9708 - Scheme - of - Work (For Examination From 2023)

Scheme of Work
Cambridge International AS & A Level

Economics 9708
For examination from 2023
© Cambridge University Press & Assessment 2021 v2
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centre.
Contents
Introduction ................................................................................................................................................................................................................................................. 4
1. Basic economic ideas and resource allocation (AS Level) .................................................................................................................................................................... 8
2. The price system and the microeconomy (AS Level) .......................................................................................................................................................................... 15
3. Government microeconomic intervention (AS Level) ........................................................................................................................................................................... 24
4. The macroeconomy (AS Level) ............................................................................................................................................................................................................ 28
5. Government macroeconomic intervention (AS Level) ......................................................................................................................................................................... 35
6. International economic issues (AS Level) ............................................................................................................................................................................................ 39
7. The price system and the macroeconomy (A Level) ............................................................................................................................................................................ 46
8. Government microeconomic intervention (A Level) ............................................................................................................................................................................. 65
9. The macroeconomy (A Level) .............................................................................................................................................................................................................. 74
10. Government macroeconomic intervention (A Level) .......................................................................................................................................................................... 81
11. International economic issues (A Level) ............................................................................................................................................................................................ 85
Scheme of Work
Introduction
This scheme of work for Cambridge International AS & A Level Economics 9708 has been developed for teachers to help provide ideas about how to construct and
deliver this course. It does this by breaking down the syllabus into an accessible number of AS Level and A Level topics, with suggested teaching activities,
resources and teaching notes provided for each. This document also provides a suggested teaching order for use or adaptation, and an indication of the amount of
teaching time you might want to allow for each topic. The AS Level topics come first to help ensure that it will support centres teaching the AS Level award or the
full A Level via a modular or linear routes effectively.
Suggestions for independent study (I), formative assessment (F) and Extension activities are included. Throughout the scheme of work we have also included
reference to the United Nations Sustainable Development Goals and some optional activities that incorporate the topic of sustainability.
Please note: These additional/optional activities can be found in the document, ‘Optional activities (sustainability)’, and provide a focus of how some of the syllabus
content may be taught, if centres wish to integrate sustainability into their teaching programmes.
The scheme of work is divided into the topics to ensure that teachers have clear and visible coverage of the whole syllabus. The activities provided for each topic
are suggestions and there are many other useful activities to be found in other resources. The topics within this scheme of work are:
Topic areas Suggested AS Level time allocation (%) Suggested A Level time allocation (%)
1. Basic economic ideas and resource allocation 20% 10%
2. The price system and the microeconomy 20% 30%
3. Government micro economic intervention 10% 20%
4. The macroeconomy 30% 30%
5. Government macro intervention 10% 10%
6. International economic issues 10% 10%
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Scheme of Work
Suggested teaching order

Teachers will have different views about the correct order to teach specific topics for this syllabus, but this scheme of work is set out in this way for a particular
reason. There is a logic in starting with basic economic ideas, progressing through microeconomics in terms of both the price system and government intervention,
and then going on to focus on macroeconomics issues and possible reasons for government intervention. There are other possible alternative teaching
approaches. For example, some teachers might prefer to start with macro issues and then go on to study micro-economics. The teaching order would also depend
on whether it was decided to teach AS Level and A Level in separate years or to teach them together. Decisions about the teaching order are also likely to depend
on whether a centre has just one teacher of Economics or a number of teachers teaching the subject.
Key concepts
Key Concept 1 (KC1) – Scarcity and choice
Key Concept 2 (KC2) – The margin and decision-making
Key Concept 3 (KC3) – Equilibrium and disequilibrium
Key Concept 4 (KC4) – Time
Key Concept 5 (KC5) – Efficiency and inefficiency
Key Concept 6 (KC6) – The role of government and the issues of equality and equity
Key Concept 7 (KC7) – Progress and development
This scheme of work suggests a range of potential opportunities to focus on these key concepts to help make teachers aware of which topics in the syllabus could
help exemplify the key concepts. It is envisaged that a focus on these key concepts will result in a number of benefits for learners, including:
• a greater depth as well as breadth of subject knowledge

• confidence, especially in applying knowledge and skills in new situations
• the vocabulary to discuss their subject conceptually and show how different aspects link together
• a level of mastery of their subject to help them enter higher education.
The key concepts are an important teaching and learning tool and, as such, will not be directly assessed or included in mark schemes, although clearly a good
grasp of them could lead to better quality answers. They can be used to empower both teachers and learners, but they can be applied usefully in a range of
contexts and not simply in the ones referred to above. Teachers and learners can apply and adapt them in a variety of contexts and the outcome will be a more
lively and enriching experience for both.
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Scheme of Work
School Support Hub

The School Support Hub is a secure online resource bank and community forum for Cambridge teachers, where you can download specimen and past question
papers, mark schemes and other resources. We also encourage teachers to join the discussion forum specific to the syllabus, where topics and issues can be
shared. We also offer online and face-to-face training – details of forthcoming training opportunities are posted online.
This scheme of work is available as PDF and an editable version in Microsoft Word format – both are available on the School Support Hub. If you are unable to
use Microsoft Word you can download Open Office free of charge from www.openoffice.org.
Resources
This scheme of work provides ideas for useful resources to accompany each suggested activity of the topic tables. In addition, a list of endorsed textbooks can be
found at www.cambridgeinternational.org. Textbooks endorsed by Cambridge cover the syllabus for which they were written and have been through a quality
assurance process to ensure they meet our required standards.
Tools to support remote teaching and learning – Click here to find out about and explore the various online tools available for teachers and learners.
Websites:
This scheme of work includes website links providing direct access to internet resources. Cambridge Assessment International Education is not responsible for
the accuracy or content of information contained in these sites. The inclusion of a link to an external website should not be understood to be an endorsement of
that website or the site's owners (or their products/services).
The particular website pages in the learning resource column of this scheme of work were selected when the scheme of work was produced. Other aspects of the
sites were not checked and only the particular resources are recommended.
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Scheme of Work
How to get the most out of this scheme of work – integrating syllabus content, skills and teaching strategies
We have written this scheme of work for the Cambridge International AS & A Level Economics syllabus and it provides some ideas and suggestions of how to
cover the content of the syllabus. We have designed the following features to help guide you through your course.
Suggested teaching activities give you lots of

ideas about how you can present learners with
new information without teacher talk or videos.
Try more active methods which get your
learners motivated and practising new skills. Independent
study (I) gives
Syllabus ref. Suggested teaching activities your learners
Teacher guidance and resources
the opportunity
Nature and Learners give examples, ideally within the learner’s local Public goods must possess these characteristics
to develop their
definition of environment, and explain their choice. to explain the ‘free riderown
problem’.
ideas and
public goods understanding
Extension activity: In pairs, learners discuss why Public without direct
Goods are associated with market failure. input from you.
Extension activities provide your
Naturewith
more able learners andfurther Provide a definition and examples of merit goods in terms of Under-consumption as a result of imperfect
definition of imperfect
challenge beyond the basic content of information by consumers. information in the market.
merit goods:
the course. Innovation and
independent learning are the basis Learners
of write down examples of merit with some justification
for their choices. (I)(F) Formative assessment (F) is on-going assessment
these activities. Opportunities to which informs you about the progress of your learners.
integrate sustainability are provided Don’t forget to leave time to review what your learners
via optional activities. have learnt, you could try question and answer, tests,
quizzes, ‘mind maps’, or ‘concept maps’. These kinds of
activities can be found in the scheme of work.
Past papers, specimen papers and mark schemes

are available for you to download at:
www.cambridgeinternational.org/support
Using these resources with your learners allows you

to check their progress and give them confidence and
understanding.
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1. Basic economic ideas and resource allocation (AS Level)

Syllabus ref. Suggested teaching activities Teacher guidance and resources
1.1 Scarcity, choice and opportunity cost
The fundamental Introduce the idea of economic ‘needs’ and ‘wants’ (and the It is important to stress at this point that economists assume that
economic problem difference to general non-economic needs and wants.) wants are unlimited. This is a key assumption.
The meaning of scarcity
and the need to make Learners list their economic ‘needs’ and their economic ‘wants’. (I) At this point it is sufficient to list the factors of production and
choices at all levels point out that a more detailed explanation will follow.
(individuals, firms, As a class, share and discuss learners’ ideas. Is there a limit to
governments) their economic needs? Is there a limit to their economic wants? www.tutor2u.net/economics/revision-notes/as-markets-scarcity-
Can all their wants be fulfilled? If not, why not? and-choice.html
KC1
Use the class discussion to introduce the remaining fundamental Key Concept 1: Scarcity and choice This is a good time to
key terms in economics: introduce the idea of key concepts and explain how they will run
• resources throughout the study of AS & A Level Economics. Then link this
• Scarcity concept to the preceding teaching. It is important to stress that
• Choice. the idea of scarcity is fundamental, and how to use scarce
resources requires choices to be made. If scarcity did not exist
Groups produce a ‘mind map’ which illustrates the connections there would be no need for the subject of economics.
between the key terms explained and what we mean by the term
‘economics’.
Extension activity: More confident learners can produce their

map on the whiteboard for the class to discuss.
Nature and definition of Ask learners questions based on what choices they have made
opportunity cost recently. Explain that the choice they didn’t take is the opportunity
cost of their decision.
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 12 – Responsible Consumption and Production
1.2 Economic methodology
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Economics as a social When explaining compare with a physical science. A good explanation at this point helps learners understand
science economic methodology throughout the course.
Positive and normative Introduce definitions of positive and normative statements Ideally, the examples should relate to the economy of the
statements Give learners working in pairs a number of statements, some learner’s country.
positive, and some normative. Learners categorise them into the
two types. www.tutor2u.net/economics/blog/positive-and-normative-
Go through the answers as a class, and learners justify their statements-try-our-swipe-it-resource
conclusions verbally.
Learners, individually or in pairs, to construct a positive and a

normative statement themselves. (I)
Plenary or starter for next lesson, use the ‘swipe-it resource’.
Ceteris paribus, This is best introduced when teaching demand and supply, and
Time period the introduction of changing determinants of demand, or the
production possibility curve (PPC).
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 1 – No Poverty
1.3 Factors of production
Nature and definition of Give definition of factors. Learners categorise various examples of This is a good mini white board activity, as you can see all
factors of production, the factors, in to land, labour, capital (physical and human) answers.
Difference between
human and physical
capital
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 4 – Quality Education / SDG 14 – Life Below Water / SDG 16 – Peace, Justice
and Strong Institutions
The rewards to the factors Explain to learners the meaning of and difference between the Take care when explaining the terms. Economic ‘capital’, refers
of production: land, four factors of production (categories of resource): land, labour, to assets, such as machines, used as a means of producing
capital and enterprise. consumer goods/services, rather than valuable themselves.
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labour, capital and (This is not financial capital which refers to financial assets held
enterprise Learners form small groups and choose a type of product (e.g. in banks.)
clothing, food, furniture, electrical equipment.). Each group has to
identify four examples of factors of production (resources) that ‘Land’ includes everything that we grow on the land, or use from
could be used to produce the product and how these factors might the sea as well as all raw materials, for example wood, and iron.
be used to fulfil the needs and wants of the group.
Note: Enterprise is sometimes described as a ‘special type of
Give learners a worksheet listing a range of different resources labour’.
that might be used in a modern economy and ask them to classify
each resource according to type, perhaps using a table. Learners
swap worksheets and assess each other’s work.
The rewards to the factors Match activity. Give learners definitions of rewards and ask them
of production: land, to match up with the factor.
labour, capital and
enterprise
Specialisation and the Watch a video (from YouTube) of a factory in action such as a car www.youtube.com/watch?v=-z3xJJxOx6E
division of labour factory. Compare with a business making cars by hand. Discuss
with class, why the factory produces more products. Use the video Videos which explain the theory.
KC1 as a basis of discussion of specialisation. www.youtube.com/watch?v=ATPxQih6Uag
www.youtube.com/watch?v=Mq6VF7TSpk4
The role of the factor Each learner imagines that they have recently been appointed to It is essential that key elements such as risk taking, organising
entrepreneur in the role of managing director of an organisation of their choice. the other factors of production and receiving profit are clearly
contemporary economies They list as many functions as they can that are necessary to linked to the factor enterprise.
successfully undertake this role.
Collate the responses on the whiteboard. Identify the specific

functions associated with the factor of enterprise.
Progress check – factors Consolidate learning based on a short answer or multiple-choice Multiple-choice questions are particularly useful for this type of
of production questions selected from Cambridge past papers (pre 2023) on the activity as learners can talk about their choices and explain why
nature of factors of production to help consolidate learning on this they rejected each of the alternative options, thus helping to
topic. consolidate learning.
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Go through the answers with the class, inviting learners to discuss

the reasons for the answers they gave.
1.4 Resource allocation in different economic systems
Decision making in Class discussion on how resource allocation relates to each of the It is important to establish how economic systems address the
market, planned and three key questions: basic economic problem.
mixed economies, • what will be produced
• how Distinguish between price mechanism and resource allocation in
Resource allocation in • for whom. market system and how central governments allocate resources
these economic systems in a planned economy.
Provide a list of characteristics which are commonly associated
with the three economic systems. Learners, individually or in pairs www.tutor2u.net/economics/reference/economic-systems
to categorise the characteristics into each system. This resource includes a video about Cuba which could provide a
basis for discussion.
Flipped learning task. Direct learners to research the economic
systems. Include, the key characteristics, advantages and www.tutor2u.net/economics/reference/economic-systems-
disadvantages of each system. connection-wall-activity
This is useful as a plenary activity or can be adapted to use in a
Learners provide evidence to decide what kind of economic variety of ways in class.
system might accurately represent their economy.
See additional discussion activity in the document ‘Optional activities (sustainability)’ – SDG 3 – Good Health and Well-Being
1.5 Production possibility curves (PPC)
Nature and meaning of a Introduce the idea of production possibility curves and opportunity Ensure that learners understand that a production possibility
PPC lost. Learners imagine they have a fixed amount of money to curve describes all the combinations of two goods which can be
spend. Use a simple straight-line graph of the possibilities produced, using all available resources.
KC1 between, e.g. all electronic products, all books, and combinations
of both, where one electronic product is equivalent to four books. Important that learners correctly label the axes.
(Use products relevant to the local context.)
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Scheme of Work
Learners decide where on the graph they would choose. What

have they lost in terms of the alternative product?
Shape of the PPC Define opportunity cost as the next best foregone alternative. It should also be pointed out that this cost is measured in real
Explain that a production possibility curve is a simple economic terms not monetary terms and that we must assume that
Constant and increasing model which makes predictions about the relationship between consumers can measure the amount of satisfaction gained by
opportunity costs variables, based on simplifying assumptions. the consumption of a unit of a good/service.
This is an example of ‘ceteris paribus’: it assumes that all other
KC2 Make sure learners understand that this is an example of fixed factors which might affect the production output remain
KC5 opportunity costs and results in a straight-line production constant.
possibility graph.
www.tutor2u.net/economics/revision-notes/as-markets-
Provide learners with data on alternative levels of output (e.g. of production-possibility-frontier.html
agricultural and manufactured products) which produce an
opportunity cost that is concave to the origin. Learners individually
plot a graph of the production possibility curve.
Learners work in pairs, writing down their answers to the following:

• what does a single point on this curve represent?
• comparing the opportunity cost in the output of one of the
products at different points along the curve (i.e. as more units
of the other product are produced)
• explain what is happening to the opportunity cost.
Causes and Learners draw separate production possibility curves to illustrate: www.tutor2u.net/economics/revision-notes/as-markets-
consequences of shifts in • increasing costs production-possibility-frontier.html
the PPC • constant costs
• economic growth.
Learners explain the shape and shift of each production possibility

curve to the class. (I)(F)
Significance of a position Learners consider what a point within the PPC means in terms of
within a PPC production.
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See additional activity and video link in the document ‘Optional activities (sustainability)’ – SDG 13 – Climate Action
Progress check Q2a, Specimen Paper 2 (for examination from 2023)
1.6 Classification of goods and services
Nature and definition of Elicit key characteristics associated with free goods and private Make sure learners understand that the economist’s definition of
free goods and private goods through questions/answers, e.g. provide examples, and ask a ‘free good’ is different to the general understanding of the
goods (economic goods) questions about whether there is any restriction to them (e.g. term. It means a good that is not scarce and is therefore
through pricing) if their supply is limited/unlimited, what available in as great a quantity as desired with no factors of
consumption by one consumer will mean for consumption by production (see the earlier activities on scarcity and factors of
others. production).
Learners provide examples from their own experience.
Nature and definition of Describe characteristics of public goods: there is no restriction on Public goods must possess these characteristics to explain the
public goods access once the good is produced, and no reduction in availability ‘free rider problem’.
due to consumption. Emphasise that these goods must possess
the characteristics outlined.
Learners give examples within the learner’s local environment and

explain their choice.
Extension activity: In pairs, learners discuss why Public Goods

are associated with market failure.
Nature and definition of Provide a definition and examples of merit goods in terms of Under-consumption as a result of imperfect information in the
merit goods: imperfect information by consumers. Learners write down market.
examples of merit with some justification for their choices. (I)(F)
Nature and definition of Provide a definition and examples of demerit goods, in terms of Over consumption as a result of imperfect information in the
demerit goods imperfect information by consumers. Learners write down market.
examples of demerit goods with some justification for their choices.
(I)(F)
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Free goods; private goods Provide a definition and examples of these types of goods.
(economic goods); and Learners write down examples of these goods with some
public goods justification for their choices. (I)(F)
Consolidation of nature of A simple categorisation or match the terms activity would be useful Worksheet or mini whiteboards could be used, or a carousel
goods here to ensure learner understanding. around the class.
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 4 – Quality Education / SDG 6 – Clean Water and Sanitation / SDG 12 –
Responsible Consumption and Production
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2. The price system and the microeconomy (AS Level)

2.1 Demand and supply curves
Effective demand It is important to emphasise that it is only effective demand

Give definition of effective demand.
which matters to business organisations and therefore to
economists.
www.tutor2u.net/economics/revision-notes/as-markets-
demand.html
Individual and market In pairs, learners: Stress throughout the importance of plotting graphs which are
demand and supply • decide how many cups of a suitable drink they would buy in accurately labelled and use the full extent of both axes.
a week at different given prices
KC1 • produce a table illustrating this relationship between the Remind learners to keep the graphs developed in the pair
price of the drink and the number of cups demanded work task as they will be needed for the next activity.
• plot a graph of demand for based on this data
• write down the relationship between their demand for the Note that demand and supply curves are another example of
chosen drink and its price. ceteris paribus covered in the activities on scarcity choice and
• demonstrate the ‘law of demand’ through the downward opportunity cost in the first AS unit on Basic economic ideas.
slope of the curve – an increase in price leads to a
decrease in quantity demanded, but a decrease in price Both inferior goods for low income purchasers and luxury
leads to an increase in quantity demanded. items can produce abnormal demand curves.
Follow this with a class question and answer session. As part of this www.tutor2u.net/economics/revision-notes/as-markets-
use the demand curve graphs produced by the learners or a pre- supply.html
prepared curve to:
• establish the meaning of the terms ‘extension of demand’ www.tutor2u.net/economics/revision-notes/as-markets-
and ‘contraction of demand’ demand.html
• explain that extensions/contractions only occur due to price
changes
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Scheme of Work
Individual and market Market demand- explain that the class is a sample of the whole
demand market. The market demand is the summation of all individual
demand curves.
Determinants of demand Learners in pairs think of anything else other than price that might The two pair tasks in this activity provide a good opportunity
affect demand for their chosen drink. for peer mentoring.
KC1
KC2 Ask each pair to share their ideas with the class and then use this to Ceterus Paribus can be introduced here.
produce a combined list of factors. Write answers/ feedback on
whiteboard. Learners put into a spider diagram.
In pairs, learners consider how each factor determines demand.
Activity on compliments and substitutes. Give learners pairs of

goods (on a PowerPoint) ask them to write down whether they are
compliments or substitutes.
Develop by introducing the idea of price changes of compliments

and substitutes and how this would affect demand.
Determinants of supply As above but for supply.
Causes of a shift in the Present a diagram showing how the demand can shift to both the Relate to activity above (Determinants of Demand).
demand curve (D) left and right. Give explanation. Shifts in curves consolidation can be done as a quick activity
on mini white boards at the end of a lesson.
Give learners a list of scenarios based on determinants of demand.
Learners draw diagrams showing changes and include explanation. It is important that learners know how to explain the diagrams
fully.
Causes of a shift in the As a above but for supply

supply curve (DS)
Distinction between the Give task to show effect of changing demand and supply, include a This can be incorporated when giving explanations in the
shift in the demand or price change. above sections.
supply curve and the
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movement along these

curves,
Progress check – demand Consolidate learning on demand and supply by selecting questions Select questions that require learners to draw curves, graphs
and supply curves or part-questions from Cambridge Paper 2 past papers (pre-2023) or diagrams.
to set as a class test or homework.
Cambridge specimen papers (2023, past papers (pre 2023) and
Multiple-choice questions are also useful at this stage. mark schemes are available at
2.2 Price elasticity, income elasticity and cross elasticity of demand
The definition and Demonstrate suitable elastic and inelastic materials to the class to This activity offers several opportunities for differentiation to
calculation of elasticity of illustrate that elasticity is about how responsive one variable is to a help support learners of different ability levels with this topic. For
demand change in another. Give definition. example, you can:
Give formula for calculation • tailor the worksheet to provide questions with different
levels of difficulty for more able and less confident learners
Hand out pre-prepared worksheets containing data for several • encourage peer mentoring by asking learners to review and
different goods, showing for each good: discuss their answers with each other
• the price of that good • ask more able learners to investigate the difference between
• the amount sold at that price arc elasticity and point elasticity.
• the change in the amount sold when the price changes
(increases/decreases). www.tutor2u.net/economics/revision-notes/as-markets-price-
elasticity-of-demand.html
Do an example calculation with the class, showing that an inverse
relationship between price and demand gives a negative coefficient. www.economicsonline.co.uk/Competitive_markets/Elasticity.htm
Learners compare their answers in pairs. (online quiz)
Conclude by explaining to the class that:

• different goods can have different elasticities, and what the
possible reasons for this are
The range of elasticities of Explain the following three special cases of price elasticity of
demand demand.
• perfectly elastic (PED = infinity)
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• perfectly inelastic (PED = 0)

• unitary elastic. (PED = –1)
In pairs, learners are given a pre-prepared worksheet containing

demand and price data for each type of special elasticity. each pair:
• calculates the percentage change in elasticity for each data set
and identify which is perfectly elastic, perfectly inelastic and
unitary elastic
• constructs graphs based on these coefficients to represent each
of these three categories.
Discuss the significance of these coefficients and the three cases

they relate to.
Learners suggest practical ways in which understanding of these

coefficients could be applied of useful applications of this
understanding, for example, the type of good that a government
wishing to raise tax revenue, is likely to tax.
Relationship between Hand out a pre-prepared worksheet containing a table of price and Give learners plenty of opportunity to practice questions on
PED and total expenditure total revenue with gaps in the data and learners calculate the this topic to ensure they understand both the economic
revenue (price x quantity) both before and after the price change. concepts and the mathematical calculations.
Class discussion based on this work to establish the relationships www.economicsonline.co.uk/Competitive_markets/Elasticity.htm

between price changes, elasticity and changes in total revenue. (online quiz)
Learners plot a graph from given data showing the impact of

variations in price elasticity of demand can lead to price volatility
following a change in conditions of supply.
The meaning and Class discuss how the amount people spend changes (or doesn’t) Income elasticity of demand measures the change in demand in
calculation of Income when their income changes. Show learners (PowerPoint) a range of relation to change in income, i.e. the percentage change in
elasticity of demand
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products and they rank in order which products would see the quantity demanded of a good divided by the percentage change
biggest change in demand following a change in income. in income.
Give definition; give formula. Inferior goods such as junk food is one example of where
demand might fall with a rise in income.
Hand out a pre-prepared worksheet for learners to calculate income
elasticities of demand for a suitable range of normal, luxury and www.economicsonline.co.uk/Competitive_markets/Income_elas
inferior goods. ticity_of_demand.html
The meaning and Learners give examples of goods that substitute another good and Cross-price elasticity measures the responsiveness of demand
calculation of Cross then that and complement that original good. Learners suggest for a good following a change in price for a related good, i.e.
elasticity of demand what they think will happen to the demand of the substitute good the percentage change in quantity demanded of product A
and the complementary good if the price of the original good divided by the percentage change in price for product B.
increases.
Complementary goods produce a negative sign and substitute
Introduce the term ‘cross-price of demand’. Learners build on this goods generate a positive sign. This should be established by
and use their learning on income elasticity of demand to produce a choosing goods, establishing their type and then calculating
formal definition of cross-price elasticity of demand. their cross-price elasticity.
Learners share their ideas with class. Ensure everyone www.tutor2u.net/economics/revision-notes/as-markets-

understands the correct definition. crossprice-elasticity-of-demand.html
Hand out a pre-prepared worksheet requiring learners to calculate

values of cross-elasticity associated with complementary and
substitute goods. Include questions that check learners’
understanding of the relationship between the value of cross-
elasticity coefficients and complementary and substitute goods.
The implications for Think-Pair-Share – Learners decide what elasticity tells us about a
decision making of price, product. Is it useful? Are there any flaws? Give learners some
income and cross- structure through set questions.
elasticities of demand
Learners write down their answers/ findings. Draw findings together
by class discussion.
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2.3 Price elasticity of supply
Definition and calculation Learners refer to the definition of price elasticity of demand www.tutor2u.net/economics/content/topics/elasticity/elasticity_
of elasticity of supply discussed earlier in the section and use this as a guide to of_supply.htm
formulating their definition and formula for price elasticity of supply.
www.economicsonline.co.uk/Competitive_markets/Elasticity.htm
Learners complete worksheet questions and practise calculations (online quiz)
using the online elasticity quiz.
Highlight the relationship between price and supply, and the sign
Exchange sheets and peer assess. of the coefficient: if the relationship is direct (as price increases,
supply increases), the coefficient is positive.
Significance of relative Invite individual learners to draw and explain a supply curve on the This exercise provides opportunities for the more confident
percentage changes, the whiteboard which is consistent with one of the three limiting cases learner to demonstrate their understanding and allow the class
size and sign of (perfectly elastic, unitary, perfectly inelastic). to partake in determining the solutions
coefficient of PES
The class then decides whether the diagram and explanation are www.tutor2u.net/economics/content/
correct and if not, why not. Repeat for the two remaining limiting topics/elasticity/elasticity_of_supply.htm
cases.
The factors affecting Explore factors which influence supply through class question and The teacher could give each learner a hand-out which lists the
elasticity of supply answer, and establish the importance of the relative time period. key factors which determine the price elasticity of supply.
Use a graphical explanation of, e.g. supply of fish in a three part
diagram (momentary/short run/long run). www.tutor2u.net/economics/content/
topics/elasticity/elasticity_of_supply.htm
Ask learners for examples of other products for which the time
period is an important factor determining the price elasticity of
supply.
Learners use the tutor2u website to find an explanation of factors,

which influence elasticity of supply. They list the factors, based on
their research.
Use learner input to form a list of the main influences on the

elasticity of supply for the class.
20
Scheme of Work
Provide examples of different goods/services and learners decide

(with explanations) which of these might be elastic or inelastic.
Progress check Question 3, Specimen Paper 2 for examination from (2023) Part (b) of this question gives learners the opportunity to apply
government micro policies.
2.4 The interaction of demand and supply
Definition of equilibrium Draw a diagram on the board of a market in equilibrium. .It is important to expand the definition of equilibrium to ensure
and disequilibrium Give definition and explain equilibrium. that learners understand that the market will not clear, i.e.
Draw on diagram other output positions; Learners identify if the there will not be excess demand or supply, but also the price
KC3 market is in equilibrium. Explain that demand is not equal to supply will not change, because the market is balanced or stable.
at these other points – disequilibrium.
www.tutor2u.net/economics/content/topics/demandsupply/marke
Learners draw diagram showing excess demand and excess t_equilibrium.htm
supply.
Effects of shifts in Review briefly the factors other than price affecting demand and The teacher might pair able learners with a learner who is
demand and supply supply. finding difficulty with this section of the course. This will
curves provide a further opportunity for peer mentoring.
Using diagrams (learners to draw on the whiteboard) and question
KC3 and answers, e.g. how would the factor affect demand at each www.tutor2u.net/blog/index.php/economics/comments/unit-1-
price, what is the resulting plot on the graph, show how an increase micro-key-diagrams-and-glossary
in demand causes the whole demand curve to shift to the right
(increase) and a decrease shifts the whole curve to shift to the left. Ensure learners understand how the equilibrium changes.
Ensure learners know how to fully explain the changes that
Repeat to show shifts of a supply curve. occur in the market when there are changes.
Use diagrams and learner input to look at movement along the

demand and supply curves and revise the meaning of contraction
and extension (i.e. change in price causing change in quantity
demanded/supplied). Re-emphasise the differences between
decrease and contraction of supply and demand, and increase
and extension of supply and demand.
21
Scheme of Work
Joint demand Use diagram and learner input to show how a decrease in the price www.tutor2u.net/economics/revision-notes/as-markets-
(complements) and of a good that is complementary to product A might cause the crossprice-elasticity-of-demand.html
alternative demand whole demand curve for product A to shift to the right (increase).
(substitutes) Alternatively, if the price of the complementary product increases,
the whole demand curve for product A might shift to the left
(decrease).
Learners repeat this activity for an increase or decrease in the price

of a substitute good and show how this might cause the whole
curve to shift to the right (increase) or to the left (decrease).
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 13 – Climate Action
Derived demand Give learners an example of derived demand (workers are an

obvious one). Learners draw a diagram to show the effect of the
change in one market on the other.
Joint supply Learners provide possible examples of joint supply. Note www.tutor2u.net/blog/index.php/economics/comments/joint-
suggestions on the whiteboard and ask the class whether and why supply-the-by-products-of-pigs
they would accept/reject chosen examples.
Learners draw relevant diagrams to show the impact on the market

equilibrium price of a change in the price of a good in joint supply.
Learners can swap diagrams and mark according to teacher mark

scheme.
The workings of the price Learners could work in pairs or small groups to consider examples Emphasise that the price mechanism is not a static, but a
mechanism; rationing, of where the price mechanism is used as a rationing and signalling dynamic, concept. The price mechanism involves rationing
signalling and the device. For example, the operation of an auction or an internet buy and signalling functions and learners need to appreciate that a
transmission of and sell site. This activity would require prior input by the teacher. price paid by a consumer is a way if indicating preferences.
preferences
Learners could watch the video on Tutor2u and make their own www.tutor2u.net/economics/reference/functions-of-the-price-
KC3 notes. Or a structured worksheet could be provided to accompany mechanism-1
the video.
22
Scheme of Work
2.5 Consumer and producer surplus
Meaning and significance Use a question and answer session using examples (e.g. concert The surplus is the difference between the price the consumer
of consumer surplus tickets) to produce a description of consumer surplus. would be willing to pay and the actual price paid(market price).
Draw a diagram to show consumer surplus.
Meaning and significance Use a question and answer session using examples to produce a The surplus is the difference between the price the producer
of producer surplus description of producer surplus. would be willing to sell for and the actual selling price (market
Draw a diagram to show producer surplus. price).
Causes of changes in Give learners working individually a worksheet with four diagrams. Illustrate by explaining the situation when the market is not in
consumer and producer Each diagram shows the effect on market equilibrium price, due to equilibrium and then linking this to an inefficient outcome.
surplus. either a shift in supply or a shift in demand. Learners show how the
consumer and producer surplus will change in each situation. www.tutor2u.net/blog/index.php/economics/comments/unit-1-
Significance of elasticity micro-key-diagrams-and-glossary
Learners exchange completed worksheets, mark the answers and
KC3 discuss each other’s response.
Now introduce a new worksheet showing diagrams with different

elasticities of price and supply. Give learners scenarios to shift the
curves and they note the resulting change in consumer and
producer surplus.
Progress check – To consolidate learning on this topic, set learners an end of topic You should also take the opportunity to discuss good multiple
consumer and producer quiz on consumer/producer surplus. Include multiple-choice choice question techniques as part of exam skills in general.
surplus questions from Paper 1 past papers (pre 2023) and make sure this
gives the opportunity to revise all the material covered in this
section. (I)(F)
Discuss the answers to help clarify any weak areas or

misunderstandings.
23
Scheme of Work
3. Government microeconomic intervention (AS Level)

3.1 Reasons for government intervention in markets
Addressing the non- Think-Pair-Share – Using an example such as street lighting, Ensure that the characteristics of a public good are clear –
provision of public goods learners consider why they are provided by the government. Non rivalry and non excludable.
Draw out the characteristics of a public good – place on board. Explanation of free rider problem is also needed.
Learners think of other goods which have the same

characteristics.
Merit and demerit goods Think-Pair-Share – Using an example of a merit good, learners Merit goods are under-consumed due to information failure.
consider why they are provided by the government. Demerit goods are over-consumed due to information failure.
Draw out the characteristics of a merit good – place on board.

Learners think of other goods which have the same
characteristics. Do the same for demerit goods.
Controlling prices in Think-Pair-Share – Learners consider which goods may have You may have to give local examples of goods.
markets prices that are too high or too low in their own economy. Learners
consider whether the government should intervene. Explain how high and low prices result in excess supply and
KC6 excess demand.
Case studies from newspapers may also be used to provide a
stimulus. Ask the questions to illicit the answer.
3.2 Methods and Effects of government intervention in markets
Indirect taxes Explain using taxes of the learners’ own countries the definition of Provide a clear explanation of the difference between the
specific tax. impact of a tax and the incidence (or burden) of a tax. The
KC6 simple way to explain incidence, is that it is the
In pairs, learners think of reasons (for class discussion) for levying percentage/proportion of a tax paid by the consumer compared
such taxes and what types of goods are suitable for taxation. to the percentage/proportion of the tax paid by the producer.
24
Scheme of Work
Draw diagram, on board to explain effect on market price and

quantity demanded of an indirect tax.
Ask each learner to draw an inelastic demand curve and an

elastic demand curve and then use their diagrams to show how
the impact of a specific tax on price and units sold will vary
significantly depending upon the elasticity of demand for the
product.
Discuss the answers using diagrams and learners’ contributions.
Subsidies Invite individual learners to draw and label a diagram on the Encourage learners to give examples of the type of
whiteboard which illustrates how a subsidy will affect the price and goods/services which governments are likely to subsidise, and
KC6 quantity sold of a good. why.
Invite learners from the class to make any changes to the diagram Contrast the effect of a subsidy with that of a specific tax.
they think necessary.
Requiring learners to construct diagrams will reinforce the
Draw and explain the correct diagram on the whiteboard. assessment for learning approach.
Learners draw an inelastic demand curve and an elastic demand www.tutor2u.net/economics/revision-notes/as-marketfailure-

curve and then use their diagrams to show how the impact of a producer-subsidies.html
specific subsidy on price and units sold will vary significantly
depending upon the elasticity of demand for the product.
Learners draw diagrams on the whiteboard which illustrate the

impact of a subsidy on perfectly elastic and perfectly inelastic
goods.
Direct Provision Learners write down what they think is meant by the ‘direct Ensure that learners understand the key difference between
provision of goods and services’. direct provision and indirect provision.
Learners make a list of goods which they think are more likely to
be provided directly by governments rather than through the
market mechanism.
25
Scheme of Work
Lead a class discussion which identifies some typical goods

provided directly by governments. Focus on ‘Public’ and ‘Merit’
goods, which will revise material covered earlier.
Divide the class into two groups. The groups identify goods as
follows:
• Group 1: identifies goods they think should be provided directly
• Group 2: identifies goods they think should be provided
through market forces.
Each group is given time to research and prepare their case. They
will attempt to justify their choice to the class and answer
questions from the class.
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 3 – Good Health and Well-Being
Maximum and minimum Ask each learner to write down what they think economists mean You should stress the importance of setting maximum prices
Prices by a maximum and minimum price and provide an example of a below market equilibrium price and minimum prices above
situation where a maximum and a minimum price might be market equilibrium price.
KC3 applied.
Learners should clearly identify a situation which will cause an
Demonstrate both maximum and minimum price effects by excess demand and compare this with a situation which will
drawing appropriate graphs on the whiteboard. Learners supply cause excess supply.
suggestions for labelling the diagrams.
www.tutor2u.net/economics/revision-notes/as-marketfailure-
maximum-prices.html
Buffer stocks Think-Pair-Share – Using agriculture as an example, explain how Buffer stock is where reserves of a commodity are held back
surpluses and shortages can occur. Learners consider what can during an abundance to stop prices going too low and released
be done to smooth out this surpluses and shortages. during a shortage to stop prices going too high.
Give learners a worksheet with diagram and explanation. Take out ‘Filling in the gaps’ is an effective method in economics when
some of the keywords in the explanation and Learners put the links/ processes are needed to be understood.
right word in.
26
Scheme of Work
Provision of Information Research task. Learners find examples of government information Local examples will help learners understand how provision of
schemes in their own country. Report by to class. Discussion of information can work, particularly of compared with changes in
whether they are effective or not. consumption of goods.
3.3 Addressing Income and wealth inequality
Difference between Use a visual aid/ diagram to illustrate that income is a flow and Visual aids can be found in google images. Images can aid
income and wealth as a wealth is a stock. learners’ understanding.
stock concept.
Measuring income and Display a Lorenz curve to learners. Explain that a Gini coefficient Learners will not need to calculate the Gini coefficient from a
wealth inequality: Gini is derived from a Lorenz curve. Display different Gini co-efficients Lorenz curve.
coefficient for different countries so learners can appreciate the differences
and what they mean.
Economic reasons for Show the video from tutor2u.net. Learners take notes. www.tutor2u.net/economics/reference/inequality-of-income-and-
inequality of income and Feedback to teacher. Teacher displays on board. wealth
wealth Learners write up own notes.
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 10 – Reduced Inequalities
Policies to redistribute Only a brief understanding of progressive taxation is needed at

income and wealth: this stage.
• Minimum wage
• Transfer payments
• Progressive income
taxes
• State provision of
goods and services
KC6
27
Scheme of Work
4. The macroeconomy (AS Level)

4.1 National income statistics
Meaning and measuring Explain the measures using a numerical example from the learners’ Visual aids would be useful here. Look on Googleimages.
national income statistics own country.
Adjustment of measures Explain using numerical example.

from market prices to basic
prices
Adjustment of measures Explain using numerical example.

from gross values to net
values.
4.2 Introduction to the circular flow of income
The circular flow of income Show presentation from Tutor2u on how the economy works. www.tutor2u.net/economics/reference/circular-flow-of-income-
between households, firms, and-spending
government and the Using this information, learners:
international economy; • construct a diagram of the circular flow of income between firms A closed economy does not trade with the rest of the world; an
closed and open and households for both types of closed economy open economy does.
economies • then construct an equivalent diagram for an open economy
• think of actual examples from their own or another given Ensure that learners fully understand the four-sector circular
Injections and leakages economy of all six injections/ leakages flow of income model of an open economy.
• add these to the diagram.
This activity provides a good opportunity for peer mentoring.
An alternative could be to give learners an unlabelled diagram and
ask them to complete it.
Conclude pre-prepared questions to check understanding.
Equilibrium and Display the circular flow diagram. Explain the concept of equilibrium Mini whiteboard activity is good for this activity.
disequilibrium (where injections = withdrawals). Now change the injections and
28
Scheme of Work
withdrawals and ask learners what would have to the level of

KC3 national income.
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 9 – Industry, Innovation and Infrastructure / SDG 11 – Sustainable Cities and
Communities
4.3 Aggregate Demand (AD) and Aggregate Supply (AS) analysis
Definition of aggregate Recap learning on demand and supply and how they interact to Note: Detailed knowledge of components is not required.
demand. determine an equilibrium price from the earlier AS unit on The price
system and the microeconomy.
Determinants of AD
Explain how aggregate demand is total demand.
Demonstrate on board the components by asking learners who

demand goods and services in an economy.
The shape of AD In groups learners find examples in their own economy of the four
Causes of shifts in AD main components of aggregate demand:
• consumer spending
• investment
• government spending
• net exports (exports minus imports).
Class discussion on each group’s findings.

Give learners the required component data and they plot an AD
curve.
Learners plot new curves by giving scenarios of changing factors

which would shift the AD curve, e.g. C,I, G, X,M
Definition of Aggregate Learners define aggregate supply. Discuss the suggestions LRAS, either a vertical line or in three sections – highly elastic,
Supply (AS) provided and establish an accurate definition on the board. upward sloping, vertical).
29
Scheme of Work
Then draw a short-run aggregate supply curve and a long-run

aggregate supply curve on the board. Use a class question and
answer session to establish which is which and explain the
difference in their shapes.
Learners:
• plot an AS curve and an AD curve on the same graph
• use the resulting graph to explain the output gap. (F)
causes of a shift in the AS Show the video. Learners make notes. www.tutor2u.net/economics/reference/aggregate-supply
curve in the short run
(SRAS). Establish with the class a list of factors which:
• cause movements along the AS curve
• shift the AS curve.
Causes of shift in the Think-Pair-Share Explain LRAS is an increase in production A good opportunity to relate back to the PPF.
LRAS curve potential.
Learners consider how production potential can be increased.

Feedback to class.
Effects of shifts in the AD Give out worksheet with various scenarios of changes in the Ensure learners can fully explain the changes shown in the
curve and the AS curve determinants of AD and AS. diagram and the resulting effect on real output, price level
on the level of real output, and employment.
the price level and Learners draw diagrams to show changes and comment on the
employment effect on the level of output, the price level and employment.
KC3
4.4 Economic Growth
Meaning and measuring of Explain how changes in GDP over a period of time lead to
economic growth economic growth. Use numerical examples to illustrate.
30
Scheme of Work
Distinction between growth Provide the class with worked example to show the difference Worked example could be from a textbook or the webpage
in nominal GDP and real between money values and real data, and a list of other indices below.
GDP which might be used. www.tutor2u.net/economics/reference/nominal-and-real-
national-income
Hand out a pre-prepared worksheet requiring learners to:
• calculate national output from supplied figures
• explain why some figures give the ‘real value’ of the output and
some the ‘money value’
explain the link between the GDP deflator and the distinction
between real value and money value.
Causes of economic In groups, learners:

growth • find out the different factors that can contribute to economic
growth in a country
• show their findings in a presentation
• give a short presentation to the class indicating what they
consider to be the most important factors.
Consequences of Case study work. Present learners with case studies illustrating Using examples from learners own country is beneficial.
economic growth consequences of growth, both good and bad. Learners identify the Material on China provides lots of examples.
consequences from the case studies.
KC5 Tutor2u.net has lots of information about China.
KC7 Class discuss whether economic growth is good or bad. www.tutor2u.net/search?q=China
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 15 – Life On Land
4.5 Unemployment
Measuring unemployment Explain with the use of a data chart, how unemployment is Use a chart for the UK or for learners’ own country.
measured. Explain the differences in the methods
Explain that there are a number of difficulties involved in arriving at

an accurate unemployment figure and as a result, a number of
different approaches are used.
31
Scheme of Work
In pairs or groups, learners:

• consider the practical issues involved in measuring the number of
people unemployed in an economy at any one moment
• suggest ways in which these issues can be taken into account
Conclude with a class discussion on each group’s findings and what

approaches can be used to estimate reliably.
Causes of unemployment Provide learners with case studies/ newspaper articles which Learners should understand that there are many different
illustrate various causes of unemployment. Learners identify the causes of unemployment in any economy, and that the reason
causes of unemployment in each case. why one person is unemployed may be different from why
another person is.
Class discussion to develop a more definitive list. Then focus the
class discussion on assessing the differing impact on the economy Using a past paper question is a good way of consolidating
of the different causes identified. learning on causes and there are many to choose from.
Consolidate learning by setting a past paper 2 question.
Consequences of Explain that economic growth can bring both benefits and costs. Use videos or newspaper articles from the internet which
unemployment Provide case study (materials) In groups, learners: highlight benefits or costs of growth, as handouts for learners.
• identify the various costs and benefits of growth Articles may be from the learners’ own country.
KC7 • contrast the two and consider whether there should be limits
www.tutor2u.net/economics/revision-notes/a2-macro-
Feedback findings to class for wider discussion economic-growth-costs-benefits.html
4.6 Price stability
The definition of inflation, Learners write down what they think economists mean by inflation. When describing inflation or deflation, it is important that
degrees of inflation and the learners refer to a persistent rise/fall in the average price level.
measurement of inflation, Discuss the responses in class and then provide a formal definition
deflation and disinflation on the board which includes the following three key elements: a www.tutor2u.net/economics/revision-notes/as-macro-
persistent rise in the general price level in a given time period. inflation.html (price level index)
www.tutor2u.net/economics/presentations/aseconomics/macro/I
nflation/ (presentation about inflation)
32
Scheme of Work
Then learners define deflation. Again, discuss the responses in

class and provide a formal definition including the three key
elements.
Move on to explain the different methods for calculating the rate of

inflation. Build up each stage of constructing the price level index
carefully on the board.
Use graduated questions to enable learners to build up their skills in

calculating inflation.
Go through afterwards and discuss the answers in class.
Consolidate learning by setting multiple choice questions from past

papers.
Measurement of changes Show the video to learners. Learners make notes. www.tutor2u.net/economics/reference/inflation-measuring-
in the price level: After the video, learners identify the stages of building the CPI. inflation
CPI
Learners write in their own words how inflation is measured. Identifying steps helps learners remember how CPI is
Possible difficulties in Discuss possible problems. calculated.
measuring
Provide learners with multiple-choice questions to consolidate Past paper 1 questions are useful here as there are many of
understanding. them.
The causes of inflation Hand out a pre-prepared worksheet with the different types of Filling in the gaps is a good way of illustrating the chains in
(cost-push and demand- inflation listed cost-push, demand-pull but with incomplete words on economic analysis.
pull inflation) each. Learners fill in the gaps.
Before showing the causes, see if learners can do it first –
Give opportunity for learners to illustrate the causes of both types remind them of AD/AS analysis.
using a diagram.
Learners research which types of inflation currently exist in their

own country’s economy and provide supporting evidence for each.
33
Scheme of Work
The consequences of Research activity. Guide learners in the group task by suggesting possible links
inflation In groups, learners: between inflation and potentially negative effects on
• analyse the consequences of inflation in their chosen economy macroeconomic indicators such as:
• identify and explain at least three different consequences
• attempt to assess their order of importance. • economic growth
• unemployment
Each group presents their findings to the class using a medium of • balance of international payments.
their choice. Allow time for class questions.
www.economicsonline.co.uk/Global_economics/Inflation.html
Extension activity: Groups explain and discuss the links between
inflation and unemployment and the theory which underpins this.
Progress check – inflation To help reinforce learning on inflation, set Question 4 from Paper 22 Do in timed conditions and mark as per the mark scheme to
Mar 2020. enable effective exam practice.
34
Scheme of Work
5. Government macroeconomic intervention (AS Level)
5.1 Government macroeconomic policy objectives
Use of government policy Give scenarios of each of the objectives and learners explain how This topic can only be covered after each of the policies have
to achieve each policy will achieve the macro economic objectives. been covered.
macroeconomic Use of AD/AS diagrams to show impact of the three policies on each
objectives: price stability, of the economic objectives.
low unemployment,
economic growth
5.2 Fiscal policy
Meaning of government Explain what a government budget is, using examples of learners’ Ensure learners know the difference between government
budget. country. budget and trade balance.
Explain what a deficit is and what a surplus is.
Distinction between a
government budget deficit
and a government budget
surplus
Meaning and significance Either through a power point or worksheet, give learners charts www.tutor2u.net/economics/reference/fiscal-deficits-and-the-
of the national debt showing government borrowing and national debt. Set questions national-debt
based on the data.
Learners research problems with national debt. Put results into a

table of advantages and disadvantages.
Taxation: Learners write a list all the taxes they know of in their own country.
• types of taxes:
direct/indirect, Give definitions of the direct and indirect tax.
Learners categorise the taxes they have listed into direct and
Reasons for taxation indirect.
35
Scheme of Work
Lead on to a discussion on why governments tax. Learners make

note of these.
Taxation Using PowerPoint to show the income tax rates from learners’ own The following video explains types of taxation
progressive/ regressive/ country. www.tutor2u.net/economics/reference/progressive-and-
proportional regressive-taxes
• rates of tax: marginal Think-Pair-Share – Why are there different rates of income tax?
and average rates of
taxation (mrt, art) Explain marginal rates of taxation (mrt) and average rates of taxation
(art). Using data from own country.
KC2
Learners work out mrt and art for different ‘people’ earning different
incomes.
Government spending: • Learners write a list all the items the government spends money on. This links back to components of AD. Learners could research
types of spending: capital how much is spent on each category for their country. This
(investment) and current • Give definitions of capital and current. could be a flipped learning task.
Reasons for government
spending Learners categorise the categories they have listed into each type. This could lead onto a discussion on whether government
should increase/ decrease certain components of government
KC1 Lead on to a discussion on reasons for government spending. spending.
Learners make note of these.
Distinction between Use AD/AS to demonstrate the two types of policy. Tutor2u has many resources on fiscal policy
expansionary and www.tutor2u.net/search?q=fiscal+policy
contractionary fiscal policy
AD/AS analysis of the Explain, using one example, how changes in tax and/or government Practise of AD/AS diagrams and resulting impact on income,
impact of expansionary spending affects income, output and employment. Do this using output and employment is important for candidates to do well in
and contractionary fiscal AD/AS diagram. the examination.
policy on the equilibrium
level of national income Learners draw the AD/AS. Diagram and explanation.
36
Scheme of Work
and the level of real

output, the price level and
employment.
KC4
5.3 Monetary policy
Definition of monetary Use a video, to introduce the concept of monetary policy. Both of these videos explain well.
policy tools of monetary www.youtube.com/watch?v=uBaTPugw3M4
policy: interest rates, Set a worksheet with questions based on the video. www.youtube.com/watch?v=UAA6LavH-0U
money supply and credit Follow up with discussion.
regulations
Distinction between Explain, using one example, on PowerPoint or on the board, how Practise of AD/AS diagrams and resulting impact on income,
expansionary and changes in tax and/or government spending affects income, output output and employment is important for candidates to do well in
contractionary monetary and employment. Do this using AD/AS diagram. the examination.
policy
Learners draw the AD/AS. Diagram and explanation. Both of these videos explain well.
AD/AS analysis of the www.youtube.com/watch?v=uBaTPugw3M4
impact of expansionary Or Use a video, to introduce the concept of monetary policy. www.youtube.com/watch?v=UAA6LavH-0U
and contractionary
monetary policy on the Set a worksheet with questions based on the video.
equilibrium national
income and the level of Follow up with discussion.
real output, the price level
and employment
5.4 Supply-side policy
Meaning of supply-side Give definition of a supply-side policy. Mini whiteboards are good for this activity as learners are not
policy. worried about making mistakes.
Learners draw a AD/AS diagram and show effect supply-side policy
i.e. Increasing productivity and productive capacity
37
Scheme of Work
Think-Pair-Share – Why do governments use supply-side policy?

Learners write down these objectives in notes.
Tools of supply-side Think-Pair-Share – Learners think of ways that the government could
policy influence the supply-side of the economy.
From feedback, create a table, showing method and explanation.
AD/AS analysis of the Explain, using one example, how the use of a supply-side policy Practise of AD/AS diagrams and resulting impact on income,
impact of supply-side affects income, output and employment. Do this using AD/AS output and employment is important for candidates to do well in
policy on the equilibrium diagram. the examination.
national income and the
level of real output, the Learners draw the AD/AS. Diagram and explanation.
price level and
employment
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 17 – Partnerships for the Goals
38
Scheme of Work
6. International economic issues (AS Level)

6.1 The reasons for international trade
The distinction between Recap the principle of opportunity cost from the first AS unit. Then This is a good place to show learners how to use production
absolute and comparative ask learners why they think international trade takes place and list possibility curves to show the gains from trade.
advantage. the main reasons on the board.
www.tutor2u.net/economics/revision-notes/a2-macro-pattern-
Benefits of specialisation Watch the video on Tutor2u. international-trade.html
and free trade.
Hand out a pre-prepared worksheet with numerical questions on Questions should require learners to:
KC1 absolute and comparative advantage similar to the ones in the video. • determine which country should specialise in which product
KC2 Work through one example with class. (I)(F) • explain the effect on total output after specialisation
• show how relative opportunity costs can be used to
Conclude with a class discussion whereby learners identify goods determine an exchange rate that will acceptable to both
from their country that might have a comparative advantage, and countries
explain why. • show that there will be a net increase in world output after
Conclude with a class discussion whereby learners identify goods specialisation and exchange.
from their country that might have a comparative advantage, and
explain why.
Exports, imports and the Give the class a: If necessary, recap here the meaning of index numbers and
terms of trade: • definition of the terms of trade show how to use them to calculate percentage changes.
• Measurement of the • formula to measure the terms of trade using price indices.
terms of trade The terms of trade is one of the most commonly misunderstood
Hand out a pre-prepared worksheet with questions requiring learners parts of the AS Level syllabus and is frequently confused with
to calculate the terms of trade over a particular time period. the balance of trade.
• Causes of changes in Hand out a prepared worksheet containing a list of factors, some of
the terms of trade which affect the value of the terms of trade, some of which don’t.
Learners:
• decide which factors will impact on the terms of trade and which
factors will not
• provide supporting explanations for their choices.
39
Scheme of Work
Follow with a class question and answer session so learners can

explain and discuss their choices. Summarise the discussion and
produce a definitive list of relevant factors on the board.
Impact of changes in the Hand out a case study based on a country’s changing terms of It would be useful here to develop a pro-forma which you can
terms of trade trade, together with some questions for learners to answer. use to give structured feedback to each group on their
research and presentation.
Learners research the required information to answer the questions.
www.economicsonline.co.uk/Global_economics/Policies_to_pr
Follow with a class discussion to correct any errors. omote_development.html
In groups, learners: www.businesseconomics.com/country-data.html

• research their own or another allocated country’s changes in the
terms of trade over the last twenty years
• determine whether they have improved or deteriorated over this
period and whether they have been volatile or stable
• assess the implications for the future development of their given
economy.
Give a presentation to the class on their findings.
Limitations of the theories Think-Pair-Share –Learners put the theories into real life situation. This activity may need some structuring by the teacher to
of absolute and Direct them to consider what is not realistic about the model. prompt learners into thinking.
comparative advantage
Draw a spider diagram on board, and learners copy into their notes.
6.2 Protectionism
Meaning of protectionism Discuss why governments might intervene in international trade. Ensure learners can clearly define the term ‘protectionism’.
Matching Game. Learners match key term (reason) to brief www.tutor2u.net/economics/revision-notes/as-macro-

explanation international-trade.html
• safeguard employment
40
Scheme of Work
• address a balance of payments deficit www.economicsonline.co.uk/Global_economics/Trade_protectio

• prevent exploitation of cheap labour nism.html
• prevent ‘dumping’ of cheap goods to destabilise competition
• safeguard fledgling industries.
Check answers.
Tools of protectionism Identify the key methods of protectionism -spider diagram/ list on The key methods of protectionism to cover are:
and their impact board. • tariffs
• import quotas
Learners watch the presentation on trade and protectionism on the • export subsidies
Tutor2U website and take notes. • embargoes
• excessive administrative burdens (‘red tape’).
Learners write the impact of each method in solving (e.g.) a balance
of payments deficit in their own country www.tutor2u.net/economics/reference/protectionism
Arguments for and Start with a class debate in which groups use the information For the debate, allocate the groups a different side to argue
against protectionism prepared in the previous activity to argue the case for and against for.
protectionism.
Give learners headings and a word limit to write their report to
Follow with a class discussion to ensure the key points for and and make sure they focus on each of the reasons and
against protectionism have been covered. methods covered in the previous two activities. Also
emphasise that the reports should be concisely written and
Then learners write a report on the relative importance of the supported with evidence.
identified arguments for protectionism in relation to their own
country’s economy. www.tutor2u.net/economics/revision-notes/a2-macro-
protectionism.html
Progress check – Consolidate learning of this topic by setting a question which You could precede this with a short pre-prepared class quiz on
protectionism includes protectionism from a Paper 2 pre 2023 as a timed class test. protectionism to ensure learners grasp the key points.
Cambridge specimen papers and accompanying mark

schemes are available at
41
Scheme of Work
6.3 Current account of the balance of payments
Components Give learners a copy of their own current account and a set of www.businesseconomics.com/country-data.html
of the current account. questions relating to these accounts.
Learners individually or in groups research and write down

answers. The questions should include:
• What constitutes goods?
• What constitutes services trade?
• How do changes in these affect the balance on the current
account?
Go through the answers and lead a discussion on the findings.
Calculation of Produce a worksheet with calculation questions. Tutor2u.net has an www.tutor2u.net/economics/reference/current-account-of-the-

components of current example of a calculation. This could take the form of a table to balance-of-payments
account complete.
Calculations can be practised by using multiple-choice
questions from past papers.
Causes of imbalances in Learners research the causes of imbalances for each component in Remind learners that an imbalance can cause a surplus as well
the current account the current account using source material from textbooks and the as a deficit.
web links provided, making notes on the explanations they find.
www.economicshelp.org/blog/185/economics/balance-of-
Class discussion to review learners’ findings, summarising the key payments-disequilibrium
factors on the board. Move the focus of the discussion to look at the
current account situation in the learners’ own country and www.businesseconomics.com/country-data.html
encourage them to discuss possible causes.
In pairs:
• one learner states a cause of an imbalance on the current
account
• the other explains which part of the account would be affected
and why
42
Scheme of Work
• at the end of the exercise they discuss answers and review any
that were incorrect.
Consequences of Put two partially completed mind maps on the board: Use this opportunity to remind learners of the benefits of mind
imbalances in the current • one linking a current account imbalance to variables relating to maps, e.g.:
account for the domestic the domestic economy, e.g. economic growth and • a good revision tool
and external economy. unemployment • creative thinking and working
• the other linking the imbalance to variables relating to the • consolidating skills through ‘learning by doing’.
external economy, e.g. exchange rate and foreign reserves).
Encouraging learners to look at past papers (pre 2023) and
Learners, in pairs, complete the missing links on each mind map. structure their own questions in the same way as the data
response questions is a useful way of developing exam skills
Hand out an up-to-date newspaper article commenting on the and subject confidence.
consequences of a continuing imbalance of the current account read
the article individually www.economicsonline.co.uk/Global_economics/The_balance_
• work in groups to produce a set of data response questions of_payments.html
based on the article
• exchange these with another group and attempt to answer each www.economicshelp.org/blog/5776/trade/uk-balance-of-
other’s questions. payments
Summarise the key consequences with the class afterwards. www.businesseconomics.com/country-data.html
Reinforce learning by setting Question 1d from Specimen Paper 2

(2023) and/ or Question 5a from the same paper. Learners mark
each other’s work using the mark scheme.
Progress check – balance To consolidate learning on balance of payments, set learners a Choose an appropriate range of multiple choice (Paper 1) and
of payments selection of questions about the balance of payments accounts data response/essay (Paper 2) questions to help learners
from past papers (pre 2023). develop their exam skills.
6.4 Exchange rates
43
Scheme of Work
Definition of exchange rate. Explain that exchange rate is the price of a currency in terms of www.tutor2u.net/economics/revision-notes/a2-macro-
another currency. exchange-rate.html
Determination of Explain that in a free market the exchange rate is determined by Stress that the exchange rate between two currencies will have
exchange rates market forces. Therefore, the equilibrium exchange rate is a tendency not to change when there is equilibrium between
determined by supply and demand in the same way as a commodity them.
KC3 and occurs when demand and supply equate.
The Business Economics link is one good starting point for
Hand out pre-prepared data tables showing amounts of a currency economic data on a range of countries.
supplied/demanded at different prices. Learners:
• plot graphs of supply and demand for the currency www.tutor2u.net/economics/revision-notes/a2-macro-
• identify the equilibrium price (exchange rate). (I) exchange-rate.html
Follow with a class discussion on the concept of a floating exchange

rate. To ensure full understanding, learners give examples of factors
which might shift the supply/demand for currency in a floating rate
system.
Distinction between Give the class definitions of appreciation and depreciation. Ensure that learners understand the terms and how they
depreciation and occur.
appreciation of a floating Give learners a list of factors which might shift the supply/ demand
exchange rate curves for currency. In each case, the learner writes down: • which
curve will be affected by the change in the given factor • the
direction in which the shift occurs • whether this will lead to
appreciation or depreciation. (F)(I)
It is important to emphasise that the depreciation/ appreciation of a

currency relates only to floating exchange rate regimens where
changes are driven by market forces.
Causes of changes in a Learners consider what factors would affect the demand for a Note: This is market demand and supply diagram.
floating exchange rate: currency and the supply of a currency.
demand and supply of the For the graph work, remind learners:
currency From feedback, list factors on the board. Give explanation. • a movement along the curve is caused by a change in the
price of currency (exchange rate)
44
Scheme of Work
Learners draw a D&S diagram, to show the changes in the factors, • a movement of the whole curve is caused by changes in
e.g. Show the effect of an increase in interest rates. other factors, such as interest rates.
AD/AS analysis of the Give learners a worksheet (or write questions on board) with Practice of drawing AD/AS diagrams is good for examinations.
impact of exchange rate different scenarios (causes of changes in demand and/or supply of
changes on the domestic currency).
economy’s equilibrium
national income and the Learners show the effect of this on an AD/AS diagram, with the
level of real output, the explanation.
price level and
employment.
KC3
6.5 Policies to correct imbalances in the current account of the balance of payments.
Government policy Think-Pair-Share – ‘Why do governments aim for stability on current

objective of stability of the account?’
current account
Write feedback on board.
Effect of fiscal, monetary, Divide the class into six groups as follows: For the group task, give each group the same imbalance of
supply-side and • The first three groups are allocated one of the three policies current account background information to make the end
Protectionist policies on (fiscal, supply side, monetary) each and work out how it could be comparison easier.
the current account. used to solve an imbalance on the current account.
• the remaining groups are also allocated one of the three policies Stress in the final discussion that the first set of groups
KC6 each, and they evaluate the proposed policy developed by their analysed the issue (looked at how variables can be used to
partner group. predict different outcomes and so develop a policy) and the
second set evaluated that policy (reached a conclusion or
Finish by summarising the results and show how the work of the judgement on its effectiveness based on supporting evidence).
two sets of groups (analysis and evaluation) links together as the
two key components of policy development and improvement. www.tutor2u.net/economics/revision-notes/as-macro-balance-
of-payments.html
45
Scheme of Work
7. The price system and the macroeconomy (A Level)

7.1 Utility
Definition and calculation Start the lesson by introducing and defining utility.
of total utility and marginal
utility Produce a worksheet with calculation questions on both total and
marginal. A table for learners to complete would be a good way of
KC2 doing this.
Equi-marginal principle Learners individually or in pairs research and produce a short It is important to emphasise that the aim of rational consumers
report or on what is meant by the ‘equi-marginal principle’ and how is to maximise their utility or satisfaction, given a limited
KC1 it is linked to the derivation of a market demand curve. income, a given set of prices and constant tastes and
preferences. The equi-marginal principle shows the
Go through with the class. relationship between marginal utility and price for a number of
different products, and learners need to understand the
implications of any changes in the prices of the products and
the significance of the Marginal-Utility-to-Price Ratio MU/P
formula.
Derivation of an individual In pairs or groups, learners identify and discuss different examples of The shape of a normal demand curve can be explained by the
demand curve where marginal utility or satisfaction may decline as more units of a law of diminishing marginal utility because the marginal utility
good are consumed – ice-cream, hamburgers or bars of chocolate curve for a product is the same as its demand curve,
KC1 are good starting examples. measured in money terms.
To ensure learners understand the link between marginal utility and www.tutor2u.net/economics/revision-notes/as-markets-
the derivation of a market demand curve, set a written task to demand.html
distinguish between total utility and marginal utility. This can be
based on questions to build up understanding; or Question 3a from
Paper 4 Nov 2019
Learners assess their answers to further strengthen learning.
46
Scheme of Work
Limitations of marginal In pairs or groups, learners look at how realistic the idea of rational This is a new topic, and it recognises that advertising and
utility theory and its consumer behaviour is. Learners think of potential limitations to marketing can help bring about significant changes in
assumptions of rational marginal utility theory and to identify alternative behavioural reasons consumer tastes and preferences.
behaviour behind buying decisions, e.g. peer group pressure in the purchase of
branded products, developing their ideas into a short presentation. Emphasise that the law of diminishing marginal utility does
have a number of limitations, such as the assumption that
Each group gives their presentation to the class and answers satisfaction can be easily measured or consumers always act
questions to share and consolidate learning. in a rational way. Explain this is why the idea of rational
behaviour by consumers is challenged by behavioural
economic models.
7.2 Indifference curves and budget lines
Meaning of an Introduce the concept using the video from tutor2u.net www.tutor2u.net/economics/reference/indifference-curves-
indifference curve and a Learners make notes. and-consumer-equilibrium
budget line Discuss notes and main points from the video.
Causes of a shift in the Think-Pair-Share – Show learners a diagram with shifts in the budget
budget line line. Ask what would cause the shifts.
Income, substitution and Explain the income and substitution effects of price changes of Introduce indifference curves and budget lines.
price effects for normal, various types of goods. Learners watch the video (above) Economicshelp.org have good notes.
inferior and Giffen goods
Consolidate understanding by setting the following as a class test or Learners self- or peer-assess their answers to further
KC1 homework: strengthen learning.
KC2 • short questions requiring learners to redraw budget curves and
describe the income substitution and price effects resulting from
given changes
• an exam-style question to apply this knowledge, such as “Explain
whether demand schedules and budget lines are similar in the way
that they represent the effect of (i) a rise in the price of a good and
(ii) a rise in a consumer’s income”.
Limitations of the model of Think-Pair-Share – Learners consider the limitations.

indifference curves
Write responses on board.
47
Scheme of Work
Progress check – law of To consolidate learning of this topic, set Question 4a from Paper 41 This gives learners the opportunity to demonstrate their
diminishing marginal Nov 2019 as a class test or homework. (I)(F) understanding of marginal utility and equi-marginal utility, as
utility, indifference curves well as indifference curves.
and budget lines
7.3 Efficiency and market failure
Definitions of Productive Introduce the concepts of productive and allocative efficiency using Allocative efficiency occurs where price is equivalent to
and allocative efficiency the videos in the supplied website link. marginal cost (P=MC).
KC5 Consolidate understanding by setting questions to encourage Productive efficiency can be shown through a firm’s average
learners to think about the different types of efficiency and help them cost curves or through a production possibility curve.
Conditions for productive understand the key concept of equilibrium and efficiency.
and allocative efficiency Include questions which enable learners to use production
Reinforce learning by putting learners into pairs to peer assess each possibility curves. Stress the distinction between a position
other’s responses. within the curve and a position on the curve – any position on
Each pair shares its ideas with the class. the curve will show a situation of productive efficiency.
economic-efficiency.html
Progress check – To help reinforce learning, set multiple choice questions from past This progress check also provides a value opportunity to
productive and allocative papers pre 2023. formatively assess learner progress at the start of the A
efficiency Level year.
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 1–17
Pareto optimality Introduce the theory of Pareto optimality. As the name indicates, Also known as Pareto efficiency, this idea was first put forward
Pareto efficiency/optimality is another example of efficiency. by Vilfredo Pareto in 1909. It is based on the existence of a
KC5 situation when it is not possible to reallocate resources to
To develop learners’ understanding of how this idea relates to the make someone better off without making someone else worse
concept of economic efficiency, put them into groups and give them a off.
real context together with the relevant background. The groups
48
Scheme of Work
discuss Pareto optimality in this context and on conclusion share their www.tutor2u.net/economics/revision-notes/as-marketfailure-
ideas with the class. economic-efficiency.html
Definition of Explain that dynamic efficiency is concerned with improving the Dynamic efficiency is an important part of the concept of
Dynamic efficiency efficient allocation of resources over a period of time. efficiency. By focusing on the efficiency of the allocation of
resources over a period of time, it contrasts to the static
Think, Pair and Share: come up with ideas on how efficiency could be efficiency measures of productive efficiency and allocative
improved over a period of time in various aspects of production. efficiency.
Give each group a different example to focus on, such as: www.tutor2u.net/economics/revision-notes/as-marketfailure-
• new/improved methods of production economic-efficiency.html
• invention/innovation, research and development and
new/improved products
• new/improved methods of management
• investment in human capital to improve productivity levels.
Definition of market failure Learners write a paragraph to explain how markets allocate scarce This is revision from AS Level.
resources.
KC6 Market failure occurs when the market system fails to
Think-Pair-Share – Learners consider situations when the free market allocate an efficient allocation of resources.
doesn’t allocate scarce resources. Consolidate by explaining that this
is market failure.
Reasons for market failure Explain how the free market fails to deliver an efficient allocation of www.tutor2u.net/economics/revision-notes/as-marketfailure-
resources. Learners identify sources of market failure from AS course. market-failure.html
KC5 The reasons for such failure include:
• under-consumption of merit goods
• over-consumption of demerit goods
• non-provision of public goods.
Then introduce the other situations of market failure to be covered in

the A Level examination.
Progress check – reasons To consolidate learning, set MCQs from paper (pre 2023) as a Give learners as much opportunity as possible to answer
for market failure class or homework assignment. exam-style questions and past questions as the A Level year
progresses.
49
Scheme of Work
As some learners can find market failure quite a dry topic, consider
the two revision quizzes on the Tutor2U website as a useful The two quizzes provide a more informal way for learners to
additional way of recapping this topic. test their understanding of this topic.
www.tutor2u.net/economics/quizzes/as/marketfailure1/quiz.ht
ml
www.tutor2u.net/economics/quizzes/as/marketfailure2/quiz.ht
ml
7.4 Private costs and benefits, externalities and social costs and benefits
Definition and calculation Give learners the opportunity to think about the concept of social It is important to emphasise that social costs are the sum of
of social costs (SC) as the costs in a variety of different contexts so they understand how to private costs and external costs, and that external costs are
sum of private costs (PC) apply it to real-world situations. therefore only one part of social costs.
and external costs (EC),
including marginal social To develop this further, learners focus on a specific context and You may structure the first group task as a peer mentoring
costs (MSC), marginal questions on the social costs generated by e-waste. Learners work exercise where learners work together to discuss appropriate
private costs (MPC) and together to look at the market failure, private costs, external costs examples.
marginal external costs and alternative ways to deal with the e-waste.
(MEC). The second group task enables learners to appreciate the
In groups, learners are allocated a particular project in their country, significance of social costs in relation to real-world examples
KC3 such as the building of a road or bridge, the construction of an in their own country.
KC5 additional runway at an airport or the construction of a new railway
line. Learners list the private costs and the external costs of that www.tutor2u.net/economics/revision-notes/as-marketfailure-
project and use this to consider the resulting social costs. negative-externalities.html
www.s-cool.co.uk/a-level/economics/
market-failure/revise-it/externalities
Definition and calculation As a follow-on from the previous activity, each group lists the private Stress that social benefits are the sum of private benefits and
of social benefits (SB) as and external benefits of the project they have been looking at and use external benefits, and that external benefits are therefore only
the sum of private this to consider the resulting social benefits. one part of social benefits.
benefits (PB) and external
benefits (EB), including Each group feeds back its findings to the class as the basis for wider
marginal social benefits discussion and consolidation.
50
Scheme of Work
(MSB), marginal private As with the previous activity, this task enables learners to
benefits (MPB) and appreciate the significance of social benefits in relation to
marginal external benefits real-world examples from their own country.
(MEB)
positive-externalities.html
market-failure/revise-it/externalities
Definition of positive Explain the concepts of each type of externality using diagram notes. An externality arises if a third party is affected by the actions
externality and negative and behaviour of others, giving rise to a spill-over effect.
externality Learners give examples of real-life externalities from given markets,
e.g. Smoking, congestion, pollution in manufacturing, vaccinations. Stress that positive and negative externalities can exist both in
Definition and calculation relation to production (i.e. firms) and consumption (i.e.
of social benefits (SB) as Revision videos by Tutor2u could be used. learners take notes/ set consumers).
the sum of private questions related to video.
benefits (PB) and external www.tutor2u.net/economics/revision-notes/as-marketfailure-
benefits (EB), including Note: Do each type of externality one at a time. positive-externalities.html
marginal social benefits
(MSB), marginal private www.tutor2u.net/economics/revision-notes/as-marketfailure-
benefits (MPB) and negative-externalities.html
marginal external benefits
(MEB)
Deadweight welfare Show a diagram of negative externalities. Identify the area od This gives learners a chance to reproduce the externalities
losses arising from deadweight loss. Explain what deadweight loss is. Learners draw the diagrams.
positive and negative diagrams for the other forms of externalities and shade the area of
externalities. deadweight loss.
KC3
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 11 – Sustainable Cities and Communities
Asymmetric information To explain this concept, use a case study such as the insurance Additional notes are found here:
and moral hazard market. Using Q&A, learners consider whether all parties have the
51
Scheme of Work
same information and whether insurance encourages people to www.tutor2u.net/economics/reference/information-economics-

behave in a riskier manner. Can then apply to other situations. moral-hazard-and-adverse-selection
Progress check – positive To consolidate learning of positive and negative externalities, set This question gives learners the opportunity to use a diagram
and negative externalities Question 2 from Specimen Paper 4 (2023) in analysis.
Use of cost-benefit Give learners a context for a cost benefit analysis Real project contexts are a highly effective way for learners to
analysis in decision-making develop their knowledge and understanding of how cost-
Learners, in pairs or groups, focus on a project in their own country benefit analysis can be applied to economic decision-making.
such as:
• subsidies on biofuels An example from learners’ own country would be good.
• greater competition in markets, such as the postal service
• the reduction of income and wealth inequality, such as through a
minimum wage or an increase in the top rate of income tax
• the introduction of carbon trading to reduce CO2 emissions
• a major infrastructure project, such as building a new motorway
• relaxing planning controls on the building of new houses
• building a flood-relief scheme
• constructing a new power station
• producing genetically modified food.
Each group then researches the necessary information for their

project and write a report on the extent to which cost-benefit analysis
can be applied and what it implies. Learners report back to the class
as the basis for wider discussion and consolidation.
Conclude by setting questions relating to cost-benefit analysis. (I)
Learners then peer-assess each other’s responses in pairs or small

groups to share and consolidate learning.
Progress check – cost- To consolidate learning of this topic, set the following questions as a Both of the questions provide the opportunity to assess
benefit analysis class test or homework. learning from the whole topic.
• Question 2 from Paper 41 Jun 2020
• Question 2 from Paper 42 Mar 2020
52
Scheme of Work
7.5 Types of cost, revenue and profit, short-run and long-run production
Short-run production Class discussion and use the textbook and website references to Stanlake, G, Grant S J Stanlake’s Introductory Economics
function: fixed and help ensure that learners understand the difference between fixed Longman, 2000 ch 37 is a useful source of questions for the
variable factors of and variable factors of production. group task.
production
In pairs, learners answer questions you set on the distinction www.tutor2u.net/economics/revision-notes/as-marketfailure-
between fixed and variable factors of production. Learners self- or productioncosts.html
peer-assess their answers.
Definition and calculation With the use of a numerical example, explain each type of product Make sure learners clearly understand the distinction between
of total product, average and it is calculated. these different types of data, and that the marginal product
product and marginal curve cuts the average product curve at its highest point.
product In the form of a table, learners fill in the table using calculations.
The marginal product refers to the additional output produced
KC2 Learners plot their results on graph paper. by employing another unit of a variable factor, such as an
additional worker.
productioncosts.html
Short-run production Class discussion and use the textbook and website references to The law of diminishing returns is an important topic. Also
function – law of help ensure that learners understand the law of diminishing returns. known as the law of variable proportions or the law of
diminishing returns diminishing marginal returns, it states that when additional
To consolidate learning, set class or homework questions that units of a variable factor of production are added to a fixed
KC2 require learners to: factor of production, the additions to total output will begin to
• use and apply the law of diminishing returns diminish.
• demonstrate the difference between diminishing marginal
returns and diminishing average returns
Short run cost function- Think-Pair-Share – Learners consider the things a business has to
calculation of fixed costs pay for when running a business. Write responses the board. Now
and variable costs give definition of the two types of costs. Learners categorise each of
the items on the list into fixed and variable.
53
Scheme of Work
Definition and calculation With the use of a numerical example, explain each type of product Stress that the shape of the average cost and marginal cost
of total, average and and it is calculated. curves is determined by the law of diminishing returns.
marginal costs (TC, AC,
MC), including average In the form of a table, learners fill in the table using calculations. Encourage learners to practise drawing and labelling diagrams
total cost (ATC), total and in this topic as much as possible, as it is an important exam
average fixed costs (TFC, Learners to plot their results on graph paper. skill.
AFC) and total and
average variable costs With the graph, explain the shape of the SRAC and the marginal
(TVC, AVC cost curves.
KC2
Long run production Think-Pair-Share – Learners consider what will happen to output
function when all factors are variables.
KC4 Illustrate answers on a diagram showing the different returns to

scale.
Long-run cost function: Lead a class discussion and use the textbook and website The long-run average cost curve is described as an ‘envelope
the shape of the Long- references to ensure that learners understand the meaning of the curve’ because it is made up of the points of tangency of a
Run Average Cost long-run cost function and can explain the shape of the Long-Run number of short-run average cost curves along its length.
(LRAC) curve Average Cost (LRAC) curve.
Demonstrate on diagram the concept of minimum efficient scale. productioncosts.html
Consolidate learning on the LRAC curve and the difference

between this and the SRAC curve by setting questions for
learners to answer individually or in pairs.
Relationship between Use data example in order for leaners to understand the concept of Returns to scale indicates the relationship between the level of
economies of scale and returns to scale and of the relationship between economies of scale output by a firm and the quantity of inputs required to produce
decreasing average costs and decreasing costs. Ensure that they also appreciate the that output. Where the output can be increased using
distinctions between increasing returns to scale, constant returns to proportionately fewer inputs, as with increasing returns to scale,
KC4 scale and decreasing returns to scale. this will lead to decreasing costs of production.
54
Scheme of Work
Consolidate learning by setting questions for learners to answer Learners sometimes confuse returns to scale with economies of
individually or in pairs. (I)(F) scale. The first refers to changes in output, whereas the second
refers to changes in the average cost of production – i.e. one
measures output and the other measures costs.
www.tutor2u.net/economics/revision-notes/a2-micro-
economies-diseconomies-of-scale.html
Internal and external Introduce concept of economies of scale. Internal economies of scale are the cost advantages gained
economies when a firm grows in size. External economies of scale are the
of scale and diseconomies Using website or textbook learners identify types of economies of cost advantages gained to all firms as a result of
of scale scale a firm can achieve. developments in an industry as a whole, outside of any one
particular firm. Diseconomies are the cost disadvantages to all
KC4 Use case study examples where learners identify how firms have firms resulting from both these scenarios.
KC5 achieved lower costs as output increases.
This link has case study examples of economies of scale.
Explain that sometimes that costs can rise (diseconomies of scale). www.tutor2u.net/economics/blog?q=economies+of+scale
Think-Pair-Share – why this might be the case.
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 7 – Affordable and Clean Energy / SDG 9 – Industry, Innovation and Infrastructure
Progress check – short- To consolidate learning of this topic multiple-choice questions from This will reinforce understanding of the key short- and long-run
run and long-run past papers components and their distinctions.
production function
Revenue: total, average Define the terms. Give a numerical example (table) which learners Total revenue is the total amount of money received from the
and marginal complete to calculate the revenues. sales of a product. Average revenue is the total revenue
KC2 obtained from the sales divided by the number of units of the
As these three concepts are commonly confused, consolidate product sold. Marginal revenue is the extra revenue obtained
learning by setting questions requiring learners to distinguish from the sale of an additional unit of a product.
between these three types of revenue.
The importance of the concept of the margin is again brought
into focus here – stress the importance of the margin wherever
possible in your teaching.
www.tutor2u.net/economics/revision-notes/a2-micro-business-
revenues.html
55
Scheme of Work
Profit – normal and Teacher-led explanation. Tutor2U has presentation to help explanation
abnormal (supernormal)
Consolidate learning by setting questions requiring learners to: Stress the distinction here between normal profit and abnormal
KC4 • apply their understanding of profit to a particular industry profit:
• demonstrate their understanding of the difference between • profit is the difference between total revenue and total costs
normal and abnormal (supernormal) profit. • normal profit refers to that level of profit that a firm requires
to keep operating in a particular industry
• abnormal or supernormal profit is the level of profit that is
over and above normal profit.
profits.html
costs-and-revenues/revise-it/profit
7.6 Different market structures
Perfect competition and Use a diagram to illustrate the spectrum of competition. On the
imperfect competition: spectrum, put points to show: monopoly, monopolistic competition,
oligopoly, natural monopoly
The structure of markets as Explaining to the class that markets can structured by a number of In the class discussion, it is important that learners understand
explained by number of different factors, e.g. the: how different market structures can be distinguished through a
buyers and sellers, nature • number of buyers and sellers in the market range of different features.
of product, degree of • nature of the product
freedom of entry and the • degree of freedom of entry into, and exit from, the market
nature of information • nature of information.
Learners categorise markets in their own country by the above

features.
Barriers to entry and exit. Provide learners with a case studies of monopoly or oligopoly Matching terms to explanations if a quick way of moving
business in their country. through straightforward theory.
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Scheme of Work
Learners consider how these businesses maintain their high levels of A PowerPoint can be used and learners copy the information
profit. Identify the barriers to entry. (if photocopying is not available).
Give learners a worksheet to match up definitions of barriers to their

explanation.
Concentration ratio In pairs or groups, give each group a different industry. Learners Ensure here that learners understand:
research the concentration ratios for their particular industry and • what is meant by the concentration ratio of a certain
prepare a presentation for the class on what they discover. number of firms in one industry compared to another
• this concentration ratio will be a good indication of the
After the presentations, have a class discussion and feedback to degree to which the industry is close to the oligopoly or
compare and contrast the findings of each industry looked at. monopoly market structure.
Follow this up with a more detailed look at a suitable case study on a

particular industry.
Perfect competition Give key features of market structure. It is very important that learners know how to draw accurate and
clearly labelled diagrams for this topic.
KC5 Explain, with the aid of drawing diagrams on the board the different
equilibrium positions, both short run and long run. www.tutor2u.net/economics/revision-notes/a2-micro-perfect-
competition.html
Learners explain/ consider why a perfectly competitive firm can only
achieve abnormal profits in short run. Set questions which require learners to practice drawing and
labelling these diagrams accurately. (I)
Set questions to help learners develop their understanding of this
important distinction. (I)(F)
Imperfect competition – Learners individually or in pairs research some examples of It is important to emphasise how monopoly is distinct and
monopoly monopoly in their own country. They share their findings with the differs from perfect competition. These are at the two opposite
class. extremes of possible market structures and it is important that
KC4 learners understand the key differences.
KC5 Give diagram. Learners consider why the monopolist can earn
abnormal profits (barriers to entry). The website links provided are a useful starting point for the
initial research task.
Consolidate learning by setting questions on monopolies and the
contrast between perfect competition and monopoly.
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Scheme of Work
Extension activity: To add further challenge and stretch learners, monopoly.html
include questions requiring learners to contrast perfect competition
and monopoly. www.s-cool.co.uk/a-level/economics/
market-structure-1/revise-it/monopoly
market-structure-1/revise-it/the-costs-and-benefits-of-monopoly
Imperfect competition – Using the suggested internet links, learners identify and discuss Monopolistic competition combines elements of both perfect
monopolistic competition examples of monopolistic competition in their own country. competition and monopoly.
Each group/pair feeds back to the class. Ensure in this discussion Ensure that learners know how to use the terms ‘monopoly’
that learners can identify which elements of monopolistic competition and ‘monopolistic competition’ correctly and how to make it
are similar to the situation in perfect competition and which more clear which type of market structure they are referring to with
closely resemble the situation in a monopoly. each.
Consolidate learning by setting questions to ensure learners www.s-cool.co.uk/a-level/economics/

understand the key features of monopolistic competition and market-structure-2/revise-it/monopolistic-competition
appreciate how it is distinguishable from other types of market
structure. (I)
Learners self or peer-assess their answers.
Imperfect competition – Learners individually or in groups research examples of oligopolies in An oligopoly can be defined as an imperfect market consisting
oligopoly their own or another specified country and identify what the key of a few large firms. It has a number of features that make it
features of the market structure are. distinctive from other market structures, such as the concept of
the kinked demand curve (see the Other Objectives of a Firm
Discuss findings as a class. below for more teaching content on this).
Consolidate learning by setting questions requiring learners to Ensure here that learners fully understand the
demonstrate their understanding of oligopoly in relation to a interconnections of firms operating in an oligopolistic market
number of firms, such as newspaper publishers. structure, such as when there is a cartel arrangement.
www.tutor2u.net/economics/revision-notes/a2-micro-oligopoly-
overview.html
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Scheme of Work
market-structure-2/revise-it/oligopoly
Imperfect competition – Give groups of learners an industry that operates through natural A natural monopoly will occur where there are potentially large
natural monopoly monopoly (e.g. water supply companies). Groups research their economies of scale to be gained by having just one firm in an
allocated industry and identify the potential advantages of the industry. A wasteful duplication of resources can be avoided,
natural monopoly that operates. leading to cost reductions.
Each group reports its findings to the class. Use this as the basis for This activity provides a good opportunity for peer mentoring
a wider class discussion on natural monopolies to ensure learners where learners share, feedback and improve each other’s
understand that they exist when the advantages of such a work.
monopoly are likely to be greater than the disadvantages, such the
reduction in costs by not duplicating expensive infrastructure.
As a follow-up, put learners back into their groups to find out if there
are any examples of a natural monopoly in their own country, and
what the underlying advantages and disadvantages are.
Contestable markets and Watch video/ presentation on Contestable Markets. Follow with: It is important to emphasise that the key aspect of contestable
their implications Class discussion to help ensure that learners understand markets is not the entry of firms into an industry, but the threat
contestable markets. In particular, ensure learners focus on: of such an entry.
• what is likely to influence entry into, and exit from, an industry
• the factors that make a market more or less contestable. www.tutor2u.net/economics/revision-notes/a2-micro-
contestable-markets.html
To consolidate learning, provide a case study of a market within own
country. Learners consider the extent to which this market is a www.s-cool.co.uk/a-level/economics/market-structure-2/revise-
contestable market. (F) it/contestable-markets
Comparisons of To help learners understand how to compare the performance of X-inefficiency occurs when a firm has little incentive to control
performance of firms different firms, in pairs or groups learners research the following costs due to a lack of competitive pressure.
nine methods:
• revenue
• output
• profits
• efficiency and x-inefficiency in the short run and long run
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Scheme of Work
• barriers to entry and exit

• price competition
• non-price competition
• collusion.
Each group produces a One-Page profile which shows how the

performance of firms can be compared by these methods. Use this
as the basis for a class discussion on these methods to consolidate
learning.
Collusion and Prisoner’s Begin with a class session on the variety of behavioural analysis The Prisoner’s Dilemma approach refers to a game where
Dilema approaches to decision-making in a firm. Then to enable learners to neither player knows the strategy of the other player. This is
apply this understanding, introduce the following tasks one at a worse than if they had known the strategy of the other player as
time. it means they cannot coordinate their strategies.
Start with the Prisoner’s Dilemma approach: A Two-player Pay-off Matrix shows the outcomes of a game
• give each learner appropriate background information on a for the players given different possible strategies.
different business and ask them to individually take decisions
about what would be best for their business without knowing The kinked demand curve in oligopoly is an example of the
what anybody else’s business is planning (I) interdependence between firms in an industry. The kink is
• learners share their individual strategies and work in pairs or caused by two assumptions:
groups to rethink now they know the plans of other businesses • if a firm decides to increase its price, the other firms in the
and decide whether to change their plans in coordination with industry will not follow
others • if a firm decides to decrease its price, the other firms will
• class discussion. follow.
Then move on to look at the Two-player Pay-off Matrix approach: This means the first assumption leads to price elastic demand,
• put learners into pairs and tell them each person is representing while the second leads to price inelastic demand.
one firm in a given industry (i.e. the industry is a duopoly)
• tell each learner that the firm they represent has two strategies: it One interesting aspect of the kinked demand theory, in terms
can either raise the price of a product or leave it unchanged of the margin, is that the marginal revenue curve is
• learners then construct a matrix which shows the payoffs that discontinuous. Stress this in your teaching of the kinked
result from the interaction of strategies by the two firms. demand curve so learners understand why.
Finally, look at the kinked demand curve in an oligopoly: www.tutor2u.net/economics/revision-notes/a2-micro-oligopoly-

game-theory.html
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Scheme of Work
• hold a class discussion to ensure learners understand the nature

of the kinked demand curve and the interdependence between www.tutor2u.net/economics/revision-notes/a2-micro-oligopoly-
firms that underlies it overview.html
• consolidate learning on kinked demand curves by setting
questions. (I)(F) www.s-cool.co.uk/a-level/economics/
market-structure-2/revise-it/the-kinked-demand-curve-model
Conclude with a class discussion on behavioural approaches to
decision making and set further questions on the different aspects.
7.7 Growth and survival of firms
The reasons for different Think-Pair-Share – Learners draw up a list of reasons why small Ensure that learners understand why small firms continue to
sized firms firms continue to exist in an economy, focusing on examples from exist in an economy despite the potential advantages of large
their own country. firms and can identify the possible reasons for this.
Learners consider why some firms are large.

Invite someone who owns or works for a small firm to give the class
a talk on why it continues to exist despite the possible advantages
of large firms.
Set questions from Cambridge Past Paper as a class test or

homework.
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 9 – Industry, Innovation and Infrastructure
Internal growth of firms: Ask students to research examples of recent examples of internal Firms can grow internally and diversify by producing different
growth from their own country. products for different markets.
External growth Give definitions of types of integration using examples of business Methods of integration: – horizontal – vertical (forwards and
Methods of integration of international firms and national firms that have joint together. backwards) – conglomerate.
Reasons for integration Think-Pair-Share – Using the same examples in the above activity,
learners consider possible reasons for integration. From feedback,
write points on board. Learners write notes.
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Scheme of Work
Consequences of Mix and match. Give learners a list of mixed up advantages and The advantages and disadvantages can be put on a
integration disadvantages of integration. Learners categorise whether they are worksheet or displayed on a PowerPoint.
advantages and disadvantages by putting them into a table with two
columns.
Cartels Research activity. Learners to research OPEC. Direct learners to Ensure that learners understand that a cartel is a group of
consider the conditions for the cartel to work and the consequences firms which work together to limit output to keep prices higher
of a cartel on other producers and consumers. than they would otherwise be.
Learners record their findings as a report to discuss in class. Research activities can be set as a homework task.
Principal–agent problem Learners, in groups, focus on the implications that arise when The principal agent problem is an important area for learners
arising from differing ownership of a firm is divorced from control of the firm. Using the to focus on in relation to other objectives of a firm.
objectives of supplied internet links, each group identifies with examples the types
shareholders/owners and of situations that could arise when there is a difference between what When ownership and control of a firm are divorced, the owners
managers the principal might wish to see happen and what the agent actually (the principal) can never be certain that the people managing
does. the firm for them (the agent) are taking decisions (e.g. to
maximise profits) the principal would have taken.
Each group feeds back its findings to the class and discuss the www.tutor2u.net/economics/content/topics/buseconomics/prin
topic. cipal_agent.htm
www.tutor2u.net/economics/revision-notes/a2-micro-divorce-
ownership-control.html
Progress check – growth To consolidate learning of this whole topic, set Question from a past Cambridge past papers (pre 2023) and accompanying mark
and survival of firms paper (pre 2023) as a class test or homework. (I)(F) schemes are available at
7.8 Differing objectives and policies of firms
Assessment of the To ensure learners appreciate that profit maximisation has You might also find it useful here to recap the teaching activities
effectiveness of fiscal, traditionally been regarded as the main objective of a firm, divide on normal and abnormal profit in the Types of cost, revenue and
monetary and supply side the class into pairs or groups and each group produces a poster profit, section above.
policies to correct inflation listing the main reasons why this is the case.
and deflation The Tutor2U internet link provides one useful starting point for
Use the posters for a class discussion on profit maximisation. the initial group activity.
KC2
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Scheme of Work
Consolidate learning of this topic by setting question from www.tutor2u.net/economics/revision-notes/a2-micro-business-

Past paper: Paper 41 Nov 10 (I)(F) objectives.html
The traditional profit Recap elasticity. Learners, using diagrams, explain the relationship Ensure here that learners fully understand the relationship
maximising objective of a between elasticity and revenue between elasticity and revenue.
firm – relation between
elasticity and revenue Consolidate understanding by setting questions in relevant
business contexts that require learners to link price, cross- and
income elasticity of demand to possible increases in revenue. (I)(F)
Other objectives of a firm – Think-Pair-Share – Using examples of businesses in their country, Other objectives that a firm can have include:
survival, profit satisficing, learners consider the possible objective of each firm. • survival
sales maximisation, Choose examples that may include: • strategic
revenue of a business • a business that is currently battling for survival • satisficing
• a business that maybe growing (sales maximisation) • sales maximisation.
• a PLC (satisficing) www.tutor2u.net/economics/revision-notes/a2-micro-business-
objectives.html
Price discrimination Think-Pair-Share – To help develop understanding of price Price discrimination is where identical goods or services from
discrimination, and learners think of examples from their own the same provider are priced differently for different markets. It
experience, e.g. mobile phone free texts, train/bus ticket prices at can be a particular feature of monopolistic or oligopolistic
different times of the day or cinema tickets where adults and children markets where firms are less vulnerable to competitive pricing.
are charged differently for the same seats.
The group activity provides a good opportunity for peer
Each group shares its examples with the class and how they work mentoring.
as a form of price discrimination.
www.tutor2u.net/economics/revision-notes/a2-micro-price-
Ensure learners focus here on the conditions that are required to discrimination.html
allow for the existence of price discrimination in a market. www.s-cool.co.uk/a-level/economics/
market-structure-1/revise-it/price-discrimination
To consolidate learning, set questions on price discrimination. (I)(F)
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Scheme of Work
Other Pricing Policies: Outline each type of pricing policy. • Limit pricing is where a firm deliberately sets a price that is
limit pricing. low enough to deter new entrants from coming into a
Predatory Pricing Think-Pair-Share – Identify examples of each type of policy from market.
Price leadership own country. • Price leadership is where a price is set by a dominant firm
in an industry and the other firms in the industry tend to
Focus on oligopoly markets for examples. follow this lead.
Relationship between Give learners a worksheet with diagrams of a normal sloping

price elasticity of demand demand curve and a kinked demand curve. Put numbers of the
a firm’s revenue diagrams. Set questions for learners to calculate the firm’s revenue
at different output levels.
Draw from the activity that different elasticities produce different

revenues.
64
Scheme of Work
8. Government microeconomic intervention (A Level)
8.1 Government policies to achieve efficient resource allocation and correct market failure
Specific and ad valorem In pairs or groups, learners use the provided textbook and website Learners need to appreciate that:
tax links to: • indirect taxes and subsidies are policies to achieve efficient
• find examples of indirect taxes and subsidies in their country resource allocation and correct market failure
KC2 • discuss the effect of such intervention on prices, producing a • indirect taxes can discourage the consumption of certain
brief collaborative report on their findings products
• use this to produce a wall chart setting out the key points and • the provision of subsidies can encourage the consumption of
conclusions for the class to see. certain products.
Class discuss which each group presents its wall chart. Ensure all www.tutor2u.net/economics/revision-notes/as-marketfailure-
the key points are covered. indirect-taxation.html
producer-subsidies.html
Subsidies In pairs or groups, learners use the provided textbook and website Learners need to appreciate that the provision of subsidies
links to: can encourage the consumption of certain products.
KC4 • find examples of subsidies in their country www.tutor2u.net/economics/revision-notes/as-
KC6 • discuss the effect of such intervention on prices (using diagram) marketfailureindirect-taxation.html
producing a brief collaborative report on their findings
www.tutor2u.net/economics/revision-notes/as-
Class discussion. Ensure all the key points are covered. marketfailureproducer-subsidies.html
Prohibitions and licences In pairs or groups, learners: To help learners get the most from this activity, give them
• find out information about examples of prohibitions and licences guidance on where to obtain the information they need for the
in their own country country and policies they are looking at.
• consider the potential advantages and disadvantages of these
types of government intervention in the economy
• produce a collaborative report on the relative merits of this sort
of government intervention.
65
Scheme of Work
Each group gives a brief presentation to the class as the basis for a
wider discussion on the general impact on consumption.
Property rights Allocate groups of learners a different type of property rights where Owners of assets have a right to charge people who wish to
the ownership and ability to earn income from that property make use of those assets. The examples suggested in the
KC6 improves the general good, such as: activity relate to private property rights, but remember there
• fishing rights are also common property rights, e.g. in relation to air.
• forestry or other land rights
• national parks
• intellectual property rights.
Each group then selects a case study example for their type of
property right, preferably from their own country, and produces a
written report on the benefits and costs, property rights confer on the
owner and the users compared to common ownership. Write up
findings and report back to class.
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 14 – Life Below Water
Information Give groups of learners a different topic of interest to consumers, Information is important to achieving efficient resource
such as: allocation in an economy – a better-informed consumer is likely
KC6 • healthy eating/safe medicines to be able to exercise more influence in an economy.
• pensions
• cars The Tutor2U website link is a good starting place for this
• booking a holiday activity. The other two links website links provided are for the
• choosing a school/university UK, but each country is likely to have its own equivalent sites
• internet/mobile phone/TV services. showing areas where the government has intervened in the
provision of information to consumers.
Each group finds out:
• what sources of information are available in their own country www.tutor2u.net/economics/revision-notes/as-marketfailure-
(including but not limited to government and NGO websites) imperfect-information.html
• how easy it was to find the information (e.g. how many steps,
www.ons.gov.uk
how much has the government had to intervene itself)
66
Scheme of Work
• how the quality/impartiality of this information varies among the www.statistics.gov.uk

different sources
• how much the information they found might increase both direct
and indirect consumer activity.
Group prepare a short presentation for a wider class discussion on

the impact that information has on consumer behaviour and activity
in the economy, and when and why the government needs to
intervene.
Regulatory bodies, In pairs or groups, learners: To help learners get the most from this activity, give them
deregulation and direct • find examples in their own country of regulation, deregulation guidance on where to obtain the information they need for the
provision of goods and and direct provision of goods and services by the government government interventions they are looking at.
services. • show how these have been designed to achieve an efficient
resource allocation and correct market failure The group activity provides a good opportunity for peer
KC6 • consider the extent to which such intervention has corrected the mentoring.
identified market failure
• prepare a presentation on their findings.
Class discussion in which each group gives their presentation.

Ensure that learners understand the mechanisms governments can
use to intervene to correct market failure in an economy.
Pollution permits Explain that a pollution permit refers to a licence given by a Pollution permits can also be known as tradable permits, carbon
government which allows a firm to cause pollution, but only to a taxes or carbon credits.
KC6 certain level. By allowing less than the current pollution levels, this
can contribute to reducing pollution in an economy. For the group activity, give learners guidance on where to look
for the information, along with an example pollution permit if
In groups, learners: possible.
• research examples of the use of pollution permits in their own
country
• investigate how well or otherwise the idea works in practice
• report back their findings to the class.
67
Scheme of Work
Consolidate learning by setting written questions on the Kyoto

Protocol and carbon trading so learners practise looking at
government microeconomic intervention in relation to pollution and
climate change issues.
Price and output In pairs or groups, learners: To help learners get the most from this activity, give them
decisions under • find examples of firms that have either been nationalised or guidance on where to obtain the information they need for the
nationalisation and privatised, in their own country if possible country and firms they are looking at.
privatisation • investigate how both types of change affect price and output
decisions. The group activity provides a good opportunity for peer
KC6 mentoring.
Each group reports back to the class and discusses how such
changes in ownership affect price and output decisions.
Behavioural insights and In pairs or groups, learners: Behavioural insights into achieving efficient resource allocation
‘nudge’ theory • consider to what extent people act in the rational way traditional emphasise the importance of the actual behaviour of people,
economic theory suggests when making purchasing decisions, rather than relying on the traditional assumption that they
or whether they actually act in less rational ways, such as being always act rationally.
influenced by brands, peer groups, celebrity endorsement, etc. Nudge theory suggests that the economic behaviour of people
• look at ways governments use ‘nudge’ theory to influence can be changed by ‘nudging’ rather than forcing them in a
consumer behaviour (e.g. to consume fewer demerit goods such certain direction.
as cigarettes or alcohol)
• assess how effective this is and the extent to which success is The group activity provides a good opportunity for peer
affected by underlying addiction to the products concerned mentoring.
• produce a collaborative report on their findings.
Build in:
Each group then feeds back to the class as the basis for a wider incentives
discussion to consolidate learning on behavioural insights. Individual and crowd psychology.
Progress check – policies To consolidate learning of this topic, set a question from Paper 41 This question will give learners the opportunity to consider some
to achieve efficient Jun 2020 (I)(F) of the problems of resource allocation in a market. Appreciating
resource allocation and ‘to what extent’ governments might be able to achieve a better
correct market failure Or Q2 from Specimen Paper 4 for examination from 2023. resource allocation than the market is the key element.
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Scheme of Work
Government failure in Arrange a class debate with two learners speaking for and two I It is important that learners are able to critically reflect on all
microeconomic against the key themes of: the examples of government microeconomic intervention
intervention. • achieving efficient resource allocation and correcting market covered in this topic and are also able to offer a reasoned
failure assessment for each policy as to what extent the benefits
• redistribution of income and wealth outweigh the limitations.
• labour market forces in perfect and imperfect markets.
It is vital that learners are able to look at both sides of the
Focus the debate on one economy that you have studied in detail, argument, particularly in longer questions with the command
preferably that of the learners’ own country, and explain that all word ‘discuss’. Running a debate on this topic will help learners
comments and contributions from the class must be supported by assess both the benefits and limitations of the various methods
real-world examples to help consolidate learning. of government intervention as well as developing their
understanding of the types of intervention that can be made.
8.2 Equity and redistribution of income and wealth
Difference between equity Explain, using examples of own country, the difference between
and equality equity and equality. Learners write down definitions.
Difference between equity In pairs, learners think of examples of where there may be a clash Learners need to appreciate that what is fair in an economy
and efficiency between equity and efficiency in an economy. One such example is may not be efficient.
the uneven distribution of income in an economy – this could be
addressed by placing higher taxes on the rich and giving subsidies
to the poor, but this interferes with the market mechanism, creating
inefficiency. Each pair prepares a presentation on their examples.
Distinction between Explain using the differences using data from own country.
absolute poverty and
relative poverty
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 1 – No Poverty / SDG 2 – Zero Hunger / SDG 4 – Quality Education / SDG 6 –
Clean Water and Sanitation
The Poverty Trap Learners: The poverty trap refers to a situation where a person receives
• find examples of poverty traps in their own or another country benefits, increasing their income, but this higher income then
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Scheme of Work
• conduct a more detailed analysis on the causes, potential results in that person no longer being entitled to benefits they
solutions and consequences for one of the examples they find were originally allowed to claim.
• present their findings to the class. • This is one useful example that can be included in the
concluding activity in this topic on Government failure in
Conclude with a class discussion to ensure learners understand the microeconomic intervention below.
key points of this topic.
Policies towards equity In pairs, learners: To help learners get the most from this activity, give them
and equality • Identify examples of means-tested benefits (e.g. guidance on where to obtain the information they need.
unemployment benefit) and transfer payments (e.g. welfare
Negative income tax payments, state pension ) in their own and other countries Means-tested benefits are targeted at those perceived to me in
• assess the advantages and disadvantages of the different most need.
Universal benefits and mechanisms identified
means-tested benefits • summarise their findings on an A3 Mind map to enable Transfer payments are usually paid to individuals by a
comparison and discussion with other groups. government, and the key feature is that no productive effort is
Universal basic income • find out which countries use negative income tax and required to receive it.
assess the advantages and disadvantages of this
KC5 mechanism Ensure learners do not confuse transfer payments with
KC6 ‘transfer earnings’ (see the Labour Market Forces below).
Use the resulting class discussion to ensure that learners fully
understand the role means-tested benefits and transfer payments
can play in bringing about a more even distribution of income in an
economy and the resulting risks of both (disincentive to work,
absence of a link to productive effort.
Progress check – equity To consolidate learning of this topic, set a question from Cambridge This will give learners the opportunity to look at how a
and policies towards Specimen Paper as a class test or homework. government might achieve a more equal distribution of
income and wealth income. The key elements are the command word ‘discuss’
redistribution and recognising that the question is only concerned with
income, not wealth.
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 1 – No Poverty / SDG 10 – Reduced Inequalities
8.3 Labour market forces and government intervention
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Demand for labour Think-Pair-Share – “What do we mean by Demand for labour’?

Through feed back establish that firms demand labour.
Factors affecting demand Explain that wages are determined in the same way as any other To help learners get the most from this activity, give them
for labour in a firm or an price in a market, i.e. by the interaction of demand and supply. guidance on where to obtain the information they need.
occupation. Include here the concept of derived demand, e.g. if the demand for
a good increases, then the productivity for that good increases, The group activity provides a good opportunity for peer
Causes of shifts in and which in turn leads to an increase in labour. mentoring.
movement along the www.tutor2u.net/economics/revision-notes/a2-micro-demand-
demand curve for labour for-labour.html
in a firm or an occupation
Marginal revenue product Explain the importance of marginal revenue product theory in terms
(MRP) theory. of the demand curve for labour.
KC2 Give data example, by using a table and learners complete it.
Set questions requiring learners to do calculations of marginal
revenue product to help them gain a better understanding of the
concept. (I)(F)
Consolidate learning of marginal revenue productivity by setting

Question 5a from Paper 42 Mar 2019 as a class test or homework.
Factors affecting the In pairs or groups, learners research the labour force in their To help learners get the most from this activity, give them
supply of labour country and how the size and composition of that labour force has guidance on where to obtain the information they need.
changed over, say, the last thirty years.
A thirty-year period is recommended as the minimum time for
Follow this with a class discussion to consolidate learning. the underlying trends to become easily apparent.
www.tutor2u.net/economics/revision-notes/a2-micro-supply-of-
labour.html
Causes of shifts in and Think-Pair-Share – “What factors affect the supply of labour?”.
movement along the Through feedback, write factors on the board as a list.
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supply curve of labour to Learners say whether the factors would cause a movement or a
a firm or an occupation shift in the supply curve. Leaners write own notes from board.
Wage determination in Learners put both demand and supply curve together on a diagram. www.tutor2u.net/economics/revision-notes/a2-micro-wage-
perfect markets Give a worksheet with changes in factors determining demand and determination-competitive-markets.html
supply of labour. Learners show, using a D&S diagram, how
KC3 changes affect the wage rate. www.s-cool.co.uk/a-level/economics/labour-markets/revise-
it/the-equilibrium-wage
Consolidate learning of wage determination in perfect markets by
setting Question 5a from Paper 42 Mar 2020 as a class test or
homework. (I)(F)
Wage determination in Explain the potential influence in the determination of wages in A difficult topic which relies on teacher-led explanations.
imperfect markets – the imperfect markets of:
influence of trade unions, • trade unions A monopsony refers to a single buyer of a factor of production,
governments and • governments (e.g. national minimum wage) such as labour.
monopsonies • monopsonies and bilateral monopolies.
www.tutor2u.net/economics/revision-notes/a2-micro-trade-
KC3 Teacher-led explanation. Learners will need the diagrams. unions-and-monopsony-employers.html
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 1 – No Poverty / SDG 10 – Reduced Inequalities
Progress check Question 3 Specimen Paper 4 (2023) essay on imperfect labour An opportunity for learners to draw and use a diagram in their
markets. analysis
Determination of wage This topic focuses on elasticities of demand and supply. Diagrams of different elasticities in supply and demand are
differentials by labour needed to illustrate the differences in wages.
market forces Think-Pair-Share – Give learners three different occupations.
Learners consider why they are paid different amounts of money.
Write answers on board. Explain the points made in terms of

elasticities.
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 5 – Gender Equality
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Transfer earnings and Explain that: The following link has notes on this topic:
economic rent • transfer earnings refer to the wages which could be earned in www.economicshelp.org/microessays/economic-rent/ -
the next best alternative employment :~:text=Transfer earnings are the minimum,need in order to
• economic rent refers to the amount which a person can earn work.
that is in excess of their transfer earnings.
Set a question to ensure learners can apply these concepts.

Learners:
• find out the earnings of, for example, members of their family
• distinguish the related transfer earnings and economic rent •
summarising their findings in a one-page profile.
Progress check – wage Consolidate learning of this topic by setting Question 5b from By focusing on the distinction between the two, this question
determination in perfect Paper 42 Mar 2019 as a class test or homework. helps learners understand the difference between perfect and
and imperfect markets Or Question 3 from Specimen Paper 4 2023. imperfect labour markets.
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9. The macroeconomy (A Level)
9.1 The circular flow of income
The multiplier process: Explain using an illustration how the multiplier works. A visual aid explains clearly the multiplier effect. They can be
Definition Show learners a worked example of the calculation of the found on google images.
Calculations multiplier.
The worksheet should include calculating the value of the
Give learners a worksheet with multiplier calculations. multiplier and calculating the effect on national income.
Calculation of Emphasise that the proportion of a household’s disposable

Average and marginal income spent on consumption reduces as income increases
propensities because more is put aside as savings. Define key terms.
Give learners the appropriate data and guidance to:

• work out to what extent the marginal propensities to save and
consume change as incomes rise
• calculate figures for both the average and marginal
propensities to save and consume
• consider the major effects on these figures (e.g. price
inflation, savings rates, age, etc.).
Consumption and savings Give the definition of consumption. Learners consider what The following will need to be explained: consumption function:
factors affect consumption. autonomous and induced consumer expenditure • savings
function: autonomous and induced savings.
Write findings on board.
Learners put factors in the first column of a two-column table: in

the second column learners explain how the factor affects
consumption.
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Investment, accelerator Give the definition of investment. Learners consider what factors The difference between autonomous and induced investment
affect investment. needs to be explained.
Write findings on board. www.tutor2u.net/economics/reference/accelerator-effect
Learners put factors in the first column of a two-column table: in

the second column learners explain how the factor affects
investment.
The video from tutor2u.net gives a good explanation of the

accelerator affect.
Government Spending Think-Pair-Share – Discussion of the factors which affect the

level of government spending.
Net exports In pairs, learners brainstorm what factors affect imports and
exports of their country. Produce worksheet with questions
which check their understanding of how each change affects net
exports and the subsequent effect on aggregate demand.
Full employment level of Give definitions to learners. Give learners charts of GDP for their You may need to reverse this diagram by putting the output
national income and country and they identify periods of inflationary and deflationary position on the diagram and Learners say what type of gap it is.
equilibrium level of gaps.
national income:
• inflationary and Learners draw an AD/AS diagram. They have to indicate where
deflationary gaps there would be an inflationary gap and a deflationary gap.
KC3
9.2 Economic growth and sustainability
Business Cycle Watch Tutor2u presentation on business cycle www.tutor2u.net/economics/reference/economic-cycle

Set questions to ensure learners understand (I)(F)
Actual versus potential Learners need to understand the distinction between actual and
growth in national output. To develop understanding of potential growth, In pairs or groups, potential growth in terms of the difference between a movement
learners: draw two production possibility curve diagrams, one
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Output gaps showing a movement from within the curve to a point on the from within a production possibility curve to a position on the
curve and one showing a shift outwards of the curve curve and an actual shift outwards of the curve.
KC4
Finish with a class discussion to consolidate learning on actual It is also important they understand the concept of an output gap
and potential growth, output gaps and business/trade cycles. in terms of the level of expenditure in an economy being less than
the capacity of an economy to produce.
Policies to promote Brainstorm examples of government policies. In groups: Ensure each group chooses a different policy to evaluate to
economic growth and the 1 Learners consider how identified policies can be applied to ensure all policies are covered.
effectiveness economic growth;
2 Choose one policy and discuss its effectiveness.
KC6
KC7 Groups feed back to class in form of mini presentation.
Each group writes up findings. These are photocopied and
shared with the class.
Inclusive economic Give a definition of inclusive economic growth. Set the following This activity can be given as a flipped learning activity.
growth question ‘Why do we need inclusive growth?’ Learners use
textbooks, internet or other resources, to answer the question.
Learners to present findings in a one-page profile.
Sustainable economic Group work. Define sustainable economic growth. Set research
growth task which involves answering the questions:
• what impact does economic growth have on the
KC4 environment and climate.
• What policies can be used to mitigate the impact of
economic growth on the environment and climate
change.
Learners present their findings.
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 8 – Decent Work and Economic Growth / SDG 11 – Sustainable Cities and
Communities
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9.3 Employment/unemployment
Full employment and the Give key terms to learners. Start by explaining that:
natural rate of Then learners: • full employment is the agreed percentage of those available to
unemployment • find out the current rate of unemployment in their own country work who are in work (definitions vary depending on whether
or another country you specify factors such as changing jobs are taken into account)
• research that economy further and come to an informed • natural rate of unemployment is the level of unemployment in
judgement as to what might be regarded as full employment an economy when the rate of inflation is stable (i.e. if production
• assess what amount of the unemployment rate is ‘natural’ costs increase, production reduces and unemployment
• write up their findings in a one-page profile. increases ‘unnaturally’).
Class discuss this to consolidate learning. Teaching activities on Keynesian and monetarist approaches to
economics are provided later on in this topic.
Extend more able learners by asking them to look at the non-
accelerating inflation rate of unemployment (NAIRU). www.s-cool.co.uk/a-level/economics/unemployment-and-the-
phillips-curve/revise-it/links-with-aggregate-demand-and-supp
Equilibrium and Give definition using an AD/AS diagram.

disequilibrium employment
Voluntary and Involuntary Give definition using an AD/AS diagram.

unemployment
Natural rate of Present diagram of natural rate of unemployment and explain. www.economicshelp.org/macroeconomics/unemployment/natural
unemployment Learners copy into notes. _rate/
Through questioning, learners consider:
• determinants
• policy implications
Alternatively, learners read the notes from economicshelp.org

and summarise into flashcards.
Then set a worksheet with questions to check their

understanding.
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Patterns and trends in Collect Unemployment data from the internet which includes data Recognising trends is an important skill throughout the syllabus,
(un)-employment covering the last 30 years. Produce a worksheet including particularly for the AS Level and A Level data response questions.
questions relating to the data.
KC4
Mobility of labour Give definitions of each form of immobility:

Forms, • occupational mobility
Factors affecting • geographical mobility.
Think-Pair-Share – Learners consider what affects the mobility

of each. Feedback to class, write on board. Learners write own
notes.
Policies to correct Outline the range of policies which can be used to control Stress that there are number of different approaches, and
unemployment unemployment, such as: emphasise that policies to correct unemployment could conflict
• fiscal policies with other economic objectives.
KC6 • monetary policies
• supply-side policies The past paper question requires learners to focus on whether it is
• exchange rate policies. justifiable for any one economic policy (in this case reducing the
level of unemployment) to be the main macroeconomic aim of a
In pairs or groups, learners compare the advantages and government at the expense of other economic aims.
disadvantages of the different policies to control unemployment in
an economy.
Use this work as the basis for a class discussion or debate on

the relative merits of the various approaches, taking into account
their impact on other economic objectives.
Consolidate learning of this topic by setting Question 7 from

Paper 42 Mar 2019 as a class test or homework. (I)(F)
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 8 – Decent Work and Economic Growth
9.4 Money and banking
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Definition, functions and List the four key functions of money on the whiteboard: a Learners frequently confuse the characteristics of money with the
characteristics of money medium of exchange; a unit of account; a standard for deferred functions. Explain the former enables identification of money while
payment; a store of wealth. the latter is vital to explaining the importance of money in a
modern economy.
Give learners in pairs a worksheet with four columns, one for
each of the four key functions. In each column, learners explain
how each function might be important in a modern economy. Do
the same for characteristics of money.
Class discussion to focus on the relationship between the

functions of money and the successful management of a modern
economy.
Definition of money In pairs or small groups, learners: You may need to give learners some guidance on where to
supply • research the distinction between broad and narrow money in source the information they need for this activity, The website of
their own economy the country’s central bank is one useful source.
• display the information in a wall chart for the class. www.tutor2u.net/economics/revision-notes/a2-macro-
monetarism.html
Class discuss to ensure learners can clearly differentiate
between what is termed a broad money supply and what is
regarded as a narrow money supply.
Quantity theory of money Learners research the meaning of the quantity theory of money The quantity theory of money (MV=PT) is a key component of
(MV=PT) and how the equation is applied. (I) monetarist explanations of inflation, and learners should
understand it in these terms.
Class discussion to ensure that learners understand the context,
key points and application of this theory. www.tutor2u.net/economics/revision-notes/a2-macro-
monetarism.html
Set questions for learners to apply their understanding of the
quantity theory of money to particular situations. (I)
Functions of commercial Research the functions of a commercial bank. Learners present Set the activity as homework. Using the internet or textbook.
banks findings in a one-page profile.
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Causes of changes in the Teacher-led presentation of the following topics: Useful resources:
money supply in an open • Explanation of credit creation and the bank credit multiplier www.tutor2u.net/economics/reference/financial-economics-creating-
economy. • government deficit financing credit
• quantitative easing www.economicshelp.org/blog/619/economics/how-is-national-debt-
• changes in the balance of payments financed/
www.economicshelp.org/blog/1047/economics/quantitative-easing/
Set questions at the end of each topic to check understanding.
The role of the central bank can be set as a research topic.
Policies to reduce inflation Discuss different policies, e.g. fiscal policy, monetary policy and
and their effectiveness supply side policy. Apply the policies to inflation, using an AD/AS
diagram.
KC6
Demand for money Explain why Liquidity Preference theory is one of the main The past paper question provides good practice as it requires
liquidity preference theory theories of interest rate determination. learners to focus on the role of interest rates as a factor in
determining the demand for money in an economy.
Think-Pair-Share – Learners identify what influences a person’s
demand for money.
Provide questions which learners consider the impact of

changes in interest rates on the demand for money.
Consolidate learning of liquidity theory by setting Question 6a

from Paper 43 Nov 2019 as a class test or homework.
Interest rate Explain that there are markets for money; within these markets www.economicsdiscussion.net/theories/loanable-funds-theory-
determination: loanable there is a demand for money and a supply of money. Illustrate with-diagram/7504
funds theory and that interest rates are determined by the intersection of demand
Keynesian theory and supply.
Learners consider what affects the demand for funds and factors
which affect the supply.
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10. Government macroeconomic intervention (A Level)

10.1 Government macroeconomic policy objectives
Objectives in terms of Learners produce a mind map of the objectives and policies. This is an opportunity for revision from AS Level. It could be used
inflation, balance of as a flipped learning activity.
payments,
unemployment, growth,
development,
sustainability and
redistribution of income
and wealth
10.2 Links between macroeconomic problems and their interrelatedness
Relationship between the In groups, learners research the relationship between two This activity is to be done alongside the activities below so each
internal value of money economic variables. group is research the relationships including this one and the
and the external value of ones below.
money Learners collect data to support their findings.
KC4 Report back to class in form of short presentation.
Relationship between the Put learners into groups. Ask each group to research the Alternative is to give students sources of data. Ask students to
balance of payments and relationship between two economic variables. identify the relationship from the data and ask students to suggest
inflation why the relationship occurs.
Learners collect data to support their findings.
KC4 This could be in the form of a worksheet.
Report back to class in form of short presentation.
Relationship between Put learners into groups. Ask each group to research the
growth and inflation relationship between two economic variables.
KC4
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Relationship between Put learners into groups. Ask each group to research the
growth and the balance of relationship between two economic variables.
payments
KC4
Relationship between Traditional Phillips curve

inflation and • expectations-augmented Phillips curve (short- and long-run
unemployment: Phillips curve)
Progress check – As learners have now completed the AS Level units, set the A wide range of past papers (pre 2023) are available on the School
government macro whole Past Paper 2 under timed conditions. (I)(F) Support Hub to help ensure it will be an unseen paper.
intervention
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 1–17
10.3 Effectiveness of policy options to meet all macroeconomic objectives
Fiscal policy including Give learners notes from economics help. Learners read and then www.economicshelp.org/macroeconomics/fiscal-
Laffer curve answer questions based on the information. policy/fiscal_policy/ - :~:text=Fiscal policy is most effective,deep
recession (liquidity trap).&text=For example, if the
Learners research what is meant by a Laffer curve and how to government,be insufficient to boost demand.
present a Laffer curve analysis.
Ensure learners understand that higher tax rates will eventually
To consolidate learning, set questions requiring learners to apply lead to a decline in taxation revenue because of the disincentive
a Laffer curve analysis. effect of the Laffer curve.
Monetary policy Explain using a PowerPoint presentation and worksheets and

questions to check understanding. Lead class discussion on the
KC4 effectiveness.
KC6
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Supply-side policy Explain using a PowerPoint presentation and worksheets to check Worksheets can include data to see if the policy is effective.
understanding.
KC4
KC6 Apply knowledge to a given situation to lead discussion on
effectiveness.
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 5 Gender Equality
Exchange rate policy Explain using a PowerPoint presentation and worksheets to check
understanding
KC4
KC6
International trade policy Explain using a PowerPoint presentation and worksheets to check
understanding
KC4
KC6
KC7
Progress check All of the above can be checked using past-paper questions. Learners research/ read notes first in order to come up with an
Essay titles can be used as a starting point for all of the above essay plan.
topics.
Problems arising from In pairs or groups, learners research the conflicts that can arise Learners need to understand that there are likely to be conflicts
conflicts between policy between policy objectives in their own or another specified between the different macro policy objectives, and it is unlikely
objectives on inflation, economy that any government will be successful in achieving all of its
unemployment, economic objectives simultaneously.
growth, the balance of Give each group one of the following areas of potential conflict to
payments, exchange rates focus on: The macro policy aim of redistributing income and wealth gives
and the redistribution • inflation and unemployment an excellent opportunity to apply this key concept.
of income and wealth • inflation and economic growth
• inflation and the balance of payments www.tutor2u.net/economics/revision-notes/as-macro-objectives-
• inflation and exchange rates trade-offs.html
• inflation and the redistribution of income and wealth
• unemployment and economic growth
• unemployment and the balance of payments
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• unemployment and exchange rates www.s-cool.co.uk/a-level/economics/

• unemployment and redistribution of income and wealth. macroeconomic-objectives/revise-it/conflicts-between-
macroeconomic-objectives
Each group gives a presentation on their findings. Conclude with a
class discussion to ensure understanding of the key points/issues.
Consolidate learning of this topic by setting Question 7 from Paper

42 Mar 2019 or Q4 from Specimen Paper 4 2023.
Existence of government Give learners (in pairs or groups) access to suitable resources to: Learners need to understand there can always be a degree of
failure in macro-economic • research examples of government failure in macroeconomic government failure in terms of the macroeconomic policies it
policies policies in their own or another country’s economy adopts, and that this can arise from complexity or unreliability of
• investigate what role inadequate or incorrect information information as well as policy conflicts.
played in contributing to this failure
• display their findings in a one-page profile. www.tutor2u.net/economics/revision-notes/as-marketfailure-
government-failure.html
Follow with a discussion on group’s findings so learners can apply
their understanding to a wide range of examples.
Consolidate learning by setting questions on government failure.(I)
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 16 – Peace, Justice and Strong Institutions
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11. International economic issues (A Level)

11.1 Policies to correct disequilibrium in the balance of payments
Components of the Explain the different sections of balance of payments. The video below explains the sections of balance of payments.
balance of payments www.tutor2u.net/economics/reference/balance-of-payments-1
accounts Give learners a worksheet with items from all sections of the
balance of payments. Learners identify from which section the
items are from.
Effect of fiscal, monetary, Introduce by learners brainstorming/ mind mapping the tools of Opportunity to recall previous knowledge.
supply-side, protectionist each of the policies.
and exchange rate
policies on the balance of Working in pairs or groups, learners work through the effect of one
payments policy on the balance of payments.
All feedback to the class so all policies are covered. Each group
write up notes; notes photocopied and shared with class.
Difference between Define the terms ‘expenditure switching policy’ and ‘expenditure An expenditure-switching approach relies on changing the market price
expenditure-switching and reducing policy’. of imports/exports. Choosing devaluation as a policy instrument in this
expenditure-reducing context would therefore affect both the price of imports and the price of
policies Learners provide at least one example of each policy in practice, exports and not achieve the desired goal.
with a brief summary of the problem they were used to address
KC4 and whether or not it was successful. (I) www.s-cool.co.uk/a-level/economics/
the-balance-of-payments/revise-it/how-does-a-government-reduce-a-
Lead a class discussion in which learners report back on their current-account-d
findings to share and consolidate understanding.
Remind learners of instruments of macro policies; learners note

down which of the instruments from the list would be appropriate to
solve a balance of payments disequilibrium for:
1) an expenditure-switching approach
2) an expenditure-reducing approach. (I)(F)
Learners justify the use of the policies.
11.2 Exchange rates
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Measurement of exchange Hand out a worksheet that defines the three different types of www.tutor2u.net/economics/revision-notes/a2-macro-exchange-
rates exchange rate (nominal, real, trade-weighted) without identifying rate.html
which is which. Then learners:
• research exchange rates using the provided textbook and
website links
• match the correct type of rate to each definition on the
worksheet, explaining their choice in writing.
• provide an example of how each type of exchange rate is
measured. (I)
Follow with a class discussion based on individual task to ensure

understanding of all the key points.
Determination of Give a definition of a ‘managed’ exchange rate. www.tutor2u.net/economics/revision-notes/a2-macro-exchange-

exchange rates under rate.html
fixed and managed Hand out a pre-prepared worksheet with questions on managed
systems exchange rates for learners to complete in pairs. www.tutor2u.net/economics/presentations/a2economics/macro/FixedFl
oatingExchangeRates/default.html
KC3 Hand out a case study which illustrates the difficulties associated
with attempting to manage exchange rates, together with a pre-
prepared worksheet with related questions. Learners read the
case study and carry out further research to provide written
answers to the questions you set.
Consolidate learning on the determination of exchange rates with

a brief class question and answer session on floating, fixed and
managed systems.
Distinction between Give definitions of devaluation and revaluation. Emphasise here that devaluation and revaluation relate only to fixed
revaluation and exchange rate systems and so are determined by governments and
devaluation of a fixed Using the textbook and website resources provided here as a maintained through direct government intervention.
exchange rate starting point, learners:
• find an example of a devaluation that has taken place in a www.tutor2u.net/economics/revision-notes/a2-macro-exchange-rate-
country of their choice determination.html
• find an example of a revaluation in a country of their choice
• prepare a short presentation outlining why the devaluation/ www.businesseconomics.com/country-data.html
revaluation was introduced and whether the strategy was
successful. (I)
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Finish with a class discussion to share learning.
Changes in the exchange Give learners scenarios which change the exchange rate.
rate under different Learners explain the effects.
exchange rate systems
The effects of changing Recap the key points on the macro economy covered so far in this AD, Marshall-Lerner and J curve analysis are all key to the ability to
exchange rates on the topic. Lead a class discussion to ensure learners understand what analyse and evaluate the effects of exchange rate changes on the
external economy using the key domestic macroeconomic indicators and key external balance of payments.
Marshall-Lerner and J macroeconomic indicators are.
curve analysis www.economicshelp.org/macroeconomics/bop/policies-to-reduce-
Explain the Marshall-Lerner condition and J curve analysis and deficit/
KC4 how they are linked.
KC6 www.tutor2u.net/economics/revision-notes/a2-macro-exchange-rate-
Put learners into groups and give each one key domestic one key determination.html
external macroeconomic indicator to look at. Learners:
• research the potential impact of a change (in both directions) of
a country’s exchange rate on their key indicators
• prepare a PowerPoint presentation on this information, covering
changes in AD/AS, the Marshall-Lerner condition and a J curve
analysis. (F)
Learners present their findings to the class.
11.3 Economic development
Classification of Explain the different classifications of development. The World Bank have data to classify countries.
economies in terms of Use data to illustrate the classification.
their development
Indicators of living For learners to understand how national income statistics can be The link to the World Factbook on the CIA website is one good starting
standards and economic used to measure economic growth and living standards, ask them place for finding data for this activity.
development. to: www.cia.gov/library/publications/the-world-factbook/index.html
Monetary indicators • use the internet to access and download national income
statistics for their own country and five other selected countries www.tutor2u.net/economics/revision-notes/as-macro-national-
• compare the data for the six countries you have allocated them income.html
• present their findings in a one-page profile.
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Discuss in class with examples to ensure learners can understand

and interpret national income statistics effectively.
Indicators of living Think-Pair-Share – “What are the problems with national income
standards and economic statistics?”
development
Give learners time to discuss and share ideas. Feedback to the
Issues with Monetary class and have discussion.
indicators
Learners write notes from the board.
Indicators of living Introduce the idea that there are other indicators of living www.cia.gov/library/publications/the-world-factbook/
standards and economic standards in different countries:
development • Human Development Index (HDI) Ensure that learners are given a selection of countries to compare which
• Measure of Economic Welfare (MEW) cover developed as well as different degrees of developing countries.
Non-monetary indicators • Human Poverty Index (HPI)
• Multidimensional Poverty Index (MPI) The past paper question requires learners to think critically about how
KC7 • Kuznets curve. living standards are measured in different countries, and gives further
practise in doing 25-mark questions.
Allocate groups or pairs one of the above indicators, to.
• research the living standards in their own country
• compare this with selected other countries
• present the results in a report for sharing with the class.
Class discussion to compare the different indicators, how the

results differ from each and which are most useful in which
contexts.
Consolidate learning on measuring living standards by setting

Question 7 from Paper 43 Nov 2019 as a class test or homework.
Comparison of economic Display data showing indicators of living standards and GDP for Using charts is a good way of helping learners become familiar with
growth rates and living different countries. handling economic data.
standards
Learners identify differences in rankings for different countries.
11.4 Characteristics of countries at different levels of development
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Population growth and Display either on a worksheet or on a PowerPoint two population The following website has good diagrams of population pyramids.
structure pyramids, one for a developing country and one for a developed www.bbc.co.uk/bitesize/guides/ztr2w6f/revision/2
country.
This activity could be more structured by using structured questions to
Learners identify differences between the pyramids. Discuss identify the reasons.
possible reasons for differences.
Learners write their conclusions from discussion.
Income distribution Hand out appropriate data on the distribution of income in various A Gini coefficient measures inequality in the distribution of income in a
Gini coefficient Lorenz given countries and for each one learner: country. A Lorenz curve is a graphical representation of this measure.
curve • draw a Lorenz curve for that data
• use the information this provided to come to a judgement as to Give learners plenty of opportunity to practice their skills in presenting
whether the distribution of income in that country has become data accurately.
more or less equal over time. (I)
Consolidate learning by setting questions requiring learners to use

the Gini co-efficient, draw a Lorenz curve and interpret the results.
(I)
Economic structure Present charts on a PowerPoint or worksheet showing different Using charts is a good way of helping learners become familiar with
sectors for different countries in different stages of development. handling economic data.
Omit the country names and learners identify developed and
developing countries. Ask learners what causes the differences.
11.5 Relationship between countries at different levels of development
International Aid In pairs or groups, learners: The first activity provides a good opportunity for peer mentoring.
• research the different types of aid that exist, such as bilateral
aid and multilateral aid For both tasks, guide and direct learners as appropriate to the
resources they need to complete their work.
Class discussion to consolidate learning.
Giving aid to developing countries is a topic that causes much

debate, so learners in their pairs or groups prepare arguments for
and against the different types of aid identified and where they are
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targeted, especially in the context of creating economic

dependency. Allocate each group the point of view of either the
country giving aid or the country receiving aid.
Hold a class debate on the different motives for aid, the potential
benefits and drawbacks.
Trade and investment Use as a revision exercise from the benefits of trade.
Revise benefits of investment. Learners apply to an international
context.
Role of multinational Research activity on role of multinationals to a given country. Research activities are useful to set as a flipped learning activity. This
companies (MNCs) Use information to have classroom discussion/ debate on whether will form the basis for class discussion.
MNCs are an overall benefit to international development.
KC7 Class discussion acts as evaluation which is a higher order skill.
Foreign Direct Investment In pairs or groups, learners: It is important that learners are able to give a balanced response to
• research the role multinationals and foreign direct investment questions on multinational and foreign investment.
KC7 plays in their own country or another specified economy
• research the role that the government department for trade and You may need to direct learners to the resources they need for the first
investment plays in that economy in managing trade and task.
investment generally, including both FDI and multinationals
• present their findings in a wall chart or poster.
Class discuss whether multinationals are on balance good or bad

for an economy, ensuring that the arguments both for and against
can be substantiated.
Consolidate learning of FDI by setting Q5 from Specimen Paper 4

(2023).
External debt Introduce the concept using the video. The following video explains the difference between internal debt and
external debt.
KC7 Think-Pair-Share – After introduction learners consider the causes www.tutor2u.net/economics/reference/difference-between-national-
of external debt and subsequent problems. debt-and-external-debt
90
Scheme of Work
The notes from economicshelp.org could be given and questions www.economicshelp.org/blog/14874/debt/problems-of-external-debt/

set, to check their understanding.
Using the learners’ own country as a case study could be used.
Role of the IMF Research the role of the IMF as a flipped learning activity. www.imf.org/en/Home
Learners produce a one-page profile (report) with their findings.
Role of the World Bank Research the role of the IMF as a flipped learning activity. www.worldbank.org/
Learners produce a one-page profile (report) with their findings.
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 17 – Partnerships for the Goals
11.6 Globalisation
Meaning, causes and Introduce the topic by showing the video from tutor2u.net. www.tutor2u.net/economics/reference/globalisation
consequences Set a research task by which the learners look at the causes and
consequences of globalisation. This could be based on their own www.economicsonline.co.uk/managing_the_economy/alternatives-to-
country. gdp-in-measuring-countries.html
Write their findings up as a report.
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 15 – Life On Land
Distinction between a free Learners: www.economicsonline.co.uk/Global_

trade area, customs • research and provide a definition of economic integration economics/Economic_integration.html
union, etc. • produce a diagram showing the different varieties and stages. (I)
www.economicsonline.co.uk/Global_economics/Trade_liberalisation.ht
KC5 Learners go through their work with a partner, and then discuss ml
KC7 with the class.
www.economicsonline.co.uk/Global_economics/Trading_blocs.html
Learners:
• watch the Economics Online video on economic integration
• research and make notes about the features of integration
• prepare questions about the features and varieties of economic
integration for the class to answer. (I)
91
Scheme of Work
Lead a class question and answer session on economic

integration, using the questions learners have developed as a
framework. Support this with a set of pre-prepared questions of
your own for learners to complete if required.
Recap the stages of economic integration, inviting learners to draw

relevant diagrams on the board.
Extension activity: Try a more detailed class activity on this

based on a case study of the European Union.
Trade creation and trade Show learners the video from economicshelp.org. Learners make www.economicshelp.org/blog/glossary/trade-diversion/
diversion notes from video.
Show the diagram on board – learners copy into notes.
KC5 Research activity –learners research a trading bloc and identify
examples of trade creation and trade diversion, and assess
consequences of. Learners write a one-page profile with their
findings.
See additional activity in the document ‘Optional activities (sustainability)’ – SDG 16 – Peace, Justice and Strong Institutions
Assessment of the Recap the causes of inflation from the previous unit on the macro The three main causes of inflation are:
effectiveness of fiscal, economy, using diagrams, AS/AD analysis and a question and • monetary
monetary and supply side answer session to refresh understanding. • cost-push
policies to correct inflation • demand pull.
and deflation Give each learner a worksheet which lists the three main causes of
inflation. Learners select and state the appropriate policy The pair task in this activity provides a further opportunity to explain the
KC4 instruments to correct each type of inflation. (I) role of analysis (look at how variables can be used to predict different
KC6 outcomes and so develop a policy) and evaluation (reach a conclusion
In pairs, learners choose a policy instrument to correct inflation or judgement on the effectiveness of a policy based on supporting
caused by each of the following: evidence).
• increasing costs (cost push)
• too much spending (demand pull) www.tutor2u.net/economics/content/topics/inflation/controlling_inflation.
• too much money in circulation (monetary). htm
One learner analyses how each policy instrument might work in www.s-cool.co.uk/a-level/economics/
practice, and the other evaluates their effectiveness. inflation-and-monetary-policy/revise-it/how-does-a-government-cure-
inflation
92
Scheme of Work
Each pair presents their findings to the class in a format of their

choice for discussion and feedback. (F)
Assessment of the Recap the causes of deflation from the previous unit on the Ensure here that learners can clearly distinguish between:
effectiveness of fiscal, macroeconomy. • deflation, where the average price level is consistently falling
monetary and supply side • disinflation, where the rate of increase of the average price level is
policies to correct inflation To help refresh understanding on inflation and deflation at this falling.
and deflation point, set Question from Specimen Paper. (I)(F)
As learners are now completing the A Level it would be useful to do the
KC4 Hand out a case study based on a deflationary situation which specimen paper question in timed conditions to help them with their
KC6 occurred in a given economy in the last ten years. Tell learners exam preparation.
they are the Chancellor of the Exchequer and responsible for
solving this problem. The tasks in this activity provide a good opportunity to revise
macroeconomic theory and analysis as a whole.
Learners write a report that:
• explains the three alternative policy options available www.dineshbakshi.com/printable-worksh
• evaluates the effectiveness of each policy option eets/business-economics-worksheets/
• makes a recommendation as to which policy to adopt. (I) 1641-case-study-risk-of-deflation
Learners present their findings to the class for discussion, www.businesseconomics.com/country-data.html

questions and feedback.
Hand out information on what actually was done in relation to the

case study and what degree of success or otherwise it had. Invite
learners to ask questions and compare the approach with what
might be adopted by their own country.
Progress check – As learners have now completed the A Level units, set the whole Ensure that the paper you choose does not contain questions learners
government macro past paper under timed conditions. (I)(F) have already answered – a wide range of past papers (pre 2023) are
intervention available to help ensure it will be a fresh test.
93
Cambridge Assessment International Education
The Triangle Building, Shaftsbury Road, Cambridge, CB2 8EA, United Kingdom
t: +44 1223 553554
e: [email protected] www.cambridgeinternational.org
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Cambridge International AS & A Level

1. Basic economic ideas and resource allocation 20% 10%

2. The price system and the microeconomy 20% 30%

3. Government micro economic intervention 10% 20%

4. The macroeconomy 30% 30%

5. Government macro intervention 10% 10%

6. International economic issues 10% 10%

Suggested teaching order

• a greater depth as well as breadth of subject knowledge

School Support Hub

Suggested teaching activities give you lots of

Past papers, specimen papers and mark schemes

Using these resources with your learners allows you

1. Basic economic ideas and resource allocation (AS Level)

1.1 Scarcity, choice and opportunity cost

Extension activity: More confident learners can produce their

1.2 Economic methodology

Syllabus ref. Suggested teaching activities Teacher guidance and resources

Learners, individually or in pairs, to construct a positive and a

Plenary or starter for next lesson, use the ‘swipe-it resource’.

1.3 Factors of production

Syllabus ref. Suggested teaching activities Teacher guidance and resources

Collate the responses on the whiteboard. Identify the specific

Syllabus ref. Suggested teaching activities Teacher guidance and resources

Go through the answers with the class, inviting learners to discuss

1.4 Resource allocation in different economic systems

1.5 Production possibility curves (PPC)

Syllabus ref. Suggested teaching activities Teacher guidance and resources

Learners decide where on the graph they would choose. What

Learners work in pairs, writing down their answers to the following:

Learners explain the shape and shift of each production possibility

Syllabus ref. Suggested teaching activities Teacher guidance and resources

Progress check Q2a, Specimen Paper 2 (for examination from 2023)

1.6 Classification of goods and services

Learners provide examples from their own experience.

Learners give examples within the learner’s local environment and

Extension activity: In pairs, learners discuss why Public Goods

Syllabus ref. Suggested teaching activities Teacher guidance and resources

2. The price system and the microeconomy (AS Level)

2.1 Demand and supply curves

Effective demand It is important to emphasise that it is only effective demand

Syllabus ref. Suggested teaching activities Teacher guidance and resources

In pairs, learners consider how each factor determines demand.

Activity on compliments and substitutes. Give learners pairs of

Develop by introducing the idea of price changes of compliments

Determinants of supply As above but for supply.

Causes of a shift in the As a above but for supply

Syllabus ref. Suggested teaching activities Teacher guidance and resources

movement along these

2.2 Price elasticity, income elasticity and cross elasticity of demand

Conclude by explaining to the class that:

Syllabus ref. Suggested teaching activities Teacher guidance and resources

• perfectly inelastic (PED = 0)

In pairs, learners are given a pre-prepared worksheet containing

Discuss the significance of these coefficients and the three cases

Learners suggest practical ways in which understanding of these

Class discussion based on this work to establish the relationships www.economicsonline.co.uk/Competitive_markets/Elasticity.htm

Learners plot a graph from given data showing the impact of