Below are notes for material examined in Paper 3 and Paper 4 for CAIE Economics.
Basic Economic Ideas and Resource Allocation
Notes
- a) Efficient resource allocation
- b) Externalities and market failure
- c) Social costs and benefits, cost-benefit analysis
Videos
- Efficient resource allocation
- Externalities and market failure
- Social costs and benefits
- Cost-benefit analysis
Price System and the Microeconomy
Notes
- a) Law of diminishing marginal utility
- b) Indifference curves and budget lines
- c) Types of cost, revenue and profit, short-run and long-run production
- d) Different market structures
- e) Growth and survival of firms
- f) Differing objectives of a firm
Videos
- Law of diminishing marginal utility
- Indifference curves and budget lines
- Types of cost, revenue and profit, short run and long run production
- Different market structures
- Growth and survival of firms
- Differing objectives of a firm
Government Microeconomic Intervention
Notes
- a) Policies to achieve efficient resource allocation and correct market failure
- b) Equity and policies towards income and wealth redistribution
- c) Labour market forces and government intervention
- d) Government failure in microeconomic intervention
Videos
- Policies to achieve efficient resource allocation and correct market failure
- Equity and policies towards income and wealth redistribution
- Labour market forces and government intervention
The Macroeconomy
Notes
- Contextual Analysis
- a) Economic growth, economic development and sustainability
- b) National Income statistics
- c) Classification of countries
- d) Employment and unemployment
- e) The circular flow of income
- f) Money supply (theory)
- g) Keynesian and Monetarist schools
- h) The demand for money and interest rate determination
- i) Policies towards developing economies, policies of trade and aid
Videos
- Economic growth, economic development and sustainability
- National Income statistics
- Classification of countries
- Employment and unemployment
- The circular flow of income
- Money supply (theory)
- Keynesian and Monetarist schools
- The demand for money and interest rate determination
- Policies towards developing economies, policies of trade and aid
Government Macroeconomic Intervention
Notes
- Contextual Analysis
- a) Government macro policy aims
- b) Inter-connectedness of problems
- c) Effectiveness of policy options to meet all macroeconomic objectives
