A-Level Economics Model Paragraphs

Year 12 microeconomics

The basic economic problem

1. Explain how a PPF can show efficient and inefficient outcomes.

Markets

1. Explain two causes of a price change.
2. Explain how the price mechanism responds to an increase in demand.
3. Explain how the price mechanism responds to an increase in supply.
4. Explain how the price mechanism responds to a decrease in demand.
5. Explain how the price mechanism responds to a decrease in supply.
6. Explain the link between PED and total revenue.

Market failure

1. Explain the tragedy of the commons.
2. Explain complete market failure.
3. Explain the effects of positive externalities in consumption.
4. Explain the effects of negative externalities in production.
5. Explain the effects of negative externalities in consumption.

Government intervention

1. Evaluate the effectiveness of an indirect tax on demerit goods
2. Evaluate the effectiveness of a minimum price on alcohol
3. Evaluate the effectiveness of pollution permits
4. Evaluate the effectiveness of a subsidy on gyms
5. Evaluate the effectiveness of a maximum price on rent
6. Evaluate the effectiveness of a minimum price on alcohol
7. Evaluate the effectiveness of the government providing libraries
8. Evaluate the effectiveness of provision of information about alcohol
9. Evaluate the effectiveness of provision of information about gyms
10. Explain the importance of behavioural economics
11. Explain how behavioural economics can be used to reduce market failure

Year 12 Macroeconomics

Macroeconomic performance

1. Explain the limitations of real GDP as a measure.
2. Explain how inflation is measured.
3. Explain the consequences of high inflation.
4. Explain the consequences of deflation.
5. Explain the consequences of structural unemployment.
6. Explain the consequences of cyclical unemployment.
7. Explain the consequences of real-wage unemployment.
8. Explain the consequences of slow economic growth.
9. Explain the consequences of high economic growth.
10. Explain the consequences of a slow trend-rate of economic growth.

Aggregate demand and aggregate supply

1. Explain the impact of an increase in aggregate demand.
2. Explain the impact of a decrease in aggregate demand.
3. Explain the impact of an increase in short-run aggregate supply.
4. Explain the impact of a decrease in short-run aggregate supply.
5. Explain the impact of an increase in long-run aggregate supply.

Macroeconomic policies

1. Explain the use of expansionary fiscal policy during a recession
2. Explain the disadvantages of expansionary fiscal policy during a recession
3. Explain the use of expansionary monetary policy during a recession
4. Explain the disadvantages of expansionary monetary policy during a recession
5. Explain the use of quantitative easing during a recession
6. Explain the use of contractionary fiscal policy to reduce inflation
7. Explain the disadvantages of contractionary fiscal policy to reduce inflation
8. Explain the use of contractionary monetary policy to reduce inflation
9. Explain the disadvantages of contractionary monetary policy to reduce inflation
10. Explain the use of supply-side policies for macroeconomic performance
11. Explain the disadvantages of supply-side policies

Trade-offs

1. Evaluate the trade-off between economic growth and inflation.
2. Evaluate the trade-off between economic growth and the current account.
3. Evaluate the trade-off between economic growth and the environment.
4. Evaluate the trade-off between economic growth and income inequality.
5. Evaluate the trade-off between low unemployment and inflation.
6. Evaluate the trade-off between low inflation and economic growth.
7. Evaluate the trade-off between low inflation and unemployment.
8. Evaluate the trade-off between low inflation and the current account.
9. Evaluate the trade-off between a balanced budget and economic growth.
10. Evaluate the trade-off between a balanced budget and unemployment.
11. Evaluate the trade-off between a balanced budget and inequality.

Year 13 Microeconomics

Costs and revenue

1. Discuss the importance of profit maximisation.
2. Discuss the importance of revenue maximisation.
3. Explain the short-run shutdown condition.
4. Explain the long-run shutdown condition.
5. Explain how a firm can benefit from internal economies of scale.
6. Explain how a firm can suffer from diseconomies.

Market structures

1. Explain two advantages of perfect competition.
2. Explain two disadvantages of perfect competition.
3. Explain two advantages of monopolistic competition.
4. Explain two disadvantages of monopolistic competition.
5. Explain two advantages of oligopolies.
6. Explain two disadvantages of oligopolies.
7. Evaluate two barriers to entry in the supermarket sector.
8. Explain two advantages of monopolies.
9. Explain two disadvantages of monopolies.
10. Explain two benefits of a natural monopoly.
11. Explain two disadvantages of a natural monopoly.
12. Explain two advantages of price discrimination.
13. Explain two disadvantages of price discrimination.
14. Explain two advantages of monopsonies.
15. Explain two disadvantages of monopsonies.

Government intervention

1. Evaluate the use of price controls in monopoly markets.
2. Evaluate the argument to nationalise natural monopolies.
3. Evaluate the use of deregulation in markets.
4. Evaluate the use of promoting small businesses in markets.
5. Evaluate the use of privatisation.

Labour markets

1. Explain how differences in demand for labour can cause wage differentials.
2. Explain how differences in supply of labour can cause wage differentials.
3. Explain how occupational immobility of labour can cause wage differentials.
4. Explain how geographical immobility of labour can cause wage differentials.
5. Explain how monopsony employers can underpay workers.
6. Evaluate the use of a minimum wage in perfect labour markets.
7. Evaluate the use of a minimum wage in monopsony labour markets.
8. Evaluate the use of training schemes in perfect labour markets.
9. Evaluate the use of better transport links in perfect labour markets.
10. Evaluate the use of the free market in reducing wage differentials.

Inequality

A lot of these are for AQA and NOT for Edexcel. Inequality shows up in macroeconomics for Edexcel.

1. Evaluate how wage differences cause income inequality.
2. Evaluate how the tax and benefits system influences inequality in the UK.
3. Evaluate how wealth and inheritance influences inequality in the UK.
4. Evaluate the use of the free market in reducing inequality.

Year 13 macroeconomics 

Globalisation and trade

1. Discuss how free trade can lead to lower prices.
2. Discuss how specialisation and trade can lead to higher output.
3. Explain the assumptions behind comparative advantage theory.
4. Discuss how tariffs can lead to higher prices.
5. Discuss how specialisation and trade can cause structural unemployment.

Exchange rates

1. Discuss how a currency depreciation can cause economic growth.
2. Discuss how a currency depreciation can cause inflation.
3. Discuss how a currency appreciation can slow down economic growth.
4. Discuss how a currency appreciation can cause disinflation.
5. Explain how lower interest rates can cause a currency depreciation.
6. Explain how an improvement in the trade balance can cause a currency appreciation.
7. Explain how higher interest rates can cause a currency appreciation.
8. Explain how a worsening of the trade balance can cause a currency depreciation.
9. Explain how a central bank can devalue their currency.
10. Explain how a central bank can revalue their currency.

Current account

1. Discuss how a current account deficit can slow down economic growth.
2. Discuss how a current account deficit can lead to a currency depreciation.
3. Discuss the problem behind a structural current account deficit.
4. Evaluate the use of tariffs to reduce a current account deficit.
5. Evaluate the use of supply-side policies to reduce the current account deficit.
6. Evaluate the use of a currency devaluation to reduce the current account deficit.
7. Evaluate the use of lower interest rates to reduce the current account deficit.
8. Evaluate the use of contractionary fiscal policy to reduce a current account deficit.

Economic development

AQA students do not need to know all of these, please check the spec.

1. Explain how primary product dependency can influence a developing country.
2. Explain how volatile commodity prices can influence a developing country.
3. Explain how the savings gap can influence a developing country.
4. Explain how poor education can influence a developing country.
5. Explain how poor infrastructure can influence a developing country.
6. Explain how corruption can influence a developing country.
7. Explain how access to credit can influence a developing country.
8. Evaluate the promotion of FDI as a policy in a developing country.
9. Evaluate spending on education as a policy in a developing country.
10. Evaluate spending on infrastructure as a policy in a developing country.
11. Evaluate the use of protectionism in a developing country.
12. Evaluate the use of aid in a developing country.
13. Evaluate the use of microfinance in a developing country.
14. Evaluate the use of buffer stock schemes in a developing country.
15. Evaluate the use of industrialisation in a developing country.
16. Evaluate the use of fair trade schemes in a developing country.
17. Evaluate the use of debt relief in a developing country.

Inequality

A lot of these are for Edexcel and NOT for AQA. Inequality shows up in microeconomics for AQA.

1. Discuss how economic growth can cause inequality.
2. Discuss how the tax and benefits system influences inequality in the UK.
3. Discuss how wealth and inheritance influences inequality in the UK.
4. Discuss how economic development influences inequality.

Financial markets

1. Explain the global financial crisis.
2. Explain the problem of asymmetric information in financial markets.
3. Explain the externalities from financial market failure.
4. Discuss the role of the central bank as the lender of last resort.
5. Explain the importance of reserve requirements in financial markets.

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