Your journey to excellence in
By Revision Genie
Nature of economics as a social science
Unit 1
Theme 1: Introduction to markets and market failure
Unit 2
Thinking like an economist: models and assumptions
Using ceteris paribus in economic models
Why economists can’t run true scientific experiments
Positive statements
Value judgements in economic decision-making
Scarcity, choice and the economic problem
Renewable vs non-renewable resources
Opportunity cost for consumers, firms and government
Reading a production possibility frontier (PPF)
Opportunity cost on a PPF using marginal analysis
Economic growth and decline on a PPF
Efficiency vs inefficiency on a PPF
Movements along vs shifts of a PPF
Capital goods vs consumer goods on a PPF
Specialisation and division of labour (Adam Smith)
Pros and cons of specialisation in production
Specialisation for trade: pros and cons
The functions of money
Free market, mixed and command economies
Hayek, Smith and Marx: different views of the economy
Pros and cons of free markets
Pros and cons of command economies
The role of the state in a mixed economy
Unit 3
How markets work
Rational decision-making: utility maximisation
Rational decision-making: profit maximisation
Demand: movements along vs shifts
Conditions of demand (causes of demand shifts)
Diminishing marginal utility and the demand curve
Supply: movements along vs shifts
Conditions of supply (causes of supply shifts)
Price, income and cross elasticity: what they measure
Calculating price elasticity of demand (PED)
Interpreting PED values (elastic/inelastic/unitary/perfect)
Factors affecting PED
PED and total revenue (including calculations)
Calculating income elasticity of demand (YED)
Interpreting YED values (inferior/normal/luxury)
Calculating cross elasticity of demand (XED)
Interpreting XED values (substitutes/complements/unrelated)
Elasticity of supply: what it measures
Calculating price elasticity of supply (PES)
Interpreting PES values (elastic/inelastic/perfect)
Factors affecting PES
Short run vs long run and elasticity of supply
Equilibrium price and equilibrium quantity
Excess demand and excess supply on diagrams
How market forces restore equilibrium
Shifts in supply/demand and new equilibria (real contexts)
Price mechanism: rationing function
Price mechanism: incentive function
Price mechanism: signalling function
Price mechanism in local, national and global markets
Consumer surplus on a supply and demand diagram
Producer surplus on a supply and demand diagram
How shifts change consumer and producer surplus
Indirect taxes: impact on consumers, firms and government
Tax incidence and elasticity (who bears the burden?)
Subsidies: impact on consumers, firms and government
Showing producer subsidy and consumer subsidy on diagrams
Behavioural economics: why consumers aren’t always rational
Social influence on consumer choices
Habitual behaviour and demand
Consumer weakness at computation
Unit 4
Market failure
What market failure means
Externalities: private vs external vs social costs
Externalities: private vs external vs social benefits
Negative production externalities diagram (MSC/MSB approach)
Welfare loss from negative production externalities
Positive consumption externalities diagram
Welfare gain from positive consumption externalities
Externalities: impacts on different economic agents
Public goods vs private goods (non-rivalry/non-excludability)
The free rider problem
Information gaps and misallocation of resources
Symmetric vs asymmetric information
Unit 5
Government intervention
Why governments intervene (fixing market failure)
Indirect taxation: specific vs ad valorem
Using tax diagrams to show welfare effects
Subsidies as a policy tool (diagram + evaluation)
Minimum prices: impacts and evaluation
Tradeable pollution permits: how they work
State provision of public goods
Provision of information (e.g. labelling, campaigns)
Regulation: pros and cons
What government failure means (net welfare loss)
Government failure: distorted price signals
Government failure: unintended consequences
Government failure: admin costs
Government failure: information gaps
Unit 6
Theme 2: The UK economy – performance and policies
Unit 7
Measures of economic performance
Real GDP growth as a measure of economic growth
Real vs nominal (and why it matters)
Total vs per capita and volume measures
Gross National Income (GNI)
Comparing countries and time
Purchasing Power Parities (PPPs) in comparisons
Limits of GDP for living standards comparisons
National wellbeing and “happiness” measures
Inflation vs deflation vs disinflation
Calculating inflation using CPI
Limitations of CPI
RPI as an alternative and why it differs
Causes of inflation: demand-pull
Causes of inflation: cost-push
Causes of inflation: money supply growth
Effects of inflation on consumers
Effects of inflation on firms
Effects of inflation on government
Effects of inflation on workers
Unemployment measures: claimant count
Unemployment measures: ILO/Labour Force Survey
Unemployment vs under-employment
Employment, unemployment and inactivity rates
Structural unemployment
Frictional unemployment
Seasonal unemployment
Cyclical/demand-deficient unemployment
Real wage inflexibility and unemployment
Migration, skills and labour market outcomes
Effects of unemployment on consumers
Effects of unemployment on firms
Effects of unemployment on workers and society
Components of the balance of payments (current account focus)
Balance of trade in goods vs services
Current account deficits vs surpluses
Current account imbalances and macro objectives
Interconnectedness through international trade
Unit 8
Aggregate demand
Components of AD: C + I + G + (X − M)
Relative importance of AD components
The AD curve
Movement along AD vs shift of AD
Disposable income and consumption
The savings–consumption relationship
Consumer confidence and consumption
Wealth effects and consumption
Gross vs net investment
Growth expectations and investment
Business confidence and investment
Keynes’ “animal spirits”
Exports and investment
Interest rates and investment
Access to credit and investment
Regulation/government influence on investment
The trade cycle and government spending
Fiscal policy and government spending
Real income and net trade
Exchange rates and net trade
World economy and net trade
Protectionism and net trade
Non-price competitiveness and net trade
Unit 9
Aggregate supply
The AS curve
Movement along AS vs shift of AS
Short-run AS vs long-run AS
Short-run AS: raw material and energy costs
Short-run AS: exchange rate changes
Short-run AS: tax rate changes
Long-run AS: Keynesian shape
Long-run AS: classical shape
Long-run AS: technology and productivity
Long-run AS: education and skills
Long-run AS: regulation and business environment
Long-run AS: demographics and migration
Long-run AS: competition policy
Unit 10
National income
The circular flow of income model
Income vs wealth
Injections into the circular flow
Withdrawals from the circular flow
What equilibrium national output means
AD/AS shifts and equilibrium output
The multiplier: what it is
The multiplier process step-by-step
Effects of the multiplier on the economy
MPC, MPS, MPT and MPM
Calculating the multiplier using 1/(1−MPC)
Calculating the multiplier using 1/MPW
Why the multiplier matters for AD changes
Unit 11
Economic growth
Sources of economic growth
Actual vs potential growth
Export-led growth and trade
Trend growth vs actual growth rates
Positive vs negative output gaps
Why output gaps are hard to measure
The LRAS curve and growth
The trade (business) cycle
Boom characteristics
Recession characteristics
Benefits of growth for consumers
Benefits of growth for firms and government
Costs of growth (short and long run)
Growth and current vs future living standards
Unit 12
Macroeconomic objectives and policies
The main macroeconomic objectives (overview)
Economic growth as an objective
Low unemployment as an objective
Low and stable inflation as an objective
Current account balance as an objective
Balanced government budget as an objective
Environmental protection as an objective
Greater income equality as an objective
Monetary policy vs fiscal policy
Interest rates as a monetary policy tool
Quantitative easing (asset purchases)
Government spending and taxation as fiscal tools
Budget deficit vs budget surplus
Direct vs indirect taxes (examples and impacts)
Using AD/AS to show demand-side policy
Bank of England: role and purpose
Monetary Policy Committee: how it operates
Demand-side policy in the Great Depression (overview)
Demand-side policy in the 2008 financial crisis (UK vs US)
Strengths and weaknesses of demand-side policy
Market-based vs interventionist supply-side policy
Supply-side: incentives and entrepreneurship
Supply-side: competition and contestability
Supply-side: labour market reforms
Supply-side: skills and human capital
Supply-side: infrastructure
Using AD/AS to show supply-side policy effects
Strengths and weaknesses of supply-side policy
Trade-offs between macro objectives
The short-run Phillips curve
Policy conflicts and trade-offs in practice
Unit 13
Theme 3: Business behaviour and the labour market
Unit 14
Business growth
Why some firms stay small
Why firms grow: incentives and market opportunities
Divorce of ownership and control
The principal-agent problem
Public vs private sector organisations
Profit vs non-profit objectives
Organic growth: what it is
Vertical integration: forward vs backward
Horizontal integration
Conglomerate integration
Pros and cons of organic growth
Pros and cons of vertical integration
Pros and cons of horizontal integration
Pros and cons of conglomerate integration
Constraints on growth: market size
Constraints on growth: access to finance
Constraints on growth: owner objectives
Constraints on growth: regulation
Why firms demerge
Impacts of demergers (firms, workers, consumers)
Unit 15
Business objectives
Profit maximisation as an objective (why firms choose it)
Revenue maximisation as an objective
Sales maximisation as an objective
Satisficing as an objective
Profit maximisation on diagrams
Revenue maximisation on diagrams and formulae
Sales maximisation on diagrams and formulae
Unit 16
Revenues, costs and profits
Total, average and marginal revenue (definitions)
Calculating and linking TR, AR and MR
PED and revenue (linking elasticity to TR changes)
Total, fixed and variable costs (definitions)
AC, MC, AFC and AVC (calculations)
Marginal cost (definition and calculation)
Deriving SR cost curves from diminishing marginal productivity
Short-run vs long-run average costs
Internal economies of scale (types)
External economies of scale (types)
Diseconomies of scale (types)
Minimum efficient scale
Condition for profit maximisation (MR = MC)
Normal vs supernormal profit vs losses
Shutdown points in the short run and long run (diagrams)
Unit 17
Market structures
Allocative efficiency (what it means in markets)
Productive efficiency (what it means in markets)
Dynamic efficiency (innovation and investment)
X-inefficiency and its causes
Comparing efficiency across market structures
Perfect competition: key characteristics
Perfect competition: short-run equilibrium (diagram)
Perfect competition: long-run equilibrium (diagram)
Monopolistic competition: key characteristics
Monopolistic competition: short-run equilibrium (diagram)
Monopolistic competition: long-run equilibrium (diagram)
Oligopoly: key characteristics
Concentration ratios: calculating n-firm ratios
What concentration ratios tell us
Collusion vs competition in oligopoly
Overt vs tacit collusion
Cartels and price leadership
Game theory: prisoner’s dilemma (simple model)
Price wars in oligopoly
Predatory pricing
Limit pricing
Non-price competition methods
Monopoly: key characteristics
Monopoly: profit-maximising equilibrium (diagram)
Third-degree price discrimination: conditions
Third-degree price discrimination: diagram and outcomes
Price discrimination: winners and losers
Monopoly: costs and benefits (stakeholders)
Natural monopoly and why it occurs
Monopsony: conditions and characteristics
Monopsony: costs and benefits (stakeholders)
Contestable markets: defining features
Contestability and firm behaviour
Barriers to entry and barriers to exit
Sunk costs and contestability
Unit 18
Labour market
Demand for labour: key influences
Derived demand for labour
Supply of labour: key influences
Labour market failure: occupational immobility
Labour market failure: geographical immobility
Competitive equilibrium (diagram)
Non-competitive labour markets (overview)
Current labour market issues (using real examples)
Minimum wages: impacts and evaluation
Maximum wages: impacts and evaluation
Public sector wage setting
Policies to reduce labour immobility
Elasticity of demand for labour (why it matters)
Elasticity of supply of labour (why it matters)
Unit 19
Controlling mergers: reasons and methods
Regulating monopolies: price regulation
Regulating monopolies: profit regulation
Regulating monopolies: quality standards and targets
Promoting competition and small business
Deregulation: aims and risks
Competitive tendering for public contracts
Privatisation: aims and outcomes
Protecting suppliers and employees: limiting monopsony power
Nationalisation: aims and outcomes
Impacts of intervention on prices
Impacts of intervention on profits
Impacts of intervention on efficiency
Impacts of intervention on quality
Impacts of intervention on choice
Limits of intervention: regulatory capture
Limits of intervention: asymmetric information
Unit 20
Theme 4: A global perspective
Unit 21
International economics
What globalisation looks like in practice
Drivers of globalisation over the last 50 years
Globalisation: impacts on governments
Globalisation: impacts on producers and consumers
Globalisation: impacts on workers
Globalisation: impacts on the environment
Absolute advantage (with simple calculations)
Comparative advantage: assumptions and limits
Comparative advantage using numbers
Comparative advantage using diagrams
Pros and cons of specialisation and trade
What shapes trade patterns between countries
Emerging economies and shifting trade flows
Trading blocs and bilateral agreements
Exchange rates and trade flows
Calculating terms of trade
Factors that change terms of trade
Effects of improving/worsening terms of trade
Free trade areas vs customs unions vs common markets
Monetary unions and the Eurozone: conditions for success
Costs and benefits of regional trade agreements
The WTO and trade liberalisation
Regional trade deals vs WTO: potential conflicts
Why countries restrict free trade
Tariffs: impacts and evaluation
Quotas: impacts and evaluation
Subsidies to domestic producers: impacts and evaluation
Non-tariff barriers: impacts and evaluation
Protectionism and living standards/equality effects
Balance of payments: current, capital and financial accounts
Causes of current account deficits
Causes of current account surpluses
Policies to reduce current account imbalances
Global trade imbalances and their significance
Exchange rate systems: floating, fixed, managed
Appreciation vs revaluation
Depreciation vs devaluation
Factors affecting floating exchange rates
How governments intervene in FX markets
Competitive devaluation/depreciation and consequences
Exchange rates and the current account (Marshall–Lerner)
The J-curve effect
Exchange rates and growth/employment
Exchange rates and inflation
Exchange rates and FDI flows
International competitiveness: key measures
Relative unit labour costs and competitiveness
Relative export prices and competitiveness
Factors that influence competitiveness
Benefits of being competitive internationally
Problems of being uncompetitive internationally
Unit 22
Poverty and inequality
Absolute poverty vs relative poverty
Measuring absolute poverty
Measuring relative poverty
Why poverty measures change over time
Wealth inequality vs income inequality
The Lorenz curve (interpretation)
The Gini coefficient (what it shows)
Causes of inequality within countries
Causes of inequality between countries
Development and inequality: how they interact
Capitalism and inequality (arguments for and against)
Unit 23
Emerging and developing economies
The three dimensions of the HDI
How HDI components are measured and combined
Strengths of HDI for comparing development
Limitations of HDI
Other development indicators (overview)
Primary product dependency and development
Commodity price volatility and development
The savings gap and the Harrod–Domar model
The foreign currency gap
Capital flight and development
Demographic factors and development
Debt and development
Access to credit and banking
Infrastructure and growth
Education/skills and human capital
Property rights and investment incentives
Non-economic factors shaping development
Trade liberalisation as a development strategy
Promoting FDI as a development strategy
Removing subsidies: winners and losers
Floating exchange rates as a strategy
Microfinance schemes: aims and limits
Privatisation as a development strategy
Human capital investment as a strategy
Protectionism for development: pros and cons
Managed exchange rates for development
Infrastructure-led development strategies
Joint ventures with global companies
Buffer stock schemes
Industrialisation and the Lewis model
Tourism-led development
Developing primary industries
Fairtrade schemes: aims and evaluation
Aid: types and effectiveness
Debt relief: pros, cons and conditions
The World Bank: role in development
The IMF: role in development
NGOs: roles and limitations
Unit 24
The financial sector
Why financial markets matter for saving
Financial markets and lending to households/firms
Financial markets and facilitating transactions
Forward markets in currencies and commodities
Financial securities and annuities
Financial market failure: asymmetric information
Financial market failure: externalities
Financial market failure: moral hazard
Financial market failure: speculation and bubbles
Financial market failure: market rigging
Central banks and monetary policy
Central banks as banker to the government
Central banks as lender of last resort
Central banks and banking regulation
Unit 25
Role of the state in the macroeconomy
Capital vs current public spending vs transfer payments
Why public spending size and composition changes
Public spending and productivity and growth
Public spending and living standards
Crowding out: when and why it happens
Public spending and the tax burden
Public spending and equality
Progressive vs proportional vs regressive taxes
Direct vs indirect tax changes and work incentives
The Laffer curve and tax revenues
Taxes and income distribution
Taxes and real output/employment
Taxes and the price level
Taxes and the trade balance
Taxes and FDI flows
Automatic stabilisers vs discretionary fiscal policy
Fiscal deficit vs national debt
Structural vs cyclical deficits
What drives fiscal deficits
What drives national debt
Why deficits and debt levels matter
Global macro policy mixes (fiscal/monetary/ER/supply-side/controls)
Policies to reduce fiscal deficits and debt (global examples)
Policies to reduce poverty and inequality (global examples)
Monetary policy differences across countries
Policies to raise international competitiveness
Responding to external shocks (policy options)
Regulating transfer pricing (global companies)
Limits on controlling global companies
Policymaking with imperfect information
Policymaking under risk and uncertainty
Policy limits when shocks are external
Unit 26
Quantitative skills (used throughout all themes)
Ratios and fractions in economic contexts
Percentages, percentage changes and percentage point changes
Mean, median and relevant quantiles
Constructing and interpreting graphs
Calculating and interpreting index numbers
Cost, revenue and profit calculations (marginal/average/total)
Converting money values into real terms
Calculating and interpreting elasticity values
Interpreting written, graphical, tabular and numerical information
Level vs rate of change
Composite indicators (what they are and how to use them)
Seasonally adjusted figures (what they mean)
Let's master Economics together!Let's master Economics together!Let's master Economics together!