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9708 y13 sw_v1_190913 9708 y13 sw_v1_190913 Presentation Transcript

  • Scheme of work Cambridge International AS and A Level Economics 9708 For examination from 2014
  • Scheme of work – Cambridge International AS and A Level Economics (9708) Contents Overview .......................................................................................................................................................................................................................................................... 3 Unit 1: Introductory ideas and the price system ......................................................................................................................................................................................... 6 Unit 2: The price system in detail ............................................................................................................................................................................................................... 12 Unit 3: Macroeconomic measurement, theory and inflation .................................................................................................................................................................... 16 Unit 4: International trade ............................................................................................................................................................................................................................ 20 Unit 5: International trade problems and policies ..................................................................................................................................................................................... 25 Unit 6: Basic economic ideas ...................................................................................................................................................................................................................... 30 Unit 7: The price system and theory of the firm ........................................................................................................................................................................................ 32 Unit 8: Government intervention in the price system ............................................................................................................................................................................... 41 Unit 9: Theory and measurement in the macroeconomy ......................................................................................................................................................................... 45 Unit 10: Macroeconomic problems and policies ....................................................................................................................................................................................... 50 V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 2
  • Scheme of work – Cambridge International AS and A Level Economics (9708) Overview This scheme of work provides ideas about how to construct and deliver a course. The syllabus has been broken down into teaching units with suggested teaching activities and learning resources to use in the classroom. Recommended prior knowledge It is possible to take the course without prior study. In this case learners need to be able to: • think logically and critically • express their thinking accurately • handle data with confidence • be aware of current events • be familiar with the use of ICT. ® The study of Cambridge IGCSE or O Level Economics syllabus provides a thorough preparation for this course. Outline Whole class, group work, and individual activities are recommended throughout this scheme of work. The activities in the scheme of work are only suggestions and there are many other useful activities to be found in the materials referred to in the learning resource list. There is the potential for differentiation by resource, length, grouping, expected level of outcome, and degree of support by teacher, throughout the scheme of work. Timings for activities and feedback are left to the judgment of the teacher, according to the level of the learners and size of the class. Length of time allocated to a task is another possible area for differentiation. Extension and formative assessment activities are included where appropriate. The units within this scheme of work are: Unit 1: Introductory ideas and the price system Unit 2: The price system in detail Unit 3: Macroeconomic measurement, theory and inflation Unit 4: International trade Unit 5: International trade problems and policies Unit 6: Basic economic ideas Unit 7: The price system and the theory of the firm Unit 8: Government intervention in the price system Unit 9: Theory and measurement in the macroeconomy Unit 10: Macroeconomic problems and policies V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 3
  • Learning objectives Suggested teaching activities Learning resources The objectives indicate the abilities and skills candidates need to develop in relation to each section of the syllabus. The activities in each unit may be incorporated into standard exposition of the subject content. The activities are intended to encourage learner involvement. Reference to textbooks: Anderton refers to Economics (3rd edition) by A Anderton, Bamford refers to Cambridge International AS Level and A Level Economics Coursebook with CD-ROM by C Bamford and S Grant, Gillespie refers to AS and A Level Economics Through Diagrams: Oxford Revision Guides by A Gillespie. Stanlake refers to Stanlake`s Introductory Economics (7th edition) by S J Grant. Teacher support Teacher Support is a secure online resource bank and community forum for Cambridge teachers. Go to http://teachers.cie.org.uk for access to specimen and past question papers, mark schemes and other resources. We also offer online and face-to-face training; details of forthcoming training opportunities are posted online. An editable version of this scheme of work is available on Teacher Support. The scheme of work is in Word doc format and will open in most word processors in most operating systems. If your word processor or operating system cannot open it, you can download Open Office for free at www.openoffice.org Resources The up-to-date resource list for this syllabus can be found at www.cie.org.uk. Textbooks: Bamford, C and Grant, S nd Cambridge International AS and A Level Economics (2 edition) Teacher’s Resource CD-ROM Cambridge University Press, UK 2010 ISBN: 9780521126656 Grant, S Cambridge International AS and A Level Economics Revision Guide Cambridge University Press, India 2013 ISBN: 9781107661783 The two textbooks listed above are endorsed by Cambridge International Examinations for use with the Cambridge International AS and A Level Economics syllabus. Anderton, A Gillespie, A Grant, S V1 3Y09 Economics (3rd edition) Causeway Press, 2004 ISBN: 9781902796109 AS and A Level Economics Through Diagrams: Oxford Revision Guides Oxford University Press, 2009 ISBN: 9780199180899 Stanlake`s Introductory Economics (7th edition) Longman, 2000 ISBN: 9780582405486 Cambridge International AS and A Level Economics (9708) – from 2014 4
  • Websites: This scheme of work includes website links providing direct access to internet resources. Cambridge International Examinations 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 websites in the learning resource column were selected when the scheme of work was produced. Other aspects of the sites were not checked and only the particular resources are recommended. www.bized.co.uk www.imf.org www.jusbiz.org www.oheschools.org www.s-cool.co.uk www.tutor2u.net www.worldbank.org www.wto.org http://wps.pearsoned.co.uk/ema_uk_he_sloman_economics_6/ www.economicsonline.co.uk Newspapers and magazines: Business Week www.businessweek.com The Economist www.economist.com The Financial Times www.ft.com/home/uk The Guardian www.guardian.co.uk The Independent www.independent.co.uk The Telegraph www.telegraph.co.uk The Times www.timesonline.co.uk Television: BBC www.bbc.co.uk CNNwww.cnn.com www.bbc.co.uk/blogs/thereporters/robertpeston www.bbc.co.uk/blogs/thereporters/stephanieflanders Learners should also be encouraged to use appropriate newspapers, magazines and television programmes in their own country and region. V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 5
  • Scheme of work – Cambridge International AS and A Level Economics (9708) Unit 1: Introductory ideas and the price system Recommended prior knowledge This unit starts the course by introducing basic ideas and tools of analysis. Learners’ personal experiences as consumer, worker and observer can be drawn into the exposition of the content. Context The material includes demand and supply which will be developed in the following unit and also used to explain the setting of exchange rates and the effects of some types of government intervention. Comparative advantage is introduced and will form the basis of international trade in a later unit. Outline The unit considers the basic ideas of economics and its methods with introductory models of demand and supply and comparative advantage explored. Teaching time Based on a total time allocation of 360 guided learning hours for this Cambridge International AS and A Level course, it is recommended that this unit should take about 35 hours. Learning objectives Suggested teaching activities Learning resources Candidates should: understand the context of economics Learners survey the week’s news items to establish economic content. This can be done in small groups or as a whole class activity. Bamford Introduction Stanlake Chp 1 A useful tool for learners is the idea of an 'economist toolkit'. This is essentially a few key ideas that can be used to help answer different questions. www.economicshelp.org/macroeconomics/toolkit.html Learners should be encouraged to use appropriate newspapers, magazines and television programmes in their own country and region. Whole class review past examination papers to establish the nature of approach and content. Teacher provides past papers for learners to discuss in small groups. For past examination papers, mark schemes and examiner reports go to Teacher Support at http://teachers.cie.org.uk Learners are asked to think about and suggest why/how the idea of a social science, such as economics might be different from a natural science such as chemistry. Anderton Unit 45 Bamford Introduction Gillespie p 1 Stanlake Chp 1 be aware of the skills involved consider the ‘economist’s toolkit’ Candidates should: distinguish between a positive and normative statement V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 6
  • Learning objectives Suggested teaching activities Groups of learners survey press headlines to identify and contrast positive and normative statements. Candidates should: understand the concept of the margin and relate decisions to marginal changes Introduce and contrast marginal and average idea by use of numerical data e.g. weekly film attendances, golf round scores or goals scored each game by footballers. Learning resources www.tutor2u.net/ Positive and Normative Economics: Anderton Unit 47 Bamford Chp 9 Gillespie pp 27, 29 and 30 Stanlake Chp 13 www.s-cool.co.uk/a-level/economics Costs and their curves www.tutor2u.net/ Marginal Costs Candidates should: be familiar with the economist’s classification of resources Learners analyse inputs in contrasting production activities e.g. manufacturing and farming activity. apply the classification to economic activities Anderton Unit 2 Bamford Chp 1 Gillespie p 1 Stanlake Chp 5 www.bized.co.uk Economics Topic 1, Introductory microeconomics www.tutor2u.net/ Factors of Production Candidates should: understand the nature of economic wants and resources and the resulting economic problems Learners draw up a list of their economic ‘needs’ and then produce a list of their ‘economic wants’. Learners then asked to share their ideas with a partner, then adapt and share with rest of class. Anderton Unit 1 Bamford Chp 1 Gillespie pp 1 and 2 Stanlake Chp 1 understand the concept of opportunity cost Learners are required to produce a ‘mind map’ http://en.wikipedia.org/wiki/Mind_map which illustrates the connections between the key economic terms explained and what we mean by the term ‘economics www.bized.co.uk Economics Topic 1, Introductory microeconomics apply opportunity cost to different Learners www.oheschools.org V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 7
  • Learning objectives choices Suggested teaching activities • • • analyse scarcity for individual, company and nation. define opportunity cost. apply opportunity cost to family e.g. holiday and government e.g. public spending decisions. Learning resources Unit 1 The problems of health care www.s-cool.co.uk/a-level/economics Scarcity and Opportunity Cost www.tutor2u.net/ Opportunity Cost Scarcity Candidates should: understand the nature of the production possibility curve Teacher introduces plotting graphs of production possibility curves. employ production possibility curves (PPCs) to illustrate the basic economic problem and opportunity cost Extension Opportunity for advanced learners to explain different shapes of curves by relating to changing/constant opportunity cost and explain why opportunity costs might change. interpret the production possibility curve diagram Analyse effects of range of changes moving between and within curves Examine alternative shapes of curves and significance of movements. Formative assessment based on class worksheet on production possibility curves. Candidates should: recognise the drawbacks of barter understand the functions and characteristics of money and its importance for economic progress Role play exchange without money. Learners analyse suitability of selected items to serve as money highlighting weaknesses. Anderton Unit 1 Bamford Chp 1 Gillespie pp 2 and 3 Stanlake Chp 2 www.bized.co.uk Economics Topic 1, Introductory microeconomics www.oheschools.org Unit 1 The problems of health care www.tutor2u.net/ Production Possibility Frontier Shifts in the Production Possibility Frontier Anderton Unit 82 Bamford Chp 1 Gillespie p 67 Stanlake Chp 7 www.bized.co.uk Economics Topic 8, Money www.tutor2u.net/ Money and its functions V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 8
  • Learning objectives Suggested teaching activities Learning resources Candidates should: understand the nature, benefits and limits of division of labour Pin factory, Ford model T and automated production case studies – learner research on division of labour within a selected organisation with report back. Anderton Unit 2 Bamford Chp 1 Stanlake Chp 6 contrast the operation of division of labour in different settings Class discussion of modern working conditions and motivation. www.bized.co.uk Economics Topic 1, Introductory microEconomics www.bized.co.uk/virtual/dc/copper/index.htm Topic 3, Firms and virtual developing country copper field trip Candidates should: distinguish between absolute and comparative advantage Learners consider how this applies to individual’s employment. Learners work numerical example and translate to production possibility curve approach. apply the principle to demonstrate the benefits of division of labour Anderton Unit 14 Bamford Chp 4 www.bized.co.uk Economics Topic 11, International economics and virtual developing country trade field trip www.tutor2u.net/ Theory of Comparative Advantage Comparative Advantage – Worked Examples Candidates should: understand the nature of individual and market demand curves analyse the factors which influence demand curves distinguish between a shift in and movement along a curve Learner observation of demand/price relationship, for example, the number of cups of coffee they would purchase individually per week at different prices. Then, assuming all members of the class constitute the market demand for coffee, learners can construct a market demand curve and survey factors underlying demand for specified products e.g. oil, holidays, CDs, DVDs etc. Anderton Unit 4 Bamford Chp 2 Gillespie pp 4, 5 and 6 Stanlake Chp 8 www.bized.co.uk Economics Topic 2, Markets Graph demand schedules and their movements. www.oheschools.org Unit 2 The free market approach www.s-cool.co.uk/a-level/economics The Demand Curve V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 9
  • Learning objectives Suggested teaching activities Learning resources www.tutor2u.net/ Theory of Demand Candidates should: understand the nature of individual and market supply curves analyse the factors which influence supply curves Whole class analyse changing supply conditions for different products graph supply schedules and their movements. Teacher provides learners with a market supply schedule and asks them to add this to their graph of their market demand schedule Anderton Unit 5 Bamford Chp 2 Gillespie pp 10, 11 and 13 Stanlake Chp 10 Learners use completed graphs to identify and discuss idea of market equilibrium. www.bized.co.uk Economics Topic 2, Markets show the effect of the introduction of an indirect tax or subsidy www.oheschools.org Unit 2 The free market approach distinguish between a shift in and movement along a curve www.s-cool.co.uk/a-level/economics The Supply Curve www.tutor2u.net/ Theory of Supply Candidates should: appreciate the need for ‘ceteris paribus’ in supply and demand analysis Class considers range of objectives without assumption. Anderton Units 4 and 5 Bamford Chp 2 Candidates should: understand the setting of an equilibrium price Small groups discuss the operation of familiar market e.g. produce or shares and study price behaviour in a commodity market. Learners plot changes to equilibrium. Anderton Unit 6 Bamford Chp 2 Gillespie pp 12 and 13 Stanlake Chps 11 and 12 use diagrams to represent changing conditions Learners analysis of given changes on equilibrium and interrelationships between products with report back determining the price of a house simulation (virtual learning arcade) the interrelationship between markets simulation (virtual learning arcade) – www.bized.co.uk/virtual/index.htm . identify the elements left unchanged in the application of the assumption V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 www.bized.co.uk/virtual/index.htm Virtual Worlds: virtual learning arcade; virtual developing country rural life field trip 10
  • Learning objectives Suggested teaching activities Learning resources analyse the effects of changes in variables Extension Advanced learners might be given the opportunity to examine more demanding explanations of price equilibrium which incorporate a dynamic analysis using cobweb theory. www.oheschools.org Unit 2 The free market approach apply the analysis to different products and markets recognise the relationships between different products and services e.g. joint demand and joint supply Candidates should: understand the concept of consumer and producer surplus illustrate consumer and producer surplus recognise consumer and producer surplus in diagrams V1 3Y09 Formative assessment using multiple-choice questions relating to supply and demand analysis – ask learners to peer assess each other’s work and discuss their answers in pairs. Class discuss consumer behaviour and examine the demand curve diagram. In groups learners can discuss producer and consumer surplus and provide alternative diagrams on worksheets – learners have to identify consumer and producer surplus and explain their choice. www.s-cool.co.uk/a-level/economics The Equilibrium Price Real World Applications www.tutor2u.net/ Equilibrium Market Price Anderton Unit 4 Bamford Chp 2 Gillespie p 23 Stanlake Chp 8 www.tutor2u.net/ Consumer Surplus Extension Advanced learners might be asked to explain what happens to consumer and producer surplus when a price is fixed above/below the existing market equilibrium price. Cambridge International AS and A Level Economics (9708) – from 2014 11
  • Scheme of work – Cambridge International AS and A Level Economics (9708) Unit 2: The price system in detail Recommended prior knowledge The operation of demand and supply through the market mechanism. Context The unit concludes the microeconomic section of the course and introduces the notion of government intervention to improve the allocation of resources. This will be used in dealing with both national and international macroeconomic problems. Outline After examining the concept of elasticity and demonstrating how price allocates resources, some failures of the price system are explained. Government analysis of and policy on the failures lead on to a consideration of alternative economic systems and the problems of transition to a market economy. Teaching time Based on a total time allocation of 360 guided learning hours for this Cambridge International AS and A Level course, it is recommended that this unit should take about 55 hours. Learning objectives Suggested teaching activities Learning resources Candidates should: define and calculate price, income and cross elasticities of demand Contrast demand behaviour for ‘necessities’ and ‘luxuries’ • analyse the significance of demand curves with different slopes and the limiting case curves • ask learners to form pairs to construct relevant graphs to represent each of the limiting cases of price elasticity of demand and price elasticity of supply • apply the elasticity formula to numerical data • examine and explain actual values for price and income and cross elasticities Anderton Units 8, 9, 10 and 11 Bamford Chp 2 Gillespie pp 7, 8 and 9 Stanlake Chp 9 explain the meaning and causes of various elasticity values establish the link between elasticity, price and revenue distinguish between normal and inferior goods V1 3Y09 Analyse with diagrams the burden of taxation in different elasticity positions • examine link between elasticity and advertising • elasticity simulations (virtual learning arcade) Cambridge International AS and A Level Economics (9708) – from 2014 www.bized.co.uk Economics Topic 2, Markets; virtual learning arcade www.s-cool.co.uk/a-level/economics Price Elasticity of Demand Income Elasticity of Demand Cross Price Elasticity of Demand 12
  • Learning objectives Suggested teaching activities appreciate the uses of demand elasticity for government and business Candidates should: define and calculate price elasticity of supply explain the meaning and causes of various elasticity values www.tutor2u.net/ Price Elasticity of Demand Income Elasticity of Demand Cross Price Elasticity of Demand Apply the elasticity formula to numerical data: • interpret the significance of the slope of the supply curve • advanced learners could be introduced to extended work through a demonstration of mathematical proof which explains why a unitary elastic supply curve can be represented by a straight line through the origin of the two axes. • analyse responsiveness of supply in different industries apply elasticity of supply to different production techniques Candidates should: explain the functions of price as a signal in the use of resources illustrate the impact of externalities on market outcomes • • • analyse reactions of consumers and producers to given price change and effect on allocation construct flow chart of process learners form groups and complete gapped worksheets on elasticity – answers discussed in class ‘The Snickers Effect’ game at www.bized.ac.uk can be used to revise many key issues relating to elasticity discussed in this unit Class analyse the elements of decisions e.g. private transport, night air flights etc. Groups of learners research local and national cases e.g. environmental impacts Graph external as well as private costs and benefits to highlight market outcome. Learners form groups and each group has to produce examples of positive/negative externalities of production and consumption taken from their own economy – followed by class discussion. V1 3Y09 Anderton Unit 9 Bamford Chp 2 Gillespie p 11 Stanlake Chp 10 www.s-cool.co.uk/a-level/economics Price Elasticity of Supply www.tutor2u.net/ Price Elasticity of Supply • Candidates should: understand the effect of consumption and production decisions on third parties provide examples of negative and positive externalities Learning resources Cambridge International AS and A Level Economics (9708) – from 2014 Anderton Unit 15 Bamford Chp 2 Gillespie p 12 Stanlake Chp 11 www.oheschools.org Unit 2 The free market approach Anderton Unit 19 Bamford Chp 3 Gillespie pp 23, 24 and 25 Stanlake Chps 20 and 21 www.bized.co.uk Economics Topic 5, Market failure; virtual developing country aid field trip, wildlife field trip; virtual learning arcade www.jusbiz.org The real price of cotton 13
  • Learning objectives Suggested teaching activities Learning resources The real price of cotton activity at www.jusbiz.org/realcotton.html www.oheschools.org Unit 3 The case against the free market www.s-cool.co.uk/a-level/economics Externalities www.tutor2u.net/ What are Externalities? Positive Externalities Candidates should: distinguish between private, external and social costs/benefits and show how they are related Learners analyse situations to make distinctions e.g. waste disposal, modern agriculture methods. Anderton Unit 19 Bamford Chp 3 Gillespie p 24 Stanlake Chp 20 Candidates should: understand the features of costbenefit analysis (CBA) Teacher presents then contrasts the basis of private and public decision making and learners analyse a hypothetical case e.g. ban on smoking. Anderton Unit 22 Bamford Chp 3 Gillespie p 61 Stanlake Chp 20 appreciate CBA as a method of evaluating the impact of economic actions and arriving at a policy decision Learners may study of actual case e.g. dam construction, transport infrastructure spending. Tackling traffic congestion simulation (see link to virtual learning arcade). www.bized.co.uk/virtual/vla/transport/index.htm Virtual developing country aid field trip; virtual learning arcade www.tutor2u.net/ Cost Benefit Analysis be aware of the basics of the CBA method apply CBA to relevant cases Candidates should: understand the nature of public and merit /demerit goods identify examples of public and merit/demerit goods V1 3Y09 Learners provide their definitions and examples of public, merit and demerit goods and present and discuss in class or small groups. Class debate practicality and desirability of private provision of public and merit goods. Anderton Unit 20 Bamford Chp 3 Gillespie pp 23 and 25 Stanlake Chp 21 www.s-cool.co.uk/a-level/economics Public, Merit and Demerit Goods Cambridge International AS and A Level Economics (9708) – from 2014 14
  • Learning objectives Suggested teaching activities Learning resources www.tutor2u.net/ Public Goods Merit Goods and Service Candidates should: describe the different methods of government intervention in markets link the methods to market failure show how different methods achieve their objective recognise the problems and limits of the methods Teacher presents the use demand and supply analysis to show impact of government action. Learners view outcomes from different perspectives e.g. business, government, consumer to identify side effects of policy. Formative assessment based on ‘diagram game’ (described below) learners form groups – one group draws diagram on whiteboard representing positive/negative externality in consumption – next group has to label this diagram – next group has to decide whether labeling is correct and if not change it – final group decides whether changes are correct. Anderton Unit 21 Bamford Chp 3 Gillespie p 26 Stanlake Chps 24 and 25 www.bized.co.uk Economics Topics 2, Markets and 5, Market failure; virtual developing country rural life field trip www.s-cool.co.uk/a-level/economics What is Market Failure? What can be done about these Externalities? www.tutor2u.net/ Introduction to Market Failure Direct Regulation of Externalities Correcting Positive Externalities Candidates should: have an understanding of the problems of transition when central planning in an economy is reduced Learners should research a former centrally planned economy which is going through a process of transition towards more of a free market, such as Russia, Poland or the Czech Republic, and find out the various problems which have been experienced and how they have been tackled. Bamford, Chp 10, pp 192–200 The self-assessment task in Bamford (p 197) has some very interesting questions on this topic. V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 15
  • Scheme of work – Cambridge International AS and A Level Economics (9708) Unit 3: Macroeconomic measurement, theory and inflation Recommended prior knowledge Understanding the distinction between micro and macro. Context The unit introduces the measurement of macroeconomic variables and sets up the first elements of international economic aspects. Outline The ways employment/unemployment and productivity are measured are examined and the structure of the balance of payments is set out. The construction of a price index to measure inflation is explained before the causes and consequences of inflation itself are considered. The study of aggregate demand and aggregate supply is introduced. Teaching time Based on a total time allocation of 360 guided learning hours for this Cambridge International AS and A Level course, it is recommended that this unit should take about 40 hours. Learning objectives Suggested teaching activities Learning resources Candidates should: understand the idea of the labour force Learners form groups and analyse recent trends in employment and unemployment in respective countries. Each group gives a presentation outlining trends and answers questions from rest of class. Anderton Units 29 and 72 Bamford Chp 5 Gillespie pp 76–79 Stanlake Chp 56 www.bized.co.uk economics Topic 9, Unemployment and inflation www.s-cool.co.uk/a-level/economics Unemployment – some definitions www.tutor2u.net/ Labour Market Participation Rates Measuring Unemployment V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 16
  • Learning objectives Suggested teaching activities Learning resources Long Term Unemployment Candidates should: be familiar with the format of employment statistics and their recent patterns and trends Learners compare trends between economies Candidates should: know how unemployment is measured and how it has behaved Learners contrast different methods of measuring unemployment. Formative assessment based on data response question on unemployment statistics and trends. www.tutor2u.net AS macroeconomics measuring employment and unemployment www.economicsonline.co.uk National economy Macroeconomics Measuring performance Candidates should: understand the meaning and measurement of productivity Learners make international comparisons of productivity and comparisons over time. Teacher produces a class worksheet on productivity and how it can be increased. Candidates should: distinguish between exports and imports, goods and services Learners provided with simplified balance of payments accounts and required to classify different trade and capital transactions. Candidates should: distinguish between trade and capital flows Groups of learners assemble balance of payments table from random items and answer peer questions relating to their table. Accelerate high growth business training review and bonus – what you need to know: http://accelerateprogramreview.com/acceleratehigh-growth-business-training-review-5-steps-toincrease-business-productivity-profit/ www.tutor2u.net A2 macroeconomics Balance of payments www.bized.co.uk International economics balance of payments Candidates should: understand the structure of the balance of payments account V1 3Y09 Examine recent balance of payments accounts. Cambridge International AS and A Level Economics (9708) – from 2014 17
  • Learning objectives Suggested teaching activities Learning resources Formative assessment based on class worksheet on balance of payments calculations. Balance of payments (BOP): www.investinganswers.com/financialdictionary/economics/balance-payments-bop2116 Candidates should: analyse a balance of payments account Learners choose two economies and compare their balance of payments accounts with their own country – provide possible explanations for differences. represent exports and imports in supply and demand diagrams Learners are required to show graphically how exports and imports might impact on supply of and demand for goods. Candidates should: understand the idea of a general price level Examine trends in inflation. Inflation data: http://inflationdata.com/Inflation/images/charts/In flation_Trends/Inflation_Trends_chart.htm Candidates should: construct a weighted price index and use it to measure price changes Construct student price index. www.tutor2u.net AS macroeconomics inflation using index numbers AS presentations on inflation Candidates should: be aware of the problems in constructing, maintaining and interpreting a price index Calculate changes over time – teacher produces a class worksheet Candidates should: interpret the meaning of changes in price data Class looks at the contrast of changes in weights over time. Learners required to identify possible changes in weights based on changes in their own country’s economy over the last 100 years. Candidates should: define inflation Class studies the case study of hyper-inflation e.g. Germany 1923 and Zimbabwe 2008–2009, and contrast past instances of cost push, demand pull and monetary inflation. GCSE Weimar crisis of 1923: www.bbc.co.uk/schools/gcsebitesize/history/mw h/germany/crisis1923rev_print.shtml Candidates should: understand the shape and determinants of aggregate demand Learners need to have a good grasp of the diagrams; these are covered well in Bamford (pp 219–222) and Gillespie (pp 81–83). www.s-cool.co.uk/a-level/economics Aggregate demand Aggregate supply V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 18
  • Learning objectives Suggested teaching activities Learning resources (AD) and aggregate supply (AS) The self-assessment tasks in Bamford (pp 221–222) and the data question in Anderton (p 226) are very helpful. www.tutor2u.net/ Aggregate Demand and Aggregate Supply understand the significance of the interaction of AD and AS in terms of the determination of levels of output, prices and employment Formative assessment based on a compilation of multiple-choice questions taken from past examination papers – answers discussed in class. Access past papers at http://teachers.cie.org.uk www.bized.co.uk The AD and AS Model Candidates should: understand the terms describing aspects of inflation Class compares the effects of inflation from different viewpoints e.g. borrowers, lenders, taxpayers and the government. www.economicsonline.co.uk Macroeconomic problems inflation Candidates should: analyse the causes and consequences of inflation Whole class or learner groups examine links between inflation and international competitiveness Link between international competitiveness and inflation: www.economicshelp.org/blog/565/inflation/inflati on-competitivenes/ Candidates should: understand the shape and determinants of aggregate demand (AD) and aggregate supply (AS) Learners need to have a good grasp of the diagrams; these are covered well in Bamford (pp 219–222) and Gillespie (pp 81–83). www.s-cool.co.uk/a-level/economics Aggregate demand Aggregate supply understand the significance of the interaction of AD and AS in terms of the determination of levels of output, prices and employment Bamford, Chp 11, pp 219–222 Anderton, Units 33–35, pp 212–233 Stanlake, Chp 22, pp 268–278 Gillespie, pp 81–83 The self-assessment tasks in Bamford (pp 221 and 222) and the data question in Anderton (p 226) are very helpful. Formative assessment based on a compilation of multiple-choice questions taken from past examination papers – answers discussed in class. Access past papers at http://teachers.cie.org.uk www.tutor2u.net/ Aggregate Demand and Aggregate Supply www.bized.co.uk The AD and AS Model Bamford, Chp 11, pp 219–222 Anderton, Units 33–35, pp 212–233 Stanlake, Chp 22, pp 268–278 Gillespie, pp 81–83 V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 19
  • Scheme of work – Cambridge International AS and A Level Economics (9708) Unit 4: International trade Recommended prior knowledge Comparative advantage, elasticity and the structure of the balance of payments. Context The unit sets the background for a consideration of the problems that arise from international trade and the policies governments may introduce to correct these difficulties. Outline After establishing the basis of free trade, the forms and motives for protection are considered. The different types of economic integration are examined and the terms of trade explained. Teaching time Based on a total time allocation of 360 guided learning hours for this Cambridge International AS and A Level course, it is recommended that this unit should take about 25 hours. Learning objectives Suggested teaching activities Learning resources Candidates should: understand the application of comparative advantage to international trade Class recap on the principle of opportunity cost and apply to specialisation and international trade – this may be done as a quiz or multiple-choice question exercise. Anderton Unit 14 Bamford Chp 4 Gillespie pp 94 and 95 Stanlake Chp 47 Teacher explains the theories of absolute and comparative advantage and provide supporting numerical examples. Learners complete a worksheet with questions on comparative advantage, specialisation and exchange, and then discuss responses. In groups, learners identify any goods/services that they think might allow their country to gain a comparative advantage – choices discussed as a whole class activity. www.bized.co.uk Economics Topic 11, International economics; virtual developing country trade field trip www.s-cool.co.uk/a-level/economics The Case for Free Trade – Absolute Advantage The Case for Free Trade – Comparative Advantage www.tutor2u.net/ The Theory of Comparative Advantage V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 20
  • Learning objectives Suggested teaching activities Learning resources Comparative Advantage – Worked Examples WTO International trade data and news recognise the limits of the theory In pairs learners examine the patterns of trade between countries to test theory – learners research pattern of global trade based on commodity/service group, for example primary, secondary and tertiary and then compare this with the pattern demonstrated by their country – class discuss the differences. Extension Advanced learners might be introduced to simplified version of Heckscher-Ohlin model based on factor endowment. Candidates should: apply opportunity cost to international trade www.tutor2u.net A Level macroeconomics patterns of international trade Heckscher-Ohlin model: http://en.wikipedia.org/wiki/Heckscher–Ohlin_model www.economicsonline.co.uk A Level macroeconomics patterns of international trade Diagrams provided on whiteboard and learners are required to use these to explain the relationship between comparative advantage, opportunity cost and the benefits of international trade. Comparative advantage and international trade: www.tutor2u.net/economics/content/topics/trade/co mparative_advantage.htm Analyse geographical origin of purchases and give examples from own country of perceived benefits of trade. Anderton Unit 40 Bamford Chp 4 Gillespie pp 94–96 Stanlake Chps 47–48 interpret production possibility curves in an international context Candidates should: recognise the benefits of free trade www.bized.co.uk Economics Topic 11, International economics; virtual developing country trade field trip www.s-cool.co.uk/a-level/economics Why do countries trade? The Case for Free Trade Potential gains from trade: www.tutor2u.net/economics/content/topics/trade/gai ns_from_trade.htm V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 21
  • Learning objectives Suggested teaching activities Candidates should: define trade protection Learning resources Learners asked to discuss in groups and explain why governments might decide to intervene in international trade – groups present to the class and teacher lists reasons. understand the motives for trade protection Candidates should: know the different forms protection can take Compare nature of trade barriers in different economies. Learners research cases of protection e.g. US tariffs and discuss costs/benefits of measures – could form groups and each group locates a measure adopted by their country and analyses success/failure. Anderton Unit 40 Bamford Chp 4 Gillespie pp 95 and 96 Stanlake Chp 48 www.s-cool.co.uk/a-level/economics The Case Against Free Trade Protectionism – Barriers to International Trade: http://papers.xtremepapers.com/Edexcel/Advanced %20Level/Economics/Resources/A2_Protectionism. pdf Import Controls – The Economic Arguments: www.tutor2u.net/economics/content/topics/trade/tra de_barriers.htm www.worldbank.org World Bank Tariff and non tariff trade barrier data Candidates should: analyse the effects of trade protection Diagram of tariff to show price and output effects. Candidates should: define economic integration Establish own or familiar economies’ status. V1 3Y09 Extension Advanced learners could be given opportunity to use this diagram to show how the imposition of a tariff might result in a ‘deadweight welfare loss’. Anderton Unit 98 Bamford Chp 4 Gillespie pp 102–104 Stanlake Chp 64 Cambridge International AS and A Level Economics (9708) – from 2014 22
  • Learning objectives Suggested teaching activities Learning resources www.bized.co.uk Developing country trade field trip Single Market: www.tutor2u.net/economics/content/topics/europe/s ingle_market.htm Various regional economic groupings, e.g.: www.aseansec.org www.caricom.org http.//europa.eu Candidates should: distinguish the different forms of integration Teacher directs learners to www.economicsonline.co.uk Search for global economy and economic integration. www.economicsonline.co.uk Global economy Trading blocs Video economic integration Learners are then required to provide their own definition of integration, for class discussion, then form groups and construct a diagram illustrating the different stages of integrations. Candidates should: be aware of recent trends in integration Survey changes in world regional groupings. Candidates should: understand trade creation and diversion Learners form groups – each group gives a five minute presentation on trade creation and then a five minute presentation on trade diversion – class vote for best presentations. Candidates should: define the terms of trade Numerical example – learners then asked to identify factors which they think will cause changes in the terms of trade – learners need to explain their choices. Anderton Unit 14 Bamford Chp 4 Gillespie p 95 Stanlake Chp 49 www.bized.co.uk Developing country trade field trip V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 23
  • Learning objectives Suggested teaching activities Learning resources Terms of Trade: www.tutor2u.net/economics/content/topics/trade/ter ms_of_trade.htm World Bank Annual report: http://web.worldbank.org/WBSITE/EXTERNAL/EXT ABOUTUS/0,,contentMDK:20574164~menuPK:833 6884~pagePK:51123644~piPK:329829~theSitePK: 29708,00.html Candidates should: calculate changes in the terms of trade Learners examine the meaning of favourable/unfavourable in this context. Candidates should: be familiar with the vocabulary of changes in the terms of trade Learners link changes in the terms of trade to elasticity and the balance of payments. Candidates should: analyse the causes and effects of changes in the terns of trade Groups investigate the changes in terms of trade for different economies e.g. developing versus developed. Candidates should: be aware of recent trends and their consequences Numerical example taken from learners own country – learners analyse consequences of these changing trends for own country. Formative assessment based on a multiple-choice question quiz at the end of the section – answers discussed in class. V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 24
  • Scheme of work – Cambridge International AS and A Level Economics (9708) Unit 5: International trade problems and policies Recommended prior knowledge The balance of payments, government intervention in trade and the price mechanism. Context The unit completes the consideration of international trade by considering the problems which arise and how governments attempt to solve them. Outline The unit identifies the different types of exchange rate and explains how the exchange rate is set. The factors which cause changes in the exchange rate and the effects of changes are examined. The meaning, causes and results of a balance payments disequilibrium, are considered before analysing the methods governments may use to correct the disequilibrium and stabilise exchange rates. Teaching time Based on a total time allocation of 360 guided learning hours for this Cambridge International AS and A Level course, it is recommended that this unit should take about 25 hours. Learning objectives Suggested teaching activities Learning resources Candidates should: understand the different measures of the exchange rate Compare the different measures of the exchange rate to show their particular nature – learners research the differences between ‘trade weighted index’ ‘real exchange rate’ and effective exchange rate’ findings are then presented in class and relative importance of each measure discussed in class. Anderton Units 39, 93, 94 and 95 Bamford Chp 6 Gillespie pp 88, 89 and 90 Stanlake Chp 51 www.bized.co.uk Economics Topic 11, International economics; virtual developing country trade field trip; virtual learning arcade www.s-cool.co.uk/a-level/economics What is an Exchange Rate? How is the Exchange Rate determined? Exchange Rate Systems V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 25
  • Learning objectives Suggested teaching activities Learning resources www.tutor2u.net/ Introduction to Currency Valuation Global Foreign Exchange Markets Fixed and Floating Exchange Rates Candidates should: explain how exchange rates are set under floating, fixed and managed systems and be aware of the prevalence of different systems Teacher explains that an exchange rate can be determined by market forces and an equilibrium price can be determined just like any commodity – key difference being the price is measured in terms of another currency. Candidates should: show the setting of exchange rates in supply and demand diagrams Teacher explains and presents the concept of a ‘floating exchange rate’ – learners then asked to list any factors which might affect the demand for supply of currency. Learners are given price and supply and demand for currency data and required to plot graphs and identify equilibrium price (exchange rate). http://wps.pearsoned.co.uk/ema_uk_he_sloman _economics_6/ Chp 24 slides plus explanation evaluate the alternative systems Candidates should: analyse the factors which affect the exchange rate Apply influences via demand and supply analysis to show changes in equilibrium. Class worksheet which requires learners to predict how changes in economic circumstances, particularly the balance of payments, might affect a country’s exchange rate. Extension Questions can build in different degrees of difficulty to challenge more advanced learners. Candidates should: show how fluctuations in the exchange rate impact upon the economy Research recent trends in local exchange rate and analyse the links to the real economy, prices and employment. Candidates should: show how a government may influence the rate of exchange Use demand and supply analysis to show impact of foreign exchange market intervention explain the idea of ‘fixed exchange rates’. V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 Anderton Unit 39 Bamford Chp 6 Gillespie p 90 26
  • Learning objectives Suggested teaching activities Learning resources Stanlake Chp 51 Learners discuss factors that might lead to a government’s decision to fix exchange rates. www.s-cool.co.uk/a-level/economics The Marshall-Lerner Condition Economic Effects of a Depreciating Currency: http://tutor2u.net/economics/content/topics/exch angerates/depreciation.htm Economic Effects of a Strong Currency: www.tutor2u.net/economics/content/topics/exch angerates/econ_effects.htm Candidates should: be familiar with the Marshall-Lerner condition Candidates should: evaluate the effectiveness of exchange rate policy Teacher provide numerical example of Marshall-Lerner condition. Learners asked to decide whether the Marshall-Lerner condition might suggest that a formal devaluation of the currency in their own country would help to solve a balance of payments deficit. Marshall-Lerner condition: http://en.wikipedia.org/wiki/Marshall– Lerner_Condition Learners judge the policy against checklist of desirable qualities and assess suitability with respect to own economy. Ask learners to research the potential impact of a change (in both directions) of their country’s exchange rate on its key macroeconomic indicators. Learners research and present their findings to the whole class. Extension Introduce the J curve effect and provide opportunity for advanced learners to explain this potential effect. Data response question based on exchange policy – answers discussed in class. Candidates should: understand the meaning of V1 3Y09 Teacher presents and explains the concepts of equilibrium and disequilibrium. Cambridge International AS and A Level Economics (9708) – from 2014 Anderton Units 30 and 96 Bamford Chp 6 27
  • Learning objectives Suggested teaching activities Learning resources equilibrium and disequilibrium in the balance of payments Learners study their own country’s balance of payments figure over time and identify why balance of payments are likely to be in disequilibrium. Gillespie pp 92 and 93 Stanlake Chp 61 www.bized.co.uk Developing country trade field trip www.imf.org World Economic Outlook and balance of payments data www.s-cool.co.uk/a-level/economics Problems of Balance of Payments Disequilibria Candidates should: understand how a disequilibrium may arise, analyse the effects of a disequilibrium on the economy and its position globally Learners form groups, examine the USA balance of payments – identify the extent of the disequilibrium and analyse the effect of this on the USA economy and the global economy – learners given time to carry out research and each group will give a presentation using power point slides – each group presentation assessed by teacher and rest of the class. Compare economic characteristics and performance of surplus and deficit countries discussion on the problems of running a deficit. Learners look at a case study of a deficit country followed by class questions. Candidates should: understand the different policy approaches Teacher produces a grid to contrast nature, targets, advantages and disadvantages of the different policies and learners form groups and each group completes grid – class discussion. Anderton Unit 96 Bamford Chp 7 Gillespie pp 90 and 93 Stanlake Chp 61 www.bized.co.uk Economics Topic 11, International economics; virtual developing country trade field trip www.imf.org World Economic Outlook V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 28
  • Learning objectives Suggested teaching activities Learning resources www.s-cool.co.uk/a-level/economics How does a government reduce a balance of payments deficit? Government policy towards the Balance of Payments: www.tutor2u.net/economics/revision-notes/asmacro-balance-of-payments.html Candidates should: show how demand management, supply side and exchange rate policies operate to correct a balance of payments disequilibrium Learners form groups and judge the policies against checklist of desirable qualities. Candidates should: evaluate the effectiveness of the different policies used to improve the balance of payments Learners produce grid to contrast nature, targets, advantages and disadvantages of the different policies and decide which they think might be the most effective. Candidates should: comment on the possible conflicts between policy objectives on inflation, balance of payments and the exchange rate Learners to debate the proposition that ‘There is never a conflict between low inflation, a strong balance of payments and a high exchange rate’. V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 Bamford (Second edition) p 269 29
  • Scheme of work – Cambridge International AS and A Level Economics (9708) Unit 6: Basic economic ideas Recommended prior knowledge This unit builds on the basic economic ideas and in particular the concept of economic efficiency. Outline The unit considers the idea of economic efficiency in terms of both productive and allocative efficiency. Teaching time Based on a total time allocation of 360 guided learning hours for this Cambridge International AS and A Level course, it is recommended that this unit should take about 10 hours. Learning objectives Suggested teaching activities Learning resources Candidates should: understand the concept of efficient or optimum resource allocation Bamford (p 129) has a useful self-assessment task on the problems arising from the increasing demand for timber. Economic efficiency: www.tutor2u.net/economics/content/topics/co mpetition/efficiency.htm Learners should then try and find other examples, in the newspapers and on the internet, of scarce resources not being used in an optimum way; it would be especially useful if learners could find local examples in their own countries. They could then give a presentation to the group on their findings and this should generate a useful discussion of why efficient resource allocation is so important, given the scarcity of resources, leading to an informed analysis and evaluation of the concept. Candidates should: understand the meaning of productive efficiency Bamford, Chp 8, pp 128–129 Anderton, Unit 16, p 100 Stanlake, Chp 19, pp 180–181 The Production Possibility Curve and Economic Efficiency: http://tutor2u.net/economics/content/topics/intr oduction/production_possibility_frontiers.htm This should then enable learners to understand and discuss the conditions which are necessary for it to exist. V1 3Y09 Learners should be able to use a production possibility curve to show the difference between a position on the curve and one inside it; Bamford (p 130), Anderton (p 101) and Stanlake (p 180) all have clear examples of this. Questions 1 (p 100) and 3 (a) (p 102) in Anderton should help learners gain a clearer understanding of the concept. Bamford, Chp 8, pp 130–131 Anderton, Unit 16, pp 100–101 Stanlake, Chp 19, pp 180–181 Gillespie, p 34 Cambridge International AS and A Level Economics (9708) – from 2014 30
  • Learning objectives Suggested teaching activities Learning resources Candidates should: understand the meaning of allocative efficiency and be able to compare and contrast it with productive efficiency The conditions for a Pareto optimum outcome should be explained. Bamford, Chp 8, p 132 Anderton, Unit 16, pp 101–102 Stanlake, Chp 19, pp 180–181 Gillespie, p 34 Learners should be able to draw a diagram of perfect competition to show P=MC, as in Bamford (p 130) and decide whether this would constitute a Pareto optimum outcome. Extension Advanced learners might be introduced to the theory of Second Best and reminded of second best example relating to a negative externality created by a monopoly firm and how government intervention might address this problem. Questions 2 (p 101) and 3 (b) (p 102) of Anderton should prove helpful. Formative assessment The self-assessment tasks in Bamford (p 132) will be useful as a way of concluding the unit and assessing if the concepts have been fully understood. A time constrained essay 9708 Paper 42 June 2012 question 7 written in class. Essays then marked in class and then discussed. V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 For access to 9708 past question papers go to Teacher Support at http://teachers.cie.uk 31
  • Scheme of work – Cambridge International AS and A Level Economics (9708) Unit 7: The price system and theory of the firm Recommended prior knowledge Previous work on the price system and parts on efficiency follow on from the previous unit (Unit 6). Context This unit applies some of the ideas of economic efficiency, and takes further the ideas on the price system. It is also crucial to the understanding of why governments might need to intervene in the price system. Outline The material starts with price, marginal utility theory and budget lines and then goes on to look at short-run and long-run production functions, the distinction between a firm and an industry, the objectives of firms, the different market structures and an assessment of the conduct and performance of firms. It also looks at reasons for the survival of small firms and for the growth of firms. Finally, it looks at the demand for and the supply of labour and the determination of wages, including the role of trade unions and the government. Teaching time Based on a total time allocation of 360 guided learning hours for this Cambridge International AS and A Level course, it is recommended that Unit 7 should take about 60 hours. Learning objectives Suggested teaching activities Learning resources Candidates should: understand the Law of Diminishing Marginal Utility and its relationship to the derivation of an individual demand schedule and curve Learners think of examples where marginal satisfaction may decline as more units of a good are consumed, such as a hamburger, an ice cream or a bar of chocolate. www.tutor2u.net/ Consumer Choice and Utility Candidates should: have an understanding of the equimarginal principle Learners need to understand the MU/P formula; the second self-assessment task in Bamford (p 135) is very useful. V1 3Y09 The first self-assessment task in Bamford (p 135) and the table and figures in Stanlake (p 65) are helpful in showing learners the distinction between total and marginal utility. This should lead on to a discussion of why economists need to try and measure the level of happiness or satisfaction that a person receives from the consumption of a good. Cambridge International AS and A Level Economics (9708) – from 2014 Bamford, Chp 9, pp 134–135 Anderton, Unit 69, p 452 Stanlake, Chp 8, pp 65–67 Gillespie, p 6 Bamford, Chp 9, p 135 Stanlake, Chp 8, p 67 Gillespie, p 6 32
  • Learning objectives Suggested teaching activities Candidates should: have an awareness of the limitations of marginal utility theory Learners need to consider how difficult it is to try and measure the level of happiness or satisfaction that a person receives from the consumption of a good; they should think of some possible examples. Candidates should: have an understanding of budget lines and of the income and substitution effects of a price change Learners need to be able to construct a budget line to show the possible combinations that can be purchased with a given sum of money; it should be remembered, however, that indifference curves have been removed from the syllabus. Learning resources Bamford, Chp 9, pp 135–136 Anderton, Unit 10, p 67 Stanlake, Chp 8, pp 64–65 Gillespie, p 5 The table and figures and the two self-assessment tasks in Bamford (p 136) are helpful in enabling learners to understand the income and substitution effects of a price change. The income and substitution effect is given a good treatment in Anderton (p 67) and table 10.2 and question 2 on the same page are useful; the treatment of this topic is also very good in Gillespie (p 5). Extension Advanced learners might be introduced to the Revealed Preference approach to examining income and substitution effects. Candidates should: have an understanding of the shortrun production function, including fixed and variable factors of production, total product, average product and marginal product Learners need to be able to draw diagrams from data given which show changes in marginal and average product. www.tutor2u.net/ Short-run Production The data question in Anderton on holiday cottages (p 318) would help to reinforce understanding of the concepts of fixed and variable. costs Bamford, Chp 9, pp138–139 Anderton, Unit 46, pp 304–306 Anderton, Unit 48, pp 315–318 Candidates should: understand the Law of diminishing returns or Law of variable proportions The data questions in Anderton (p 308) on diminishing returns in the fishing industry are useful and should help learners to understand the concept. www.tutor2u.net/ Law of Diminishing Returns Stanlake, Chp 37, pp 342–346 Gillespie, p 28 The information on diminishing returns in agriculture in Anderton (pp 317– 318) is also helpful and should stimulate discussion and develop analytical skills. V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 www.s-cool.co.uk/a-level/economics The Law of Diminishing Marginal Returns 33
  • Learning objectives Suggested teaching activities Learning resources Class worksheet: learners complete blank table relating to output, average product and marginal product – then given additional information regarding variable and fixed costs – average total costs calculated and graph plotted illustrating effect of diminishing marginal returns on cost curves. Candidates should: understand the long-run production function and the concept of returns to scale Learners need to understand, and be able to distinguish between, the concepts of increasing, constant and decreasing returns to scale; question 5 in Anderton (p306) is useful in helping them to understand these terms. Anderton also has a useful example of increasing returns at petrol stations (p 307). Bamford, Chp 9, p139 (excluding isocosts and isoquants) Anderton, Unit 46, pp 306–308 Stanlake, Chp 37, pp 346–347 Gillespie, p 32 The data response questions in Stanlake (p 349) are also helpful. Candidates should: understand how an economist’s definition of costs would be different from that of an accountant Question 1 in Anderton (p 309) and question 5 (a) and (b) (p 312) are good on the distinction between the two types of costs. It is important to stress that normal profits assume that opportunity costs are part of total costs – this is the key distinction between economist’s definition of costs and accountant’s definition. www.bized.co.uk Production Measuring the Costs of Production: www.tutor2u.net/economics/content/topics/bus economics/cost_measures.htm A numerical example illustrating the above could be provided. www.s-cool.co.uk/a-level/economics Costs and their Curves Anderton, Unit 47, pp 309–312 Candidates should: be able to distinguish between marginal cost and average cost and, in the short-run cost function, between fixed costs and variable costs V1 3Y09 Learners should be able to draw these cost curves; there are useful examples in Bamford (pp 152–153) and Stanlake (pp 123–126). Cambridge International AS and A Level Economics (9708) – from 2014 Bamford, Chp 9, pp 151–152 Stanlake, Chp 13, pp 122–126 34
  • Learning objectives Suggested teaching activities Learning resources Candidates should: be able to explain the shape of the SRAC curve Gillespie is particularly good on the concepts of marginal, average and total costs (pp 27–30). Gillespie, pp 27–30 Candidates should: understand the long-run cost function and be able to explain the shape of the LRAC curve Learners need to be able to draw the appropriate diagrams; there are examples in Anderton (p 319), Stanlake (pp 127–129) and Gillespie (pp 31– 32). www.tutor2u.net/ Long Run Costs of Production www.bized.co.uk Economies of Scale www.s-cool.co.uk/a-level/economics Economies of Scale www.tutor2u.net/ Diseconomies of Scale Bamford, Chp 9, pp 152–154 Anderton, Unit 49, pp 319–324 Stanlake, Chp 13, pp 126–129 Gillespie, pp 31–32 Candidates should: understand both internal and external economies of scale recognise the relationship between economies of scale and decreasing costs Candidates should: understand the relationship between elasticity and marginal, average and total revenue for a downward-sloping demand curve V1 3Y09 Learners should try and find examples in newspapers of firms which are aiming to benefit from economies of scale, perhaps as a result of a merger, such as in the banking or airline industries; they should then report back to the group, identifying the types of economy of scale discovered. There are some useful questions on the supermarket Walmart taking over Asda in Anderton (p 324). Learners need to understand that PED will vary along the length of a demand curve; there are diagrams showing this in Bamford (p160) and Gillespie (p 8). www.tutor2u.net/ Business Revenue and Turnover Teacher provides learners with price quantity tables plus a blank total revenue table – learners complete total revenue table – learners divide graph into two halves and plot price against question (d) in top half and total revenue against question (d) in bottom half – learners then required to calculate point elasticity at given prices in top diagram. www.s-cool.co.uk/a-level/economics Revenues and their Curves Cambridge International AS and A Level Economics (9708) – from 2014 Bamford, Chp 9, pp159–160 Anderton, Unit 47, p 311 35
  • Learning objectives Learning resources Extension Advanced learners given opportunity to use graphs to explain relationships between price elasticity of demand, changes in price and changes in total revenue. Candidates should: be able to distinguish between the concepts of a firm and an industry Suggested teaching activities Stanlake, Chp 9 pp 78–79 Gillespie, p 8 Learners need to consider the concept of the industrial concentration ratio; they should then research different industries, comparing the concentration ratios, and report back to the group. Bamford, Chp 9, p 161 Anderton, Unit 51, pp 336–337 Stanlake, Chp 45, p 427 Gillespie, p 44 There are some examples in Anderton (pp 336–337). Candidates should: understand the traditional objective of a firm, profit maximization be able to distinguish between normal and abnormal profit Candidates should: have an awareness of other possible objectives of a firm Each learner should choose a firm and research it to find out what its declared objectives are; this could be done on the internet and through any literature produced by the firm, such as the annual report and learners should try and focus on local firms in their own country. The learner could then give a presentation to the rest of the group using power point slides. The profit maximising condition is crucial and learners need to be able to analyse this. There are some useful case studies on Rentokil (Stanlake, p 341) and Chefaid (Bamford, p 163). www.s-cool.co.uk/a-level/economics Profit www.tutor2u.net/ Measuring Business Profits Alternatives to Profit Maximisation Theories Profit Maximisation and Sales Revenue Bamford, Chp 9, pp 161–163 Anderton, Unit 50, pp 325–331 Stanlake, Chp 36, pp 336–341 Gillespie, p 46 Anderton is very good on the goals of firms (pp 325–331), including behavioural theories, and there is some good material on the role of the shareholder and on stakeholder power. Candidates should: understand the structure of markets as explained by the number of buyers and sellers, the nature of the product and information and the degree of freedom of entry The competition road map in Bamford (p165) is a very helpful starting point. The learners could then work in groups, each group concentrating on one particular market structure; within the group, each learner should try and find out information about one or two firms to discover the characteristics of the market structure. The groups would then report back to the whole class, leading to a discussion of the different types of market structure. V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 www.s-cool.co.uk/a-level/economics Market Structure I Market Structure II www.tutor2u.net/ Gains from Competitive Markets and Industries Long Run Equilibrium under Competition Sources of Monopoly Power Oligopolistic Markets 36
  • Learning objectives Suggested teaching activities Learning resources Economics of Contestable Markets Bamford, Chp 9, pp 164–179 Candidates should: understand the features of the different market structures: perfect competition, monopoly, monopolistic competition and oligopoly There are some interesting case studies in the various textbooks, such as trains (Anderton, pp 355–356), football clubs (Anderton, p 356) and soft drinks (Stanlake, pp 425–426). Anderton, Unit 51, pp 332–337 Anderton, Units 53–56, pp 343–366 Anderton, Unit 58, pp 372–376 Stanlake, Chps 41–45, pp 384–439 Gillespie, pp 35–43 Candidates should: Understand and apply the concept of a contestable market Learners brainstorm a list of 20 industries and then classify them into contestable and non-contestable markets. Bamford (second edition) pp116-7 Anderton pp372-6 Candidates should: have an understanding of the conduct of firms in terms of pricing policy and non-price policy. This should include price discrimination, price leadership models and mutual interdependence in the case of oligopolies Learners should look in newspapers and magazines for examples of different prices charged for goods and services and report their findings back to the rest of the group; this should lead to a useful discussion and evaluation of different pricing policies. www.tutor2u.net/ Pricing Strategies and Company Objectives Price Discrimination under Monopoly Learners should try and find examples of price discrimination, such as in transport and telephone services. They should also look for examples in newspapers and magazines of other ways, apart from price, in which firms compete. Bamford, Chp 9, pp 164–179 Anderton, Unit 51, pp 332–337 Anderton, Units 53–56, pp 343–366 Anderton, Unit 65, pp 420–425 Stanlake, Chps 41–45, pp 384–439 Gillespie, pp 35–43 Anderton is very good on price fixing and collusion (pp 420–425) and there is a useful section on OPEC with some data response questions which should help develop learners` understanding of this topic. Candidates should: have an understanding of the performance of firms in terms of output, profits and efficiency Each learner researches a firm on the internet and through published information, such as the annual report, to discover as much information as possible on its output, profits, efficiency, pricing and possible links with other firms; a lot of information can be obtained from newspapers and magazines. Bamford, Chp 9, pp 164–179 Anderton, Units 53–56, pp 343–376 Stanlake, Chp 45, pp 427–439 Gillespie, p 44 The learner then reports back to the group on the information obtained. V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 37
  • Learning objectives Suggested teaching activities Learning resources Candidates should: be able to make comparisons between firms with regard to economic efficiency, barriers to entry, price competition, non-price competition and collusion Formative assessment might use a compilation of multiple-choice questions on the theory of the firm taken from part past papers – answers discussed in class. For access to 9708 past papers and other secure online support materials go to Teacher Support at http://teachers.cie.org.uk/ Candidates should: understand why small firms can survive Learners should choose a small firm and try to find out why it has remained small and what advantages this might give it over a larger firm; they should then report back to the group. This should lead to a useful discussion on why small firms can survive. www.bized.co.uk Survival of the Small Firm Bamford, Chp 9, pp 154–159 Anderton, Unit 38, p 255 Stanlake, Chp 40, pp 371–382 Gillespie, p 45 Candidates should: have an understanding of the reasons for the growth of firms Learners should also research a firm that has grown in order to try and discover the reasons for such growth and then give a presentation to the group on that firm; Anderton has the example of Ford and Kwik–Fit (pp 418– 419). Anderton, Unit 64, pp 413–419 Candidates should: understand the meaning of, and the factors affecting, the demand for labour Learners should consider examples of derived demand so that they show that they have understood the concept. They should work in groups and consider the various factors that would influence the demand for labour, both generally and in particular occupations, and then report back to the whole class. www.s-cool.co.uk/a-level/economics The Demand for Labour There is an interesting example of the demand for workers in banking in Anderton (pp 466–467). Candidates should: have an understanding of the derivation of an individual firm’s demand for a factor using marginal revenue product V1 3Y09 Bamford, Chp 9, pp 141–142 Anderton, Unit 21, pp 462–467 Stanlake, Chp 17, pp 161–162 Gillespie, p 47 Learners complete worksheet tables calculating ARP and MRP and then plot graphs of both – discuss relationship between ARP and MRP. Learners should try and think of examples where it might not be very easy to calculate the MRP of a worker. Cambridge International AS and A Level Economics (9708) – from 2014 38
  • Learning objectives Suggested teaching activities Learning resources Candidates should: understand the meaning of, and the factors affecting, the supply of labour. Learners should work in groups and consider the various factors that could affect the supply of labour; they should think of the different reasons why people work and report back to the whole class. www.s-cool.co.uk/a-level/economics The Supply of Labour This should lead to an interesting discussion and evaluation of why people work, with a stress on both monetary and non-monetary factors. www.tutor2u.net/ Supply Side Policies for the Labour Market www.bized.co.uk The Labour Supply Curve Bamford, Chp 9, pp 142–144 Anderton, Unit 72, pp 468–478 Stanlake, Chp 17, pp 162–170 Gillespie, p 47 Candidates should: understand how wages are determined under free market forces (competitive product and factor markets). Each learner should choose an occupation e.g. nurse, solicitor, teacher, sales assistant, waitress, sports stars etc and research the wages that operate in that industry; this should be followed by a presentation by each learner and this should lead to a useful class discussion and analysis of why there are such wide wage differentials in an economy e.g. higher pay for risktaking, working in poor condition and having to work unsocial hours. . An interesting topic for discussion would be the differences in male/female earnings in developed and developing countries and whether these had narrowed over time; this would reinforce skills of application. www.tutor2u.net/ Equilibrium Wages Trade Unions Economic Effects of the National Minimum Wage Wage Differences between Occupations Economic Rent and Transfer Earnings www.s-cool.co.uk/a-level/economics The Equilibrium Wage Trade Unions The Minimum Wage www.bized.co.uk The Minimum Wage Bamford, Chp 9, pp 148–150 Anderton, Units 73–75, pp 479–505 Stanlake, Chp 18, pp 170–178 Stanlake, Chp 22, pp 206–216 Gillespie, pp 48–50 V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 39
  • Learning objectives Suggested teaching activities Learning resources Candidates should: have an understanding of the role of trade unions and government in wage determination. Learners need to consider the role of trade unions in the presentation; there is a lot of useful information on trade unions in Anderton (pp 493–496). Trade Union protection: www.tutor2u.net/economics/content/topics/lab ourmarket/pay_differences.htm Learners prepare for wage negotiation role play – case study material provided in advance.– learners form groups to represent employers, trade unions, government, other businesses that might be affected by the dispute– each group presents and rest of learners vote which group of negotiators they would support and justify their choice. Monopsony: http://en.wikipedia.org/wiki/Monopsony Extension Opportunities for advanced learners to introduce economic theory, for example, monopsony, to support their case. Candidates should: understand why wage differentials exist in an economy and they should have an awareness of the concepts of economic rent and transfer earnings V1 3Y09 Consideration also needs to be given to an analysis of the role of government in wage determination; this would be a good opportunity to have a debate on the arguments for and against government intervention, such as through a national minimum wage. Cambridge International AS and A Level Economics (9708) – from 2014 40
  • Scheme of work – Cambridge International AS and A Level Economics (9708) Unit 8: Government intervention in the price system Recommended prior knowledge This unit builds on the material covered on government intervention in the price system, the concept of efficiency and the existence of monopolistic elements in an economy. Context This unit follows on from the previous one (Unit 7), the price system and theory of the firm, especially in terms of a critical examination of the different market structures, the possible sources of market failure and the existence of market imperfections. It considers the microeconomic policies of government before going on to look at government macroeconomic policies in the remaining units. Outline This unit considers the possibilities of market failure and market imperfections and goes on to look at the policies which could be adopted to try and correct these, including an analysis of the objectives of government microeconomic policy. Finally, the concept of privatisation is considered. Teaching time Based on a total time allocation of 360 guided learning hours for this Cambridge International AS and A Level course, it is recommended that Unit 8 should take about 20 hours. Learning objectives Suggested teaching activities Learning resources Candidates should: understand the sources of market failure. Learners should revisit Unit 3 of this scheme of work and consider the characteristics of externalities, public goods, merit goods and demerit goods. www.bized.co.uk Market Failure Learners then need to research newspapers and magazines, and use the internet, to try and find current examples of these forms of market failure, preferably in their own country. Each learner can then give a presentation to the rest of the group on the examples discovered, explaining clearly why they are a form of market failure. V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 www.tutor2u.net/ Introduction to Market Failure www.s-cool.co.uk/a-level/economics What is Market Failure? Bamford, Chp 10, pp 181–185 Gillespie, pp 23–26 41
  • Learning objectives Suggested teaching activities Learning resources Anderton, Unit 16, pp 102–103 Question 2 in Anderton (p 106) on market failure in the car market is a useful example. Stanlake, Chp 21, pp 200–206 The questions on the case study of health in Stanlake (p 205) are also helpful. Candidates should: understand the meaning of a deadweight loss. Learners need to be able to draw and explain a diagram of the deadweight loss, such as in Bamford (p 182). www.tutor2u.net/ Key Term – Deadweight Loss Candidates should: have an understanding of market imperfections, including the existence of monopolistic elements. Learners need to consider the existence of monopolistic elements in different industries; they could work in groups to look at various industries which have monopolistic elements, especially in their own countries, and report back to the whole class on the imperfections they have discovered. www.s-cool.co.uk/a-level/economics Market Structure 1 The article on the milk industry in Bamford (p 182) gives an interesting example and the self-assessment tasks which accompany it are useful on monopolistic elements in a market; there are also more general selfassessment tasks (p 183). www.tutor2u.net/ Price and Output under Competition Anderton, Unit 68, p 443 Gillespie, p 24 Anderton, Units 18–22, pp 113–143 Anderton has some useful questions on the markets in computer software (p 112), trains (p 113) and telephones (p 114). Candidates should: understand the objectives of government microeconomic policy, especially in relation to the concepts of efficiency and equity. Learners need to ensure that they fully understand the difference between efficiency and equity. Bamford, Chp 10, pp 186–187 Anderton, Unit 61, pp 388–394 Gillespie, pp 23–24 Equity is concerned with ‘fairness’ and this involves making a value judgement; learners should discuss this area of ‘normative’ economics by considering when it might be appropriate for a government to intervene in a market. They should look at newspapers and magazines, and use the internet, to try and find examples of such government intervention, especially in their V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 42
  • Learning objectives Suggested teaching activities Learning resources own country. Candidates should: understand the policies to correct market failure, such as regulation. Learners should research the policies employed in their own country to correct market failure and assess their effectiveness. www.s-cool.co.uk/a-level/economics What can be done about externalities? www.tutor2u.net/ The Redistribution of Income and Wealth www.bized.co.uk Income Distribution Anderton, Unit 19, pp 120–125 Anderton, Units 20 and 21, pp 128–141 Anderton, Unit 38, pp 248–257 Anderton, Units 68 and 69, pp 442–457 Stanlake, Chps 24 and 25, pp 226–246 Gillespie, p 63 Candidates should: understand the policies towards income and wealth distribution. Bamford has an interesting example in relation to the fishing industry (p 188). Bamford, Chp10, pp 187–192 Candidates should: be able to assess the effectiveness of government policies. Learners should choose one country and analyse the distribution of income and wealth in that country; they should then explain the policies used in that country to try and bring about a fairer distribution, concluding with an evaluation of the effectiveness of such policies The self-assessment tasks on this topic in Bamford (p 190) are useful. Bamford, Chp10, pp 187–192 Candidates should: understand the meaning of the concept of privatisation. Learners should choose examples of privatisation in various countries, including their own, and find out as much as possible about them in order to try and discover whether there has been an improvement in the quality of service provided; they can then report back to the whole group. www.bized.co.uk Privatisation This should be followed by a debate on the arguments for and against privatisation. www.s-cool.co.uk/a-level/economics The Advantages of Privatisation The Disadvantages of Privatisation www.worldbank.org V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 43
  • Learning objectives Learning resources Bamford (p 196) has a useful self-assessment task in relation to water supply, rail transport and telephone services. Anderton has a useful summary of privatisation in the UK (pp 438–440). Candidates should: have an understanding of the problems of transition when central planning in an economy is reduced. Suggested teaching activities The Impact of Infrastructure Privatisation Learners should research a former centrally planned economy which is going through a process of transition towards more of a free market, such as Russia, Poland or the Czech Republic, and find out the various problems which have been experienced and how they have been tackled. Bamford, Chp 10, pp 192–200 Anderton, Unit 67, pp 433–441 Stanlake, Chp 35, pp 329–334 Stanlake, Chp 46, pp443–446 Gillespie, p 63 The self-assessment task in Bamford (p 197) has some very interesting questions on this topic. V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 44
  • Scheme of work – Cambridge International AS and A Level Economics (9708) Unit 9: Theory and measurement in the macroeconomy Recommended prior knowledge This unit builds on the knowledge of measurement in the macroeconomy.. Context The material focuses on theory and measurement in the macroeconomy and then leads on to the various macroeconomic problems and the different policies that can be adopted to try and overcome these problems. Outline The unit begins by looking at the use of national income statistics and then goes on to consider different definitions of the money supply and the concept of the circular flow of income. It then considers the Keynesian and monetarist schools of thought on the economy. Finally, it looks at the sources of money in an economy, the relationship between the money supply, the price level and output and the determination of interest rates. Teaching time Based on a total time allocation of 360 guided learning hours for this Cambridge International AS and A Level course, it is recommended that this unit should take about 45 hours. Learning objectives Suggested teaching activities Learning resources Learners need to have a good understanding of the various terms; the first self-assessment task in Bamford (p 203) and question 2 in Anderton (p 157) are useful. www.tutor2u.net/ Measuring National Income Candidates should: have an understanding of national income statistics and there are four areas to focus on: 1. The use of national income statistics as measures of economic growth and living standards www.bized.co.uk Economic Growth GDP and Standard of Living Bamford, Chp 11, pp 201–209 Anderton, Unit 25, pp 156–163 V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 45
  • Learning objectives Suggested teaching activities Learning resources Gillespie, pp 52–53 2. Money and real data; the GDP deflator Learners need to be aware of the possible impact of inflation on the value of money so that they are able to distinguish between the nominal and real value of an amount of money; they should find out the current rate of inflation in their own country and discuss the potential impact of this on the value of money. The second self-assessment task in Bamford (p203) is useful on the distinction between nominal and real values. 3. The comparison of economic growth rates and living standards over time and between countries Learners need to research these comparisons in their own country over a period of time and between various countries today. The case study in Stanlake (p 257) is a good example of a comparison over time. The table in Bamford (p 204) and the data in Anderton (pp 162–163) are good on the comparison between countries. www.bized.co.uk GDP and International Comparisons www.imf.org Country Information Stanlake, Chp 26, pp 250–258 4. Other indicators of living standards and economic development Learners should consider just how difficult it is to measure living standards; they should work in groups and discuss all the factors that would need to be taken into account before reporting back to the class. Bamford (p 209) has some interesting data using the Human Development Index. Class form groups each group produces a list of key points that they would make to answer question 5 from past paper 9708 Paper 41 Nov 2011. Candidates should: understand the meaning of the term money supply and be able to distinguish between broad and narrow definitions of the money supply V1 3Y09 Learners need to appreciate the idea of different forms of money and of a liquidity spectrum; they should consider exactly what is meant by money in different circumstances and try and rank these in terms of liquidity. Gillespie (p 68) has a very good explanation of the different measures of the money supply. Cambridge International AS and A Level Economics (9708) – from 2014 www.bized.co.uk Measuring Poverty and Living Standards 9708 past examination paper: Nov 2011 Paper 41 For access to 9708 past papers go to Teacher Support at http://teachers.cie.org.uk www.tutor2u.net/ Measuring the Money Supply Bamford, Chp 11, pp 209–211 Anderton, Unit 36, pp 234–240 Anderton, Unit 82, pp 552–557 46
  • Learning objectives Suggested teaching activities Learning resources Teacher provides a definition of liquidity – learners arrange a given list of financial assets in order of liquidity – class discuss choices. Stanlake, Chp 7, pp 55 Stanlake, Chp 33, pp 304–316 Gillespie, pp 64and 68 Learners directed to end of unit quiz at www.bized.co.uk www.bized.co.uk Introduction to macroeconomics Candidates should: have an understanding of government accounts, including the government budget and deficit financing Learners should try and find information on the government accounts in their own country and analyse these. Candidates should: understand the concept of the circular flow of income between households, firms, government and the international economy Learners need to have a clear understanding of this concept; the diagrams in Bamford (p 212), Anderton (p 156), Stanlake (pp 248–250) and Gillespie (p 54) are all very helpful. The data question in Anderton on Preparing a Budget (pp 239–240) and the self-assessment task on a budget deficit in Bamford (p 211) are very useful. Learners should discuss the concept, recognising the importance of the link between income and expenditure. Extension Opportunity to allow advanced learners to build circular income flow diagrams on whiteboard and then use for further class discussion. Candidates should: understand the differences between the Keynesian and monetarist schools of thought on how the macroeconomy functions www.bized.co.uk The Circular Flow of Income www.tutor2u.net/ The Circular Flow of Income and Spending www.s-cool.co.uk/a-level/economics The Circular Flow of Income Bamford, Chp 11, pp 212 Anderton, Unit 25, pp 156–157 Stanlake, Chp 26, pp 248–250 Gillespie, p 54 www.bized.co.uk Introduction to Keynesians Introduction to Monetarists There are useful summaries of the two approaches in Bamford (p 212) and Gillespie (p 87). V1 3Y09 Learners should research the key features of the two approaches and the background to the development of these theories and then give a presentation on their findings, evaluating the strengths and weaknesses of each; it might also be a suitable topic for a debate, comparing and contrasting the two schools of thought. Bamford, Chp 11, p 212 Stanlake, Chp 25, pp 240–242 Cambridge International AS and A Level Economics (9708) – from 2014 www.s-cool.co.uk/a-level/economics Do Keynesians and Monetarists Agree? 47
  • Learning objectives Suggested teaching activities Learning resources Extension Advanced learners deliver group presentation. Gillespie, p 87 Candidates should: understand the meaning of the aggregate expenditure function (AE), its components and their determinants Learners need to have a good understanding of the necessary diagrams; Bamford (pp 215–218) and Gillespie (pp 84–86) are very helpful. www.s-cool.co.uk/a-level/economics The 45 Degree Diagram The self-assessment tasks on the Singapore economy in Bamford (p 214) and the data response questions in Stanlake (p 282) are both useful. www.bized.co.uk Consumption, Investment and Growth understand the concept of income determination using the AE-income and the withdrawal/injection approaches Direct learners to www.economicsonline.co.uk (macroeconomics aggregate demand video) www.tutor2u.net/ Household Savings Behaviour Inflationary Gaps Investment Class discussion based on the video. Bamford, Chp 11, pp 212–219 Anderton, Units 35 and 36, pp 227–235 Stanlake, Chp 27, pp 259–264 Stanlake, Chp 29, pp 279–283 Stanlake, Chp 52, pp 503–511 Gillespie, pp 60–62 and 84–86 Candidates should: have an understanding of inflationary and deflationary gaps and be able to distinguish between the full employment level of income and the equilibrium level of income Extension Opportunity for advanced learners to draw relevant diagrams on whiteboard – rest of class decide whether diagrams are correct and if not, why not. Candidates should: understand the concepts of the multiplier and the accelerator Learners need to have a good grasp of how the multiplier works; the selfassessment task in Bamford (p 218), question 3 in Anderton (p 215) and the examples in Stanlake (pp 503–505) are all very useful. The accelerator also needs to be understood; question 4 in Anderton (p 208) and question 3 in Anderton (p 522) are helpful. be able to distinguish between autonomous and induced investment V1 3Y09 www.bized.co.uk The Multiplier Principle www.tutor2u.net/ The National Income Multiplier Anderton, Unit 33, pp 214–215 Cambridge International AS and A Level Economics (9708) – from 2014 48
  • Learning objectives Suggested teaching activities Learning resources Candidates should: understand the sources of money supply in an open economy (commercial banks/credit creation, central bank, deficit financing, total currency flow) Learners should try and find information on the sources of money in their own country. www.tutor2u.net/ The Quantity Theory of Money Learners should also attempt to obtain data on the money supply and the rate of inflation in their own country over a period of time and see what conclusions can be drawn about their relationship. Bamford, Chp 11, pp 222–223 Anderton, Units 84 and 85, pp 564–573 Stanlake, Chp 34, pp 323–324 Stanlake, Chp 66, pp 628–629 Gillespie, pp 67 and 74–75 Candidates should: have an understanding of the relationship between the money supply, the price level and output as explained by the Quantity Theory of Money The self-assessment task in Bamford (p 224) is very good on the link between changes in the money supply and changes in the rate of inflation. Question 1 (p 565) and 3 (p 566) in Anderton are very good in helping to explain the Quantity Theory of Money. There is also a useful discussion of the link between inflation and the money supply in the Applied Economics section in Anderton (pp 567–568) and a helpful data question on housing and the money supply (pp 568–569). Candidates should: understand the demand for money and the determination of interest rates, including both the Liquidity Preference and the Loanable Funds theories Learners should research the different rates of interest in their own country and try to explain why there can be such a diversity of rates rather than just one single rate. www.tutor2u.net/ The demand for money Interest rates and economic activity Teacher establishes distinction between ‘active’ and ‘idle’ cash balances and learners research Keynesian demand for money theory and then answer questions on class worksheet – answers discussed in class. Bamford, Chp 11, pp 224–226 Anderton, Units 82 and 83, pp 555–563 Stanlake, Chp 16, pp 149–160 Gillespie, pp 61 and 69–72 Learners need to have a clear understanding of the diagrams; Bamford (pp 224–226) and Gillespie (pp 69–72) are particularly helpful. The self-assessment task on Japanese interest rates in Bamford (p 226) and questions 1 (p 559) and 2 (p 560) in Anderton are useful; the latter question, however, uses interest rates which refer to the UK financial market and so it might be better to construct and use a similar table of local figures. V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 49
  • Scheme of work – Cambridge International AS and A Level Economics (9708) Unit 10: Macroeconomic problems and policies Recommended prior knowledge This unit builds on previous work on macroeconomics. Context The material follows on from the previous unit on theory and measurement in the macroeconomy and brings the course to a conclusion by focusing on the main macroeconomic problems and the effectiveness of the various policies that could be adopted to try and overcome such problems. Outline The unit begins with an analysis of economic growth and development, including the factors contributing to economic growth, the costs and benefits of growth and the characteristics of developing economies. It then examines the different types of unemployment and the causes and consequences of unemployment and goes on to consider the relationships between the internal and external value of money, the balance of payments and inflation and between unemployment and inflation. It then considers the various policies that could be adopted to try and overcome these problems, including fiscal policy, monetary policy, exchange rate policy and supply side policy. The unit ends with a consideration of the possible conflicts between the various policy objectives and an evaluation of the policy options to deal with these problems. Teaching time Based on a total time allocation of 360 guided learning hours for this Cambridge AS and A Level course, it is recommended that this unit should take about 45 hours. Learning objectives Suggested teaching activities Learning resources Candidates should: understand the meaning of the concepts of economic growth and development. Worksheet on economic growth in developed and developing countries looking at types of economies and causes of economic growth and highlighting useful data sources. Learners match the type of economy with selected countries (www.bized.co.uk/learn/economics/development/growth/worksheet.htm) www.bized.co.uk Economic Growth Virtual Developing Country Causes of Economic Growth Homework or class task to support the teaching and learning of the costs and benefits of ecomomic growth in developing countries. – small groups of learners prepare a presentation which outlines the costs and benefits of economic growth. The following points may help in the planning: V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 www.tutor2u.net/ Economic Growth Development Economics Categorising Countries Economics of Development Measuring Standard of Living Limitations of GDP as a Measure of Living 50
  • Learning objectives Suggested teaching activities • • • • • • • • • Do developing countries have the bureaucratic infrastructure to ensure taxes are collected and used appropriately? What institutional and cultural changes are necessary to help developing countries take advantage of economic growth? What are the opportunity costs of economic growth to developing countries? Are factors such as pollution, environmental degradation and a reduction in biodiversity likely to affect developing countries more than developed countries - if so, why? Will the costs and benefits of economic growth differ depending on where the developing country is situated, for example, subSaharan Africa, Asia, and South America? Is a lack of regulation and legislation likely to lead to developing countries being exploited by firms from the developed world such that the benefits of any investment are not felt by the population as a whole? How far will corruption and the nature of the political system determine the benefits and costs of economic growth? How important is the establishment of property rights a factor in the benefits gained from economic growth? Are the opportunity costs of economic growth, as we understand it, too high for developing countries? (www.bized.co.uk/educators/1619/economics/development/activity/costben.htm) Candidates should: be able to give a definition of economic growth and development. Learners need to be able to clearly distinguish between the concepts of growth and development; a useful starting point would be for them to work in groups and consider exactly what is involved in the idea of development, so that they can see how it differs from growth, and then report back to the whole class. Learning resources Standards United Nations Human Poverty Index Less Developed Countries www.jusbiz.org Economic Growth, Development and Poverty Does Economic Growth Benefit the Poor? Virtual Developing Country Borderless Business – Transnationals and the Global Economy The Missing Link – Debt and Trade International Debt Role Play www.worldbank.org Topics in Development Data on Member Countries www.imf.org Country Information World Economic Outlook www.tutor2u.net/ Benefits of Economic Growth Costs of Economic Growth Sustainable Economic Growth www.bized.co.uk Costs of Economic Growth – Who Pays? Bamford, Chp 12, pp 229–231 Anderton, Unit 24, p 151 Anderton, Unit 26, pp 164–172 Anderton, Unit 99, p 679 Stanlake, Chp 30, pp 285–286 Gillespie, pp 105–106 and 97–101 Anderton (p 679) and Gillespie (p 97) have useful distinctions between V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 51
  • Learning objectives Suggested teaching activities Learning resources the first, second and third world countries. Candidates should: have an understanding of the indicators of comparative development and underdevelopment in the world economy, including economic, monetary, non-monetary and demographic factors Each learner should research one particular developed country and one underdeveloped country and give a presentation to the whole class on what they found out, pointing out the differences in the level of development. Candidates should: understand the characteristics of developing economies: population growth and structure, income distribution, economic structure, employment composition, external trade and urbanisation in developing economies and the nature of dependency, including the role of multi-national corporations and external debt The self-assessment tasks in Bamford (p 236) on the characteristics of developing countries are very useful. Bamford, Chp 12, pp 231–236 Anderton, Unit 99, pp 679–685 Stanlake, Chp 65, pp 615–616 Gillespie, pp 97–101 There is a lot of scope in this unit for using a range of international examples for presentations, discussions, analysis and evaluation. The information obtained from the research will be useful in enabling learners to build up a picture of what is meant by a developing country. Bamford, Chp 12, pp 231–236 Anderton, Units 99 and 100, pp 679–691 Stanlake, Chp 65, pp 615–625 Gillespie, p 97–101 Anderton has a useful summary of some of the main factors which affect the level of development of a country (pp 680–685) and the data questions on Mozambique, Chile, Egypt, Tanzania and Romania which follow the tables (p 685) are helpful. There is also a useful data question on Egypt in Anderton (pp 690–691) and a case study on health in Stanlake (p 624). The Jusbiz website www.jusbiz.org has an interesting role play on international debt. Candidates should: have an understanding of the distinction between actual and potential growth in national output. The distinction between actual and potential growth is best explained by a production possibility diagram, such as in Bamford (p 236) or Stanlake (p 513). Bamford, Chp 12, p 236 Anderton, Unit 26, pp 164–165 Stanlake, Chp 53, pp 512–513 Gillespie, p 105 Candidates should: understand the factors contributing to economic growth. Learners should work in groups and consider what they think would be the major factors explaining why the growth rate of some countries is much higher than that of other countries and then report back to the whole class. Anderton has a useful summary of the factors affecting the UK's growth Bamford, Chp 12, pp 236–238 Anderton, Unit 26, pp 165–172 Stanlake, Chp 53, pp 513–514 Gillespie, pp 105–106 V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 52
  • Learning objectives Suggested teaching activities Learning resources rate (pp 167–171). Candidates should: understand the costs and benefits of growth, including using and conserving resources. Learners should research the relative costs and benefits of economic growth (the Tutor2u website will be very helpful as a starting point) and then have a debate on the topic. Bamford, Chp 12, pp 238–240 Anderton, Unit 27, pp 172–179 Stanlake, Chp 53, pp 514–515 Gillespie, p 105 Candidates should: have an understanding of unemployment Learners in groups list the main types and causes of unemployment. www.tutor2u.net/ Measuring Unemployment The Natural Rate of Unemployment The Causes of Unemployment The Economic and Social Costs of Unemployment Class discuss: • What are the implication for government spending and taxation? • What are the economic costs of unemployment? • What are the social costs of unemployment? • What are the costs of unemployment to the individual? Candidates should: understand the meaning of full employment and the natural rate of unemployment Learners should work in groups and consider the various reasons why a person might be out of work and then report back to the whole class. Candidates should: have an understanding of the causes of unemployment. Learners should also consider some of the possible reasons why certain countries have much higher rates of unemployment than other countries. www.s-cool.co.uk/a-level/economics Unemployment Can the Natural Rate of Unemployment change? The Main Types of Unemployment Anderton, Unit 29, pp 186–190 Anderton, Unit 86, pp 581–588 Gillespie, pp 76–79 Learners also need to consider why it might actually be quite difficult to establish precisely just how many people may be out of work in a particular country; Anderton is very good on the different measures of unemployment (pp 188–189). Bamford, Chp 12, pp 241–242 Stanlake, Chp 56, pp 531–542 The self-assessment tasks in Bamford (p 242) and the data response questions in Stanlake (p 541) are useful. Learners analyse the main causes of unemployment in their own country. understand the consequences of unemployment. V1 3Y09 Learners should work in groups and discuss the consequences of unemployment, both for the people concerned and for the economy as a whole, and then report back to the class. Cambridge International AS and A Level Economics (9708) – from 2014 53
  • Learning objectives Suggested teaching activities Learning resources Candidates should: understand the inter-connectedness of problems. They should be aware of the links between macroeconomic problems and their interrelatedness, for example: Learners should work in groups and consider why and how the different macroeconomic problems are related; a spider diagram, showing the link between the different macroeconomic problems, could be a good learning exercise and would help learners answer questions requiring a broad view. www.tutor2u.net/ The Phillips curve The Phillips Curve and the NAIRU www.s-cool.co.uk/a-level/economics The Phillips Curve Gillespie, p 80 • the relationship between the external and internal value of money Ideally, learners should divide into three groups, with each one focusing on a particular relationship, and then give a presentation to the whole class. • the relationship between the balance of payments and inflation The self-assessment tasks on the relationship between unemployment and inflation in Bamford (p 244) are useful. Bamford, Chp 12, pp 243–244 Anderton, Unit 87, pp 589–595 Anderton has a lot of helpful information on the Phillips Curve (pp 593– 595) and some useful data on unemployment and inflation in selected countries. • the relationship and trade-off between inflation and unemployment Candidates should: understand the objectives of macroeconomic policy, such as stabilisation and growth Stanlake has an interesting case study on the links between inflation and unemployment. Stanlake, Chp 59, pp 564–571 Learners need to be aware of the different macroeconomic objectives; they should work in groups, consider why governments might wish to intervene in the macroeconomy and then give a presentation to the whole class – presentations then assessed by rest of class and teacher. www.tutor2u.net/ The Objectives of Macroeconomic Policy There are useful summaries of the different objectives in Bamford (p 246) and Stanlake (pp 284–286). www.s-cool.co.uk/a-level/economics The Main Macroeconomic Objectives The Importance of Macroeconomic Objectives Bamford, Chp 13, p 246 Anderton, Unit 24, pp 151–155 Stanlake, Chp 30, pp 284–289 Candidates should: have an understanding of the various V1 3Y09 Learners should choose a particular developing country and try and find out as much as possible about the policies of trade and aid that apply to it Cambridge International AS and A Level Economics (9708) – from 2014 www.tutor2u.net/ Potential Gains from Trade 54
  • Learning objectives Suggested teaching activities Learning resources policies towards developing countries that could be adopted, including policies of trade and aid and then give a presentation to the whole class; the World Bank and IMF websites will be particularly useful. Anderton has a very detailed account of aid (pp 716–726) and useful data response questions on aid to developing countries. www.imf.org Country Information www.worldbank.org Data on Member Countries Bamford, Chp 13, pp 246–251 Anderton, Units 103 and 104, pp 710–727 Stanlake, Chp 65, pp 615–625 Gillespie, pp 99–101 Candidates should: understand the different types of policy, including the aims and instruments of each policy and how each is used to control inflation, stimulate employment, growth and development and correct balance of payments disequilibrium Learners need to understand the key features of each of the four types of policy; they need to work in groups and research how one particular country has used these policies to achieve its objectives and assess how effective they were. Alternatively, they could divide into four groups with each one examining the ways in which these policies have been operating in their own country to try and achieve particular macroeconomic objectives. The group research would be followed by a presentation to the rest of the class. Learners write an in-class structured essay discussing the effectiveness of any one stabilisation policy carried out by their own government. www.s-cool.co.uk/a-level/economics Inflation Fiscal Policy Monetary Policy The Exchange Rate and the Balance of Payments www.tutor2u.net/ Policies to Control Inflation Policies to Reduce Unemployment Government Policy towards the Balance of Payments Fiscal Policy Monetary Policy Economic Effects of a Depreciating Currency Supply Side Economics www.bized.co.uk Economic Growth Policies Unemployment Policy Inflation Policy Using Fiscal Policy Using Monetary Policy Candidates should: be able to assess the effectiveness V1 3Y09 The self-assessment tasks in Bamford (pp 252–255) are very useful. Cambridge International AS and A Level Economics (9708) – from 2014 Anderton, Unit 85, pp 571–580 Anderton, Unit 88, pp 596–603 55
  • Learning objectives Suggested teaching activities Learning resources of each of the policies: Anderton has some helpful material in the Applied Economics sections, such as on unemployment policy (pp 599–601) and the control of inflation (pp 614–617). Anderton, Units 91–92, pp 619–629 Anderton, Unit 96, pp 653–660 Stanlake, Chps 32–35, pp 296–334 Stanlake, Chp 51, pp 488–500 Stanlake, Chp 55, pp 526–530 Stanlake, Chp 57, pp 543–552 Stanlake, Chps 60–61, pp 572–588 Gillespie, pp 64–72, 82 and 88–9 i. ii. iii. iv. Fiscal Policy Monetary Policy Exchange Rate Policy Supply side policy Stanlake has useful data response questions and case studies on economic growth (pp 529–530), unemployment (pp 550–552), inflation (pp 579–581) and the balance of payments (pp 586–587). Formative assessment based on data response question from 9708 Paper 43 past paper June 2012. Candidates should: understand the conflicts between policy objectives and be able to evaluate policy options to deal with problems For access to 9708 past papers go to Teacher Support at http://teachers.cie.org.uk Learners need to consider the possible difficulties of trying to achieve particular policy objectives in terms of the potential trade-offs in other areas; they should work in groups and think of examples of such tradeoffs, followed by a presentation to the whole class. www.s-cool.co.uk/a-level/economics Conflicts between Macroeconomic Objectives Bamford, Chp 13, pp 257–258 Anderton, Unit 92, pp 626–629 Stanlake, Chp 62, pp 589–593 ® IGCSE is the registered trademark of Cambridge International Examinations. © Cambridge International Examinations 2013 V1 3Y09 Cambridge International AS and A Level Economics (9708) – from 2014 56