Below are notes for material examined in Paper 1 and Paper 2 for CIE Economics.
Basic Economic Ideas and Resource Allocation
- a) Scarcity, choice and opportunity cost
- b) Positive and normative statements
- c) Factors of production
- d) Resource allocation in different economic systems and issues of transition
- e) Production possibility curves
- f) Money
- g) Classification of goods and services
Price System and the Microeconomy
- a) Demand and supply curves
- b) Price elasticity, income elasticity and cross-elasticities of demand
- c) Price elasticity of supply
- d) and e) Interaction of demand and supply and market equilibrium
- f) Consumer and producer surplus
Government Microeconomic Intervention
- a) Maximum and minimum prices
- b) Taxes (direct and indirect)
- c) Subsidies
- d) Transfer payments
- e) Direct provision of goods and services
- f) Nationalisation and privatisation
The Macroeconomy
- a) Aggregate demand (AD) and aggregate supply (AS) analysis
- b) Inflation
- c) Balance of payments
- d) Exchange rates
- e) The terms of trade
- f) Principles of absolute and comparative advantage
- g) Protectionism
