Head of Department – Mrs L Wills
English – Grade 6 Mathematics – Grade 6
Examination Board: Pearson Edexcel Level 3 Advanced GCE in Economics A
Introduction/General Advice and Requirements
“Economics is, in essence, solving the problem of the world’s infinite wants with the finite resources available”. In Western economies like the UK this problem is solved through the laws of Supply and Demand. Private firms competing for profits will provide what consumers want and shortages are rationed through prices. A-level Economics will look into how resources are allocated applying theoretical models to real-world situations, and discuss the problems which arise from this.
Economics is an extremely rigorous and demanding A level and students should be prepared to feel significantly challenged by the content. Students are expected to be aware of, and up to date with, current affairs.
Course Content & Assessment
Theme 1: Introduction to Markets and Market Failure
This theme is one of two in this qualification that focuses on microeconomics. This theme introduces students to the microeconomic nature of economics, looking at economic problems and the ways economists think and work. In this theme students will consider how markets work, looking at how supply and demand interact to allocate resources in local, national and international markets. They will learn how to apply supply and demand analysis to real-world situations and be able to offer explanations of consumer behaviour. This will involve looking at both how consumers act in a rational way to maximise utility and how firms maximise profit, but also why consumers may not behave rationally. Having investigated how markets work, students will then look at market failure. They will look at the nature and causes of market failure before considering the strengths and weaknesses of possible government intervention to remedy market failures.
Theme 2: The UK Economy – Performance and Policies
This theme is one of two in this qualification that focuses on macroeconomics. This theme introduces the key measures of economic performance and the main instruments of economic policy primarily in a UK context. Students will be introduced to the aggregate demand/aggregate supply model so that they can use it to analyse changes in real output and the price level. They will examine the use of demand-side policies, supply-side policies and direct controls as means of improving an economy’s performance; recognise the underlying assumptions; predict the likely impact and effectiveness of such policies, and consider these in an historical context.
Theme 3: Business Behaviour and the Labour Market
This theme builds on the content of Theme 1 and focuses on business economics. This theme examines how the number and size of market participants, and the level of contestability, affect the pricing and nature of competition among firms. Students will consider the size and growth of firms through exploring organic growth, mergers and takeovers. They will look at the reasons for demergers and why some firms tend to remain small. Students will look at the rational assumption that firms are profit maximisers and then challenge this by looking at alternative business objectives. Revenues, costs and profits are explored before linking these ideas to different market structures.
Students will then be able to analyse and evaluate the pricing and output decisions of firms in different contexts and understand the role of competition in business decision making. Supply and demand analysis is specifically applied to the labour market to see how wages are determined in competitive and non-competitive markets.
Theme 4: A Global Perspective
This theme builds on the knowledge and skills gained in Theme 2 and applies them in a global context. Students will be expected to understand the significance of globalisation, international trade, the balance of payments and exchange rates. They will examine public finance, macroeconomic policies and the role of the financial sector in a global context. Students will consider the factors influencing the growth and development of emerging and developing countries. In examining these areas, application, analysis and evaluation of economic models is required as well as an ability to assess policies that might be used to address national and global economic challenges. Students should develop an awareness of trends in the global economy over the last 25 years through wider reading and research so that they can include relevant examples in their analysis and evaluation.
Paper 1: Markets and business behaviour (2 hours; 35%)
Paper 1 will assess microeconomics and questions will be drawn from Themes 1 and 3.
Paper 2: The national and global economy (2 hours; 35%)
Paper 2 will assess macroeconomics and questions will be drawn from Themes 2 and 4.
Paper 3: Investigating business in a competitive environment (2 hours; 30%)
Paper 3 will assess content across all four themes. Students are required to apply their knowledge and understanding, make connections and transfer higher-order skills across all four themes.
We aim to enrich Economics students with (where possible) industrial visits, Student Investor Challenge, guest speakers, and other in-house and public competitions such as the Bank of England Challenge.
Economics opens up many doors, some specific and some more general. Specific vocations include economic consulting and analysis for private firms or governments, the legal profession, banking, finance and teaching. More generic vocations such as corporate management, tax advice, market research, human resources and journalism all recognise and value studies in Economics.