Year 13 Economics

Analysis of production costs, revenue streams, and the primary objective of profit maximization versus alternative goals.

Detailed exploration of different cost curves (fixed, variable, marginal, average) and their application to short-run production decisions.

Examination of long-run cost curves, economies and diseconomies of scale, and the concept of the minimum efficient scale.

Exploration of total, average, and marginal revenue curves and their application to determining the profit-maximizing output level (MR=MC).

Investigation into objectives beyond profit maximization, such as sales maximization, growth maximization, and satisficing, and their implications.

Examination of the assumptions and characteristics of perfectly competitive markets and their implications for firms and consumers.

Analysis of how firms achieve short-run profit or loss and how entry/exit leads to long-run normal profit in perfect competition.

A detailed study of monopoly market structures, including sources of monopoly power, pricing strategies, and efficiency implications.

Exploration of different degrees of price discrimination, its conditions, and its impact on consumer surplus and producer revenue.

Exploration of market structures with many firms offering differentiated products, focusing on short-run profits and long-run zero economic profit.

Exploring strategic interdependence and the behavior of firms in concentrated markets, including characteristics and examples.

Analysis of the kinked demand curve model to explain price rigidity in oligopolies and the various forms and challenges of collusive behavior.

Application of game theory concepts, such as the Prisoner's Dilemma, to understand strategic decision-making and outcomes in oligopolistic markets.

Examination of the theory of contestable markets and its implications for market power, even in concentrated industries.

Introduction to market failure, focusing on positive and negative externalities in production and consumption, and their welfare implications.

Exploration of public goods (non-rivalrous, non-excludable) and the free-rider problem, alongside the concept of information asymmetry and its market consequences.

Analysis of merit goods (under-consumed) and demerit goods (over-consumed) due to imperfect information and their implications for social welfare.

Analysis of various government interventions to correct market failures, including taxes, subsidies, regulation, and direct provision.

Examination of situations where government intervention leads to a misallocation of resources, including unintended consequences and information problems.

Overview of competition policy, including mergers, anti-competitive practices, and the role of regulatory bodies in promoting market efficiency.

Investigating the factors that determine the demand for labor, focusing on marginal revenue product and derived demand.

Exploring the factors influencing the supply of labor, including wage rates, non-wage factors, and the backward-bending supply curve.

Analysis of how the interaction of demand and supply for labor determines equilibrium wages and employment levels in perfectly competitive markets.

Exploring the reasons for wage differentials, including human capital, compensating differentials, and the impact of education and training.

Investigation into various forms of labor market discrimination (gender, ethnic, age) and their economic consequences for individuals and society.

Assessing the economic effects of minimum wage legislation and the concept of a national living wage on employment, poverty, and business costs.

Understanding the concept of a monopsony employer and its impact on wages and employment levels compared to competitive labor markets.

Evaluating the role of organized labor in modern economies, including their objectives, methods, and impact on wages and working conditions.

Detailed examination of the collective bargaining process, its outcomes, and the economic consequences of industrial action (strikes, lockouts).

Distinguishing between absolute and relative poverty and assessing various measures of income and wealth inequality, such as the Lorenz curve and Gini coefficient.

Investigation into the underlying causes of poverty and income/wealth inequality, including education, health, globalization, and technological change.

Assessment of various government policies aimed at reducing poverty and inequality, including progressive taxation, welfare benefits, and education spending.

Introduction to the main macroeconomic objectives: economic growth, low unemployment, low inflation, and a stable balance of payments.

Analysis of the aggregate demand (AD) and aggregate supply (AS) model to explain macroeconomic equilibrium, inflation, and unemployment.

Understanding the different phases of the business cycle (boom, recession, trough, recovery) and their impact on macroeconomic variables.

Detailed look at central bank operations, including its independence, role in setting interest rates, and maintaining financial stability.

Examination of how changes in interest rates affect consumption, investment, exchange rates, and aggregate demand.

Understanding the mechanisms and objectives of quantitative easing (QE) and other unconventional monetary policies, especially during economic crises.

Analyzing the components of government spending and different types of taxation (direct, indirect, progressive, regressive) and their economic effects.

Examination of discretionary fiscal policy (changes in spending/taxation) and automatic stabilizers (e.g., unemployment benefits) in managing economic fluctuations.

Analyzing the long-term implications of budget deficits and national debt, including crowding out, intergenerational equity, and sustainability.

Examination of policies designed to increase the productive capacity of the economy, categorizing them into market-based and interventionist approaches.

Assessing the effectiveness, time lags, and potential conflicts of supply-side policies in achieving macroeconomic objectives.

Exploring the potential conflicts and complementarities between different macroeconomic policies (monetary, fiscal, supply-side) and objectives.

Analysis of the theories of absolute and comparative advantage as the basis for international trade and specialization.

Detailed examination of the various arguments for trade barriers, including infant industries, national security, and dumping.

Examination of the arguments against trade barriers, focusing on efficiency losses, higher prices, and reduced consumer choice.

Understanding different forms of trade protection, such as tariffs, quotas, subsidies, and non-tariff barriers, and their economic effects.

Exploration of regional trading blocs (e.g., EU, NAFTA) and the role of the World Trade Organization (WTO) in promoting and regulating international trade.

Understanding the factors that influence the demand for and supply of a currency in the foreign exchange market, leading to appreciation or depreciation.

Evaluating the advantages and disadvantages of fixed, floating, and managed exchange rate regimes for macroeconomic stability and policy autonomy.

Analysis of how currency appreciation and depreciation affect a country's exports, imports, inflation, and economic growth.

Understanding the current account (trade in goods/services, income, transfers) and the financial account (FDI, portfolio investment) and their interrelationship.

Investigation into the causes of persistent current account deficits or surpluses and their macroeconomic implications for exchange rates, national debt, and policy choices.

Exploring the process of globalization, its drivers, and its economic impacts on trade, labor markets, and income distribution.

Analysis of the role of multinational corporations in the global economy, including their motivations, impacts on host countries, and ethical considerations.

Differentiating between economic growth (quantitative increase in output) and economic development (qualitative improvements in living standards).

Overview of the common characteristics of developing economies, including low incomes, high inequality, and dependence on primary sectors.

Moving beyond GDP to explore the Human Development Index (HDI) and other qualitative measures of development, such as education and health indicators.

Identification and analysis of key internal barriers to development, including institutional weaknesses, corruption, capital flight, and inadequate infrastructure.

Examination of external barriers to development, such as adverse terms of trade, debt burdens, and limited access to global markets.

Comparing outward-looking strategies for economic progress, such as export-led growth, trade liberalization, and foreign direct investment.

Examination of inward-looking strategies, including import substitution, state-led industrialization, and the role of infrastructure development.

Assessing the impact of international organizations like the IMF and World Bank on economic development, including their policies and conditionalities.

Assessing the impact of bilateral, multilateral, and humanitarian aid on long-term growth, distinguishing between different forms of aid.

Evaluating the effectiveness of foreign aid in promoting development, considering issues like dependency, corruption, and aid effectiveness.

Exploring the functions of financial markets, including facilitating saving, investment, and risk management, and their role in economic growth.

Overview of different financial institutions, including commercial banks, investment banks, insurance companies, and pension funds, and their specific roles.

Understanding the need for systemic oversight in the financial sector, including prudential regulation, consumer protection, and crisis management.

Analyzing how individuals make decisions about saving, borrowing, and investment over their lifetime, considering factors like interest rates and future expectations.

Understanding the relationship between risk and return in various investment assets (stocks, bonds, property) and strategies for managing investment risk.

Applying psychological insights to explain why consumers and investors often act irrationally, focusing on cognitive biases and heuristics.

Exploring how insights from behavioral economics can be used to design 'nudges' and choice architecture to influence economic decisions for better outcomes.