1.

Scarcity, Choice and Opportunity Cost

a. Scarcity, choice and resource allocation
b. Concept of scarcity
i.
Inevitability of choices at all levels (individual, firm, government)
and concept of opportunity cost
c. Applications of concept of opportunity cost
i.
Production possibility curve: shape and shifts
ii.
Comparative advantage and exchange
iii.
Specialization and division of labor
iv.
Rational decision-making by consumers, firms and government
2. Resource Allocation in Competitive Markets
a. Determinants of demand and supply for goods and services
i. Determination of equilibrium market prices
ii. Role of price mechanism in resource allocation in a market based
economy
b. Applications of demand and supply analysis to various markets
i. Concept of elasticity of demand and supply
ii. Factors influencing the elasticity of demand and supply in the shortrun and long-run
3. Firms and How They Operate
a. Objectives of firms
i. profit maximization
1. alternative objectives
b. Costs of production
i. short run vs long run
ii. fixed cost vs variable cost
iii. internal vs external economies of scale
c. Spectrum of market competition
i. features of the different market structures
ii. barriers to entry
iii. behaviour of firms price discrimination price vs non-price
competition collusion vs competition mutual interdependence in
the case of oligopolies
iv. comparison on the basis of productive and allocative efficiency,
equity, innovation and consumer choice
4. Market Failure
a. Meaning of market failure and efficiency
b. Why markets may not work efficiently
i. Market imperfections
ii. Positive and negative externalities
iii. Public and merit goods
c. Inequalities in the distribution of income and wealth
5. Government Intervention in the Market
a. Rationale for government intervention
b. Methods by which government intervene in markets and the impact on
market outcomes
c. Government failure
6. Key Economic Indicators
a. National Income Statistics [Gross Domestic Product (GDP) and Gross
National Product (GNP)]

b. Inflation rate
c. Unemployment rate
d. Balance of Payments (BOP)
7. How the Macroeconomy Works
a. Income and Employment Determination
i. Key determinants of aggregate demand (AD) and aggregate supply
(AS)
ii. Determination of equilibrium level of output and price
iii. Meaning, components of Aggregate Expenditure (AE) and their
determinants Income determination using AE-Income approach
b. Macroeconomic Aims, Issues and Policies
i. Aims and issues Inflation Unemployment Economic growth
Balance of Payments
ii. Macroeconomic policies Fiscal policy Monetary Policy in the
context of Singapore Supply-side policies
8. International Economics
a. Benefits from trade
b. General pattern of trade between Singapore and the rest of the world.
c. Free trade and barriers to trade
d. Globalization and capital flows
e. Free Trade Agreements (FTAs)