NOTES OF GUIDANCE
8819 H1 ECONOMICS (2014)
FIRST YEAR OF EXAMINATION 2009
The syllabus is intended to provide the basis for a broad understanding of economics. Specifically, the syllabus aims to develop in candidates:
an understanding of fundamental economic principles, theories and concepts, and of the methods of analysis used by an economist;
the ability to use the tools of economic reasoning to explain, analyse and resolve economic issues, and evaluate policy decisions;
the habit of reading critically, from a variety of sources, to gain information about the changing economic activities and policies at the national and international levels;
the ability to use evidence in making rational arguments in economic context and understand the roles of various economic agents.
Candidates are expected to demonstrate:
the main concepts, principles and theories employed within the field of economics 2.
methods of analysis in economics
understand and interpret economic information presented in textual, numerical or graphical form 4.
select and apply economic concepts and principles to explain and analyse contemporary events at the micro and macro levels
recognise unstated assumptions
make interpretations and valid inferences from information presented and evaluate the reliability of information given
evaluate alternative theoretical explanations and perspectives of economic problems, issues and policy decisions
organise and communicate economic ideas and arguments in a clear, logical and appropriate form
The theme for the H1 syllabus is Markets and Governments. The emphasis of the syllabus is on the application of economic concepts and principles to explain, analyse and evaluate economic situations and policy decisions in a real-world context. 1. Microeconomics
This section provides an introduction to the basic terminology and concepts of economics. It enables candidates to consider what markets and governments can and cannot do. It provides candidates with the opportunity to explain economic phenomena through the use of diagrams, data analysis and the evaluation of economic materials. It is intended to make candidates aware of the role of economics in real-world situations. It is expected that these concepts and principles are applied throughout the syllabus.
Candidates should be able to:
1.1 How the Microeconomy Works
Central Economic Problem
- The rationale for resource allocation: scarcity
and the inevitability of choice
Explain the central economic problem
Illustrate the concepts of scarcity, choice and opportunity cost, and the nature of trade-offs through the use of examples and production possibility curves
Price as a rationing and allocative mechanism
Explain how the price mechanism allocates scarce resources among competing needs in a free market
[A broad understanding of the concept of economic efficiency is required. Diagrammatic and/or mathematical explanation is not required.]
Demand, Supply and the Market
- The individual and market demand curves as
representations of intentions to consume
Explain that demand reflects consumers’ satisfaction and recognise the inverse relationship between price and quantity demanded
- The firm and market supply curves as
representations of intentions to supply
Explain that supply reflects opportunity costs and recognise the direct relationship between price and quantity supplied
- Changes in demand and supply
Discuss the factors affecting demand and supply and the implications of the ceteris paribus condition
- Shifts vs movements in...