Theme 1 – Markets and Market Failure
When taught: September-April Year 12 (taught concurrently with Theme 2)
Specification link: Pearson Edexcel | Economics A Specification 2015
What are we learning?
How markets work (1)
- Demand
- Supply
- Price determination
The nature of Economics
- Positive and normative economics
- The economic problem
- Production possibility frontiers
- Specialisation and the division of labour
How markets work (2)
- Demand, supply and price determination recap
- The price mechanism
- Price Elasticity of Demand & Supply, Cross Price and Income Elasticities of Demand
- Consumer and Producer Surplus
- Indirect Tax and Subsidies
- Rational Decision Making and Alternative Views of Consumer Behaviour
Market failure and Government intervention
- Negative externalities in production
- Impact of; regulation, tax, information
- Positive externalities in consumption
- Impact of; regulation, subsidy, information
- Public goods
- Impact of; regulation, direct provision, information
- Information gaps
- Impact of; regulation, direct provision
Where does this fit into our past and future learning?
The fundamental economic theory of demand and supply is taught first to allow Theme 2 Aggregate Demand and Aggregate Supply to be delivered appropriately. The rest of Theme 1 introduces theoretical models and skills which allow students to analyse markets and act as the required foundation for Theme 3 as well as the specific elements of the labour market (Theme 3), the financial sector and exchange rates (Theme 4). Market failure is used to question the underlying assumptions of what happens if or when a market doesn’t work, and therefore, underpins much of the imperfectly competitive models explored in Theme 3.
How will we be assessed?
Assessments will consist of questions from past exam papers. There will be a combination of multiple choice, short-answer and extended answer, context-based questions.
What makes a strong piece of work in this topic? What are teachers hoping to see?
- Good knowledge and understanding of key ideas and concepts
- Effective use of subject specific terminology
- Appropriate use of provided contexts to exemplify answers
- Accurate calculations and/or fully labelled, accurate diagrams which are then used within written responses
- Fully developed analysis using chains of reasoning to add complexity and detail within written responses
What additional resources can I access outside of lessons?
