Singapore–Cambridge General Certificate of Education

Advanced Level Higher 1 (2024)

Economics
(Syllabus 8843)

© MOE & UCLES 2022

 8843 ECONOMICS GCE ADVANCED LEVEL H1 SYLLABUS

CONTENTS
Page
INTRODUCTION 3
AIMS 4
ASSESSMENT OBJECTIVES 5
SCHEME OF ASSESSMENT 5
DESCRIPTION OF COMPONENTS 6
USE OF CALCULATORS 6
SYLLABUS CONTENT 7

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 8843 ECONOMICS GCE ADVANCED LEVEL H1 SYLLABUS

INTRODUCTION
Desired Outcomes of Education and Learning of Economics in Singapore

The Desired Outcomes of Education (DOE) are attributes that educators aspire for every Singaporean to have
by the completion of his formal education. The person who is schooled in the Singapore Education system
embodies the Desired Outcomes of Education. In sum, he is

• a confident person who has a strong sense of right and wrong, is adaptable and resilient, knows himself,
is discerning in judgment, thinks independently and critically, and communicates effectively
• a self-directed learner who takes responsibility for his own learning, who questions, reflects and
perseveres in the pursuit of learning
• an active contributor who is able to work effectively in teams, exercises initiative, takes calculated risks, is
innovative and strives for excellence; and,
• a concerned citizen who is rooted to Singapore, has a strong civic consciousness, is informed, and takes
an active role in bettering the lives of others around him.

The value of learning Economics is aligned with the Desired Outcomes of Education and 21st Century
Competencies (21CC). Through the inquiry of economic issues and application of concepts, theories and
principles, students develop the capacity to analyse and evaluate the behaviour of economic agents in the
allocation of scarce resources. In understanding domestic, regional and global economic issues, students adopt
multiple perspectives, recognise trade-offs and consequences arising from decision-making and arrive at well-
reasoned decisions. Students thus acquire knowledge and develop skills and values that will enable them to be
active contributors and concerned citizens.

Economics curriculum shape and decision-making approach in Economics

Economics Curriculum Shape Decision-making Approach in Economics

Economics Curriculum Shape

The Economics Curriculum Shape sets the direction for and encapsulates the concept of learning A-Level
Economics in Singapore. At the core of the curriculum shape is the Decision-Making Approach in Economics
which guides disciplinary thinking in A-Level Economics. This approach emphasises Sound Reasoning and
Decision-Making, which are components under the 21CC domain of Critical and Inventive Thinking. It enables
students to better analyse and evaluate how different economic agents make decisions based on the
fundamental disciplinary concepts of scarcity, choice and opportunity costs.

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The middle ring of the curriculum shape highlights that students learn knowledge, skills and values through
inquiry of domestic, regional and global economic issues. By applying the Decision-Making Approach in
Economics, students will be able to better analyse and understand the implications of policy decisions arising
from these issues.

The outer ring shows the Knowledge, Skills and Values learnt through the curriculum. The Knowledge segment
signifies that students will learn economic concepts, theories and principles, as well as tools of economic
analysis. The Skills segment represents inquiry, data and information, and economic analysis and evaluation
skills that students will develop. The Values segment highlights the values of responsibility, resilience and
empathy that students will develop through the learning of Economics. Focusing on these skills and values will
allow the Economics Curriculum to support the development of MOE’s 21CC.

Decision-Making Approach in Economics

In the light of the Central Economic Problem of scarcity, decision-making is fundamental. Scarcity leads to the
inevitability of choice and trade-offs. In the context of A-Level Economics, decision-making is framed as a
process where students analyse how decisions are made from the perspectives of different economic agents
(consumers, producers, governments), adjusting for dynamic changes where relevant. Students will consider
the benefits, costs, constraints, perspectives and other necessary information, while recognising the impact of
the intended and unintended consequences arising from the decisions made and the corresponding trade-offs.
Students will also recognise that decision-making by economic agents can have multifaceted implications,
where decisions made by an economic agent can have an impact on other economic agents.

AIMS
The syllabus is intended to provide the basis for a broad understanding of economics, within half the curriculum
time of the H2 Economics syllabus. Specifically, the syllabus aims to develop in candidates:

1 an understanding of fundamental economic concepts, theories and principles, and of the tools and
methods of analysis used by economists

2 the ability to use the tools and methods of economic reasoning to explain and analyse economic issues,
and to evaluate perspectives and decisions of economic agents

3 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; and

4 the ability to use evidence in making well-reasoned economic arguments to arrive at rational and
considered decisions.

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 8843 ECONOMICS GCE ADVANCED LEVEL H1 SYLLABUS

ASSESSMENT OBJECTIVES
Candidates are expected to:

AO1: Knowledge and Understanding

• Demonstrate knowledge and understanding of economic concepts, theories and principles.

AO2: Interpretation and Evaluation of Information

• Interpret economic information presented in textual, numerical or graphical form.

• Make valid inferences based on the information presented and its limitations.

AO3: Application and Analysis

• Apply relevant economic concepts, theories and principles to analyse contemporary issues, perspectives
and policy choices.

• Construct coherent economic arguments.

AO4: Evaluation
• Evaluate critically contemporary issues, perspectives and policy choices.

• Recognise unstated assumptions and evaluate their relevance.

• Synthesise economic arguments to arrive at well-reasoned judgements and decisions

SCHEME OF ASSESSMENT
The assessment comprises one compulsory written examination paper: Paper 1 (Case Studies).

Specification grid

H1 Description Overall Marks Duration

Economics (Weighting)

Paper 1 There will be two compulsory case studies. 80 marks 3 hours

Case Studies Candidates are required to answer all questions for each (100%)
case study.

Each case study carries 40 marks and constitutes 50%

of the total marks. About 16 marks of each set of case
study questions will be for data response questions, and
about 24 marks will be for higher-order questions.

For Paper 1, questions testing AO1 + AO2 + AO3 will comprise about 40% of the marks and questions testing
AO1 + AO2 + AO3 + AO4 will comprise about 60% of the marks.

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DESCRIPTION OF COMPONENTS
Paper 1 (Case Studies)

The paper will include two case studies. Each of these will consist of two to three pages of data presented in
textual, numerical or graphical form. Each case study will present contemporary multifaceted economic issues
or policies, which may be from one or more themes in the syllabus.

The data for each case study will be followed by seven to eight part-questions, including sub-parts. These
questions will require candidates to apply relevant economic concepts, theories and principles in analysing,
synthesising and evaluating economic issues, perspectives or policies, with reference to the data provided.

About 16 marks of each set of case study questions will be for data response questions, and about 24 marks
will be for higher-order questions.

USE OF CALCULATORS
The use of a calculator as approved by the Singapore Examinations and Assessment Board is allowed.

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SYLLABUS CONTENT
The syllabus content comprises three core themes:

• Theme 1: The Central Economic Problem

• Theme 2: Markets
• Theme 3: The National Economy

As an introduction to the study of Economics, candidates should have an awareness of the nature of Economics
as a social science (as compared to the natural sciences) and the differences between positive and normative
economics, microeconomics and macroeconomics.

Theme 1: The Central Economic Problem

Theme 1 introduces candidates to the Central Economic Problem of unlimited wants and limited resources.
The scarcity of resources necessitates choice and leads to decision-making. Through examining the concepts
of scarcity, choice and opportunity cost, candidates will be able to understand the Central Economic Problem
facing societies, and how economic agents (consumers, producers and governments) use available
information, and also consider benefits, costs, constraints and perspectives, to make decisions, which may
have intended and unintended consequences.

This theme provides the foundation for the study of microeconomic and macroeconomic topics in Markets
(Theme 2) and the National Economy (Theme 3) respectively, where the decision-making approach and
concepts of scarcity, choice and opportunity cost recur.

Theme 1.1 Scarcity as the Central Economic Problem

Economics Content

1.1.1 Scarcity, choice and resource allocation Additional information

a. The Central Economic Problem is scarcity, arising from limited

resources and unlimited wants

b. Scarcity implies that choices have to be made in the allocation of

resources between different uses

c. When choices are made, trade-offs and opportunity costs are

incurred

d. The concepts of scarcity, choice and opportunity cost can be

explained from the perspectives of different economic agents
(consumers, producers and governments)

e. Production Possibility Curve (PPC) can be used to illustrate scarcity,

choice, opportunity cost, productive efficiency, full employment,
unemployment or under-utilisation of economic resources and
changes in the productive capacity of an economy

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Theme 1.1 Scarcity as the Central Economic Problem (continued)

Economics Content (continued)

1.1.2 Decision-Making Process of Economic Agents Additional information

a. Objectives of rational economic agents: consumers aim to maximise A marginalist approach to

utility (satisfaction), producers aim to maximise profits and weighing costs and benefits is
governments aim to maximise social welfare expected.

b. In the pursuit of their objectives, economic agents gather An understanding of the concept
information, weigh benefits and costs, consider constraints and of cost-benefit analysis (CBA) as
perspectives before making decisions. They take into account the a project analysis tool is not
intended and unintended consequences, and any changes required.
occurring, before reviewing the decisions
An awareness of how consumers
allocate resources to maximise
utility and how producers
maximise profits will suffice.
Technical analyses of utility
maximisation and profit
maximisation are not required.

Concepts and Tools of Analysis

• Scarcity, choice and opportunity cost

• Production possibility curve (PPC)
• Marginalist principle

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Theme 2: Markets

In Theme 2, candidates examine how markets deal with the Central Economic Problem and how decisions
are made by economic agents in markets. Theme 2 aims to provide candidates with a microeconomic
analysis of how markets function and how markets may fail to achieve efficient and equitable outcomes.
Candidates will be able to understand how market forces of demand and supply interact to bring about
market equilibrium. In addition, candidates will be able to understand that while decisions made by
consumers and producers are necessary for the functioning of markets, these decisions may lead to
inefficient and inequitable outcomes. Candidates will be able to discuss how governments may intervene
through public policy measures to improve efficiency and equity while recognising limitations, unintended
consequences and possible trade-offs of government intervention. This theme provides candidates with
insights into real-world microeconomic issues and opportunities to deepen economic reasoning, analysis and
application of microeconomic concepts to markets in Singapore and the global economy.

Microeconomic concepts, theories and principles in Themes 1 and 2 provide the foundation for candidates to
extend their understanding of the micro-economy to the macro-economy in Theme 3.

Theme 2.1 Price Mechanism and its Applications

Economics Content

2.1.1 Price Mechanism and its Functions Additional information

a. How the price mechanism allocates scarce resources in the free

market through signalling, incentive and rationing functions

2.1.2 Demand and Supply Analysis and its Applications Additional information

a. Market demand as a summation of individual demand Application to real-world markets,

including the labour market, is
b. Market supply as a summation of individual supply required.

c. Changes in price of the good/service itself cause a movement along Theory of Marginal Revenue
the demand/supply curve Productivity (MRP) of Labour is
not required.
d. Changes in non-price determinants and how they cause shifts in the
demand/supply curve

e. The equilibrium market price and quantity are determined by the

interaction of demand and supply

f. Changes in demand and supply can affect equilibrium price and

quantity, consumer expenditure and producer revenue

g. These outcomes can be affected by price elasticities of demand and

supply

2.1.3 Government Intervention in Markets Additional information

a. Governments may intervene in markets in the form of taxes,

subsidies, price controls (maximum and minimum prices) and
quantity controls (quotas)

b. Government intervention in markets can affect the equilibrium price

and quantity, consumer expenditure and producer revenue

c. Impact of government intervention on markets may be affected by Knowledge of ‘incidence’ in

price elasticities of demand and supply relation to taxes and subsidies is
not required.

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Theme 2.1 Price Mechanism and its Applications (continued)

Concepts and Tools of Analysis

• Price mechanism
• Ceteris paribus
• Demand and its determinants
• Change in demand versus change in quantity demanded
• Supply and its determinants
• Change in supply versus change in quantity supplied
• Market equilibrium
– Equilibrium price and quantity
• Market disequilibrium
– Shortage and surplus
• Price elasticity of demand
• Price elasticity of supply
• Consumer expenditure and producer revenue
• Taxes and subsidies
• Price controls
– Maximum and minimum prices
• Quantity controls
– Quotas

Theme 2.2 Microeconomic Objectives and Policies

Economics Content

2.2.1 Governments’ Microeconomic Objectives Additional information

a. Governments’ microeconomic objectives are efficiency and equity

b. Efficiency in markets occurs when the social optimum is achieved,

where Marginal Social Benefit (MSB) = Marginal Social Cost (MSC),
maximising society’s welfare

c. Deadweight loss results when the social optimum is not achieved

• Deadweight loss can be explained as the reduction in net benefit
to society when output level is not at the social optimum

d. Efficient resource allocation may not result in equitable outcomes

e. Equity occurs when there is fairness in the distribution of essential Inequity is a distributional issue
goods and services and not considered a market
failure.

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Theme 2.2 Microeconomic Objectives and Policies (continued)

Economics Content (continued)

2.2.2 Market Failure and its Causes Additional information

a. Market failure occurs when the free market is unable to allocate

resources efficiently

b. Markets may fail in terms of

• non-provision of public goods due to non-rivalry and non- An awareness of non-rejectability
excludability as a characteristic of public goods
• non-socially optimal levels of goods and services due to the is required.
presence of externalities and/or information failure
Knowledge of asymmetric
information, adverse selection
and moral hazard, market
dominance and factor immobility
are not required.

A two-diagram approach will

suffice – showing that MSC is
higher than MPC for negative
externalities, and MSB is higher
than MPB for positive
externalities.

2.2.3 Microeconomic Policies Additional information

a. Microeconomic policy decisions undertaken by governments to Government intervention may not

achieve microeconomic objectives in relation to efficiency and equity always achieve efficiency and
equity. Government failure is not
b. Policy measures including taxes and subsidies, quotas and required.
tradeable permits, joint and direct provision, rules and regulations,
public education in achieving efficiency and equity

c. Effectiveness of policy measures in achieving efficiency and equity

Concepts and Tools of Analysis

• Allocative efficiency
• Equity
• Market failure
• Deadweight loss
• Marginal private benefit and cost
• Marginal external benefit and cost
• Marginal social benefit and cost
• Social versus private (market) optimum
• Public goods
– Non-excludability and non-rivalry
• Positive and negative externalities

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Theme 3: The National Economy

Theme 3 provides candidates with an overview of the workings and linkages of the national and international
economy. Candidates will use the concepts, theories and principles from Themes 1 and 2 to examine the
problem of scarcity of resources and the concept of trade-offs at the level of the national economy. In
particular, candidates will examine how governments make policy choices at the national level to improve
living standards. In doing so, candidates will discuss how governments consider competing needs, weigh
costs and benefits, recognise trade-offs and consequences to make policy decisions. Candidates will first
gain an understanding of aggregate demand and aggregate supply, before applying these concepts to
analyse macroeconomic issues and government decisions at the national level. Candidates will also examine
domestic and external factors that influence economic growth, price stability and employment, with a focus on
how these factors affect a country’s standard of living. In addition, candidates will also discuss the different
policy choices available to governments and their effectiveness in achieving higher living standards.

Theme 3.1 Introduction to Macroeconomic Analysis

Economics Content

3.1.1 Aggregate Demand and Aggregate Supply Addition information

a. Aggregate Demand (AD) and its components: consumption (C), An understanding that trade
investment (I), government spending (G) and net exports (X – M) affects standard of living
significantly in Singapore through
b. How AD is affected by changes in the determinants of C, I, G and its impact on aggregate demand
(X – M) and aggregate supply is required.

c. How Aggregate Supply (AS) is affected by its determinants A distinction between

autonomous and induced
d. How interaction of AD and AS determines equilibrium level of expenditure is not required.
national output and general price level
An awareness of an increase in
AD having a multiplied effect on
national income will suffice.

Knowledge of marginal
propensities (of consumption,
savings, taxes and imports) and
the multiplier formula is not
required.

Concepts and Tools of Analysis

• Aggregate demand
• Determinants of C, I, G and (X – M)
• Aggregate supply
• Determinants of aggregate supply
• National output
• General price level

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Theme 3.2 Macroeconomic Objectives and Policies

Economics Content

3.2.1 Standard of Living and Macroeconomics Indicators Additional information

a. Economies are primarily concerned with improving the standard of An understanding that economic
living growth, price stability and full
• Standard of living involves material and non-material aspects, employment, and therefore the
as measured by real national income per capita taking into standard of living of an economy
account other indicators including income distribution, leisure can be affected by changes in
time, quality of environment global economic conditions is
required.
b. Standard of living is affected by an economy’s ability to achieve
macroeconomic objectives in terms of sustainable and inclusive
economic growth, low unemployment and price stability

c. Macroeconomic indicators An understanding of nominal and

• Indicators of economic performance include real Gross real concepts is required. An
Domestic Product (GDP) or Gross National Income (GNI), understanding of how index
real GDP or GNI per capita, unemployment rate and numbers are interpreted, including
Consumer Price Index (CPI) the base year and use of weights,
is required. Calculation of index
• Human Development Index (HDI) as an indicator to reflect
numbers and national income is
standard of living
not required.
• Gini coefficient as an indicator to reflect income distribution
An understanding of the meaning
d. Comparison of living standards over time and over space (between
of the Gini coefficient (using the
economies)
Lorenz curve) and the variation of
the coefficient between 0 and 1 is
required.

Calculation of HDI and Gini

coefficient is not required.

3.2.2 Macroeconomic Issues Additional information

a. Macroeconomic issues and their causes

• Undesirable economic growth – persistently low or negative,
unsustainable, non-inclusive due to factors such as changes in
AD or AS, environmental degradation, inequitable income
distribution
• Unemployment – demand-deficient, structural, frictional due to
factors such as lack of AD, technological changes, mismatch
of skills, transition between jobs
• Price instability – demand-pull inflation, cost-push inflation,
deflation due to factors such as changes in AD, costs of
production, productive capacity

b. Consequences of undesirable economic growth, unemployment

and price instability on the standard of living and its implications for
economic agents

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Theme 3.2 Macroeconomic Objectives and Policies (continued)

Economics Content (continued)

3.2.3 Macroeconomic Policies Additional information

a. Macroeconomic policy decisions undertaken by governments to An understanding that

achieve macroeconomic objectives in relation to living standards governments around the world
focus on different macroeconomic
b. Policy measures and their effectiveness in achieving objectives, depending on the state
macroeconomic objectives: of the economy and the level of
• Fiscal policy development of the country, is
– How discretionary fiscal policy can influence the level of required.
economic activities and living standards through
government spending and taxation An awareness of the desirability
• Supply-side policies for a government to maintain
– How supply-side policies can improve quantity, quality fiscal sustainability over the long
and mobility of factors of production to increase the term is required.
productive capacity of an economy and hence affect living
standards An understanding of how transfer
• Monetary policy payments can improve income
– How monetary policy can influence the level of economic distribution and help achieve
activities and living standards through the management of inclusive growth is required.
exchange rates (case of Singapore) and interest rates

Concepts and Tools of Analysis

• Standard of living
– Material and non-material well-being
– Gross Domestic Product (GDP) and Gross National Income (GNI)
– Human Development Index (HDI)
– Income inequality
– Gini coefficient
• Economic growth
– Actual and potential growth
– Sustainable growth
– Inclusive growth
• Full employment and unemployment
– Demand-deficient unemployment
– Structural unemployment
– Frictional unemployment
• Price stability
– Demand-pull inflation
– Cost-push inflation
– Deflation
– Consumer Price Index (CPI)
• Nominal and real concepts
• Discretionary fiscal policy
– Government budget surplus and deficit
• Supply-side policies
• Monetary policy
– Interest rates
– Exchange rates

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