Scheme of Work Edexcel AS Economics Unit 1 Competitive Markets: How he! Work " Wh! he!

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Week Link to
Syllabus
Contents Activities/ Reading Prep/ Assessment
1%& 1$'$1
What is the nature of economics?
An introd(ction to economics examinin) the f(ndamental
concept* efficient allocation of reso(rces$ hree ke!
+(estions are asked: what* how and for whom and different
mana)ement s!stems are investi)ated to see the different
approaches to answerin) these +(estions$ ,otential o(tp(t is
covered thro()h the (se of the ,,# dia)ram and the
distinction is made -etween positive and normative
statements$
.W/ 0otes " 1ia)rams on he Economic ,ro-lem "
2e! erms
Ma3or Concepts: 1ifferent Economic S!stems
Worksheet: .ntrod(ction to Economics
Article: Adam Smith " he 1ivision of 4a-o(r
M(ltiple Choice: he Economic
,ro-lem
Article: Entreprene(rship %
4aksi Mittal
Economic S!stem Wheel
&%5 1$'$&
What determines the demand for a g/s in a market?
We -e)in with constr(ctin) a definition for demand -efore
drawin) the demand c(rve and explainin) the relationship -6t
price and demand thro()h the law of diminishin) mar)inal
(tilit!$ he distinction -6t a movement alon) and a shift in the
demand c(rve is made with appropriate anal!sis$ he topic is
completed -! in%depth anal!sis of ke! concepts price* income
and cross elasticities of demand with mathematical modellin)
to show how important this is to -oth firms and )overnment$
.W/ 0otes " 1ia)rams on 1emand
Worksheet: ,rice Elasticit! of 1emand
Worksheet &: ,rice Elasticit! of 1emand
7(estions: ,E1
7(estions: ,E1 " 8E1
9eadin): Anderton ,$:;%<=
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What determines the supply of a g/s in a market?
1rawin) the s(ppl! c(rve and explainin) the relationship -6t
price and o(tp(t$ he distinction is made -6t a movement
alon) and a shift in the s(ppl! c(rve$ #(rther to this* the
importance of taxes (pon s(ppl!* -oth specific and ad valorem*
are explained and dia)rammatical anal!sis is (sed to explain
the impact on -oth cons(mers and firms thro()h identif!in)
who pa!s the -(rden of the tax$ ,rice elasticit! of s(ppl! is
modelled to explain this and mathematical calc(lations (sed$
.W/ 0otes " 1ia)rams on S(ppl! 9eadin): Anderton p$ 5;%>'
!usiness Confidence" not the
price of factor inputs is a
more important determinant of
supply in the short run#$
%iscuss &'()
Week Link to Syllabus Contents Activities/ Reading Prep/ Assessment
>%: 1$'$5
What determines the price of a g/s in a market?
1ia)rammatical anal!sis is (sed to show how s(ppl! and
demand determine e+(ili-ri(m price and o(tp(t in the
market$ #(rthermore* shifts in -oth s(ppl! and demand are
anal!sed to see how the! affect price and o(tp(t$ 1ia)rams
are (sed to show the ke! concepts of cons(mer and prod(cer
s(rpl(s and how a chan)e in price affects -oth$ he topic
closes with lookin) at the price mechanism* its three main
f(nctions ?rationin)* incentivisin) and si)nallin)@ and its
relevance in the context of commodit! and la-o(r markets$
.W/ 0otes " 1ia)rams on E+(ili-ri(m ,rice "
A(tp(t
Activit!: Cons(mer s(rpl(s ?reso(rce folder .@
9eadin): Anderton p$ >'%:;
Article on the .nvisi-le Hand " ,rice Mechanism
BWh! ,rices are Cood: Smith $vs$ 1arwinD ?reso(rce
folder .@
7(estions: Chan)es to Mkt$
Clearin) ,rice " A(tp(t
A-stract 7(estions: Cons(mer
S(rpl(s
Model Answers: Cons(mer
S(rpl(s
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*o+ might the change in the price of a g/s be e,plained?
A practical application of chan)es to s(ppl! and demand is
(sed in con3(nction with c(rrent examples from the )lo-al
commodit! markets$ A,EC and its (se of restrictin) s(ppl!
to control the price of oil is examined as well as the impact
that refiner! capacit! has on )lo-al oil prices and the
c(rrent trade em-ar)o with .ran and S!ria$ 1ia)rams are
(sed to s(pport how taxes and s(-sidises affect price and
o(tp(t$
.W/ 0otes " 1ia)rams on he ,rice Mechanism*
S(-sidies " axes
Activit!: S(-sidies " axes
'x1= Mark 7(estions: axes
and 9e)(lation of Mkts
Economics oda!: Sho(ld
S(-sidies #ood ,ricesE
?reso(rce folder .@
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What determines the +age rate for labour in a market?
We examine in )reater detail what factors affect the s(ppl!
of and demand for la-o(r: mar)inal reven(e prod(ct ?M9,@
and the mar)inal cost ?MC@ of la-o(r$ 1ia)rams are (sed to
show how chan)es to -oth factors affect wa)e rates$ he
-ackward -endin) s(ppl! c(rve for la-o(r with appropriate
(se of dia)rams is (sed to explain the s(-stit(tion and
income effect$ #(rthermore* we look at the effect that
trade (nions and the national minim(m wa)e has on wa)e
rates$ .f time* for extension p(rposes* monopson! in the
la-o(r market is investi)ated and dia)rams are (sed to show
how a minim(m wa)e can increase -oth emplo!ment and wa)e
rates$
.W/ 0otes " 1ia)rams on the 4a-o(r Mkt$
Article: S(per eachersF ,a!
Activit!: he 4a-o(r Mkt$
//C 0ews Article: Ail ,rice Creatin) 0ew Go-s
1rive ?reso(rce folder .@
Article: .mmi)ration " the U$2$ 4a-o(r Mkt$
?reso(rce folder .@
Article: Economics oda!* Women " the 4a-o(r Mkt$
-he strength of -rade .nions
is a more important factor in
the determination of industry
+age rates and employment
levels than the national
minimum +age#$ %iscuss &'()
# Article: 4a-o(r Mo-ilit!
looks like itFs here to sta!
Week Link to Syllabus Contents Activities/ Reading Prep
1=%1& 1$'$;
Why do some markets fail?
A definition is constr(cted: Bwhere an inefficient allocation
of reso(rces occ(r*D which leads to the investi)ation of what
ca(ses s(ch an o(tcome e$) imperfect market information*
la-o(r immo-ilit! and what can -e done to red(ce their
impact e$)$ -(ffer stocks* price floors etc$$$ Externalities*
-oth positive and ne)ative are examined with appropriate
dia)rammatic anal!sis and how s(-sidies and taxes can -e
(sed to correct this misallocation$ Welfare losses and )ains
are explained and shown dia)rammaticall!$ Cost -enefit
anal!sis ?C/A@ is covered with the (se of c(rrent examples
to hi)hli)ht the diffic(lt! in calc(latin) f(t(re disco(nt
rates etc$$$ #inall!* the distinction is made -etween p(-lic
and private )6s as well as merit and demerit )6s$
/,tension +ork0 explodin) and implodin) co-we-s with
dia)rams showin) the importance of ,E1 and ,ES$
.W/ 0otes " 1ia)rams on Mkt$ #ail(re
.W/ 0otes " 1ia)rams on Ather Ca(ses of Mkt$
#ail(re
Examples of External Costs
Case St(d! H 7s: Mkt$ #ail(re % Hi)her Ed(cation
Article on Cost /enefit Anal!sis BChoosin) Sides in
the 1r() War How the Atlantic Monthl! Cot it
Wron)D ?reso(rce folder ..@
//C 0ews Article: ,oll(tion F(ps -lood clot riskF
7(estions: Mkt$ #ail(re % CM
Crops
.sing Cost !enefit Analysis"
evaluate +hether Spain and
Portugal should resubmit a ne+
1oint bid to host the 2(22
World Cup &'()
1ata 9esponse: he Economic
Ial(e of Ed(cation ?reso(rce
folder ..@
1&%1' 1$'$<
*o+ do governments correct market failure?
A n(m-er of different schemes are examined: taxes*
s(-sidies* -(ffer stocks* trada-le poll(tion permits*
extension of propert! ri)hts* nationalisation and re)(lation
as well as eval(ated$ C(rrent examples of recent le)islation
are (sed to s(pport this topic and ill(strate how it affects
-oth firms and cons(mers$ What are the implications for
competitiveness etc$$$
.W/ 0otes " 1ia)rams on /(ffer Stocks " Ather
Strate)ies
.W/ 0otes on Cost /enefit Anal!sis
1etailed Example of C/A
0otes on Externalities " Covt .ntervention
Worksheets on 9oad ,ricin)
,rep: C/A on .-erian Goint /id
&=&& World C(p
1'%15 1$'$J
What is government failure?
his topic examines how )overnment in their attempt to
correct a pro-lem creates other pro-lems and the o(tcome
is a net welfare loss$ ,(-lic choice theor! is (sed to
(nderstand how wron) decisions can -e made$
Extension work: the (se of rational expectation theor! to
-rin) a-o(t a welfare )ain otherwise impossi-le to achieve$
.W/ 0otes " 1ia)rams on Covernment #ail(re
0otes on ,(-lic Choice heor!
,rep: ,(-lic Choice heor!