights and externalities

Merit goods: why they’re under-consumed

Demerit goods: why they’re over-consumed

Imperfect information as a source of market failure

Monopoly power and resource misallocation

Factor immobility and persistent market failure

Competition policy: aims and broad tools

Costs and benefits of competition policy

Public ownership: arguments for and against

Privatisation: arguments for and against

Regulation vs deregulation and regulatory capture

Intervention tools: taxes, subsidies, price controls

Intervention tools: state provision and regulation

Intervention tools: property rights and permits

Government failure: how intervention can worsen outcomes

Unintended consequences and administrative costs

Macroeconomic objectives: growth, inflation, unemployment, current account

Why policy objectives can conflict (short run)

How objectives change over time: priorities and trade-offs

Core indicators: real GDP and real GDP per capita

Inflation indicators: CPI and RPI uses

Unemployment measures: what they show and miss

Productivity measures and why they matter

Current account data: deficits and surpluses

Index numbers: base year and weights

Reading and interpreting index data in context

Using GDP to assess living standards

Limits of GDP comparisons across time/countries

PPP exchange rates and why they’re used

What national income measures and why it matters

Nominal vs real variables and adjustment

Circular flow model: households, firms, government, overseas

Income = output = expenditure identity

Equilibrium income vs full employment income

Injections vs withdrawals: what counts as each

How injections/withdrawals change national income

Aggregate demand: what it is and why it slopes down

Shifts in AD: key causes and examples

SRAS shifts: costs and productivity

LRAS: fundamentals and why it differs

Underlying growth as a rightward shift of LRAS

Macroeconomic equilibrium on AD/AS diagrams

Determinants of C, I and G

Determinants of X and M (including exchange rates)

Saving vs investment: key distinction

Accelerator process: conceptual

Multiplier: why spending changes amplify

MPC and the multiplier

Calculating the multiplier from MPC

Keynesian AS curve: implications and use

Institutional factors affecting AS: banking and finance

Short-run vs long-run economic growth

Demand-side vs supply-side drivers of growth

Costs and benefits of growth: people, economy, environment

Sustainable growth: meaning and importance

Economic cycle: phases and identification

Positive vs negative output gaps and implications

Shocks and instability: demand vs supply shocks

Credit growth, debt and financial fragility

Asset price bubbles and destabilising speculation

Animal spirits and herding: confidence effects

Unemployment: different causes behind one rate

Cyclical unemployment and output gap link

Supply-side unemployment and LRAS implications

Inflation, deflation and disinflation: distinctions

Demand-pull vs cost-push inflation

Fisher equation MV = PQ and Quantity Theory

Expectations and inflation dynamics

Consequences of inflation: micro and macro

Consequences of deflation: micro and macro

Phillips curve: short run

Long-run Phillips curve: vertical/L-shaped idea

Policy conflicts: inflation, unemployment, growth trade-offs

Reconciling objectives: AD/AS policy evaluation

Money: functions and characteristics

Narrow vs broad money: definitions and uses

Money, capital and foreign exchange markets

Why financial markets matter for the real economy

Debt vs equity finance for firms

Bonds: coupon, maturity and yields

Bond prices and interest rates: inverse relationship

Commercial vs investment banks: differences

Commercial bank balance sheets: assets, liabilities, capital

Bank objectives: liquidity, profitability, security

Credit creation by banks: conceptual model

Central bank functions: Bank of England focus

Monetary policy aims and current objectives

MPC: role and bank rate decisions

MPC factors when setting bank rate

Transmission mechanism: rates to spending/inflation

Exchange rates and monetary policy effects on AD

How the BoE influences money supply growth

QE, Funding for Lending and forward guidance

Why banks fail: maturity mismatch and liquidity

Liquidity and capital ratios: interpretation

Moral hazard in financial systems

Systemic risk and real-economy spillovers

UK regulation: BoE, PRA, FPC, FCA roles

Fiscal policy: spending, taxation and budget balance

Fiscal policy’s macro and micro roles

Using fiscal policy to shift AD

Using fiscal policy to affect AS

Public expenditure: types and why it changes

Why governments levy taxes: revenue and redistribution

Direct vs indirect taxes

Progressive, proportional and regressive taxes

Principles of taxation: equity and efficiency

UK taxes: examples and relative merits

Budget balance vs national debt link

Cyclical vs structural deficits and surpluses

Effects of deficits and surpluses on performance

Why national debt size matters (and when)

Office for Budget Responsibility: role

Evaluating austerity vs stimulus in context

Supply-side policies vs supply-side improvements

How incentives raise potential output

Supply-side effects on unemployment and inflation

Supply-side effects on current account performance

Free-market supply-side: tax cuts, privatisation, deregulation

Interventionist supply-side: education, industrial policy, R&D

Micro side-effects of supply-side policy

Limits, trade-offs and time lags of supply-side approaches

Globalisation drivers: technology, trade, capital flows

Globalisation characteristics in modern economies

Effects of globalisation on developed economies

Effects of globalisation on developing economies

Multinational corporations: roles, benefits and risks

Absolute vs comparative advantage

Comparative advantage: simple numerical example

Gains from trade: specialisation, scale, competition

Costs of trade: adjustment, inequality, strategy

Why trade patterns change over time (UK focus)

Protectionism: tariffs, quotas and subsidies

Tariffs: effects on price, output and welfare (diagrams)

Why countries use protectionism and consequences

Customs unions: key features

Single European Market: key characteristics

WTO: role in trade rules and disputes

Balance of payments: current, capital, financial accounts

Current account: goods, services, primary, secondary income

Deficit vs surplus: interpretation

Current account determinants: productivity, prices, exchange rate

Investment flows: FDI vs portfolio investment

Policies to correct imbalances: switching vs reducing

External-balance policy trade-offs with other objectives

Floating exchange rates: supply, demand, determinants

Government intervention in FX markets: how and why

Fixed vs floating exchange rates: pros and cons

Currency unions (eurozone): benefits and costs

Economic growth vs economic development

Less-developed economies: characteristics

Development indicators: HDI and beyond

Growth and development factors: investment and human capital

Barriers to development: institutions, infrastructure, rights

Development policies: market vs interventionist strategies

Aid and trade: roles, limits and evaluation

Linking micro and macro: markets into AD/AS outcomes

Choosing the right model and stating assumptions

Using extracts/data to build a chain of reasoning

Evaluation: short vs long run, stakeholders, efficiency vs equity

Balanced conclusions with judgement and conditions

Case study skills: evidence selection and precise theory use

MCQ skills: isolate concepts and eliminate distractors

Diagrams in context: accurate labels and narratives

Synoptic contexts: environment, inequality, housing, labour

Synoptic contexts: instability, global shocks, trade policy

Ratios and fractions in economic data

Percentages and percentage change: real vs nominal

Mean, median and quantiles

Choosing the right graph for data

Interpreting line, bar, pie and scatter charts

Index numbers: base years and weights

Costs, revenues and profits calculations

Elasticity calculations and interpretation

Converting money to real terms

Interpreting mixed written, numerical and graphical evidence