Course Content
Basic economic ideas and resource allocation
Candidates will explore the fundamental problem that underpins economics and a model highlighting some of the main issues that arise from this problem. They will examine the factors of production, their rewards and the advantages and disadvantages of specialisation in the use of resources. Candidates will assess the different economic systems that are used to allocate scarce resources, considering the strengths and weaknesses of these systems, and they will be introduced to some of the terms and methodology used by economists. The key concepts that are the main focus for this topic are: scarcity and choice; the margin and decision-making; time.
CAIE Alevel Economics (AS)

  • Positive statement: a statement that is about facts (objectivity), thus can be verified being true or false (but it doesn’t need to be true),
    • i.e. the statement is testable
  • Normative statement: a value judgment about whether a situation is subjectively desirable or undesirable,
    • i.e. an opinion

  • Ceteris paribus is a Latin word meaning ‘all other things being equal

  • Short run: at least one variable/factor is fixed, e.g. physical capitals such as size of factory, so the response to price changes is limited
  • Long run: all factors of production are variable, production is bounded by technology and government rules
  • Very long run: all factors of production, technology and government rules are variable
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