The specification is split into two main sections, the first section introduces students to microeconomic issues and the second section covers mainly macroeconomic issues. However, students should appreciate that microeconomics and macroeconomics are not entirely distinct areas of study. For example, microeconomic principles often provide fundamental insights into understanding aspects of the macroeconomy. Similarly, economic issues and problems often contain both a microeconomic and macroeconomic dimension. Students will be assessed through three examination papers. The first paper will examine mainly the topics that are outlined in Section 4.1 of the specification but economic principles included in Section 4.2 of the specification may also enrich a student’s response to some questions. Similarly, the second paper will examine mainly the topics that are outlined in Section 4.2 of the specification but may draw on economic principles from Section 4.1. The third paper will include topics from both sections of the specification and students, particularly when answering questions linked to the case study, will be expected to recognise when it is appropriate to use microeconomic and/or macroeconomic models. Students will be expected to acquire competence in quantitative skills that are relevant to the subject content and be familiar with the various types of statistical and other data which are commonly used by economists. They should be able to make relevant calculations from economic data and be able to interpret data presented in the form of index numbers. Examples of other relevant quantitative skills include: the construction and use of graphs and the application of statistical measures such as the mean, median and relevant quantiles. When delivering this specification, teachers should provide students with the opportunity to explore the disagreements that exist between economists and current economic controversies. During their course of study, they should come to appreciate why such disagreements exist and the basis upon which judgements are made. They will be assessed on their ability to use both quantitative and qualitative evidence to evaluate arguments and to support judgements relating to economic issues and problems. Students should be encouraged to develop a critical approach to economic models and methods of enquiry. They should appreciate that value judgements play an important role in economic decision making. They should understand the methodology of economics and the role of evidence whilst recognising that economics is a social science and that people’s behaviour is not necessarily rational or predictable. It is expected that students will acquire a good knowledge of trends and developments in the economy which have taken place over the past fifteen years and also have an awareness of earlier events where this helps to give recent developments a longer term perspective. Subject content: Individuals, firms, markets and market failure 1 Economic methodology and the economic problem 2 Individual economic decision making 3 Price determination in a competitive market 4 Production, costs and revenue 5 Perfect competition, imperfectly competitive markets and monopoly 6 The labour market 7 The distribution of income and wealth: poverty and inequality 8 The market mechanism, market failure and government intervention in markets The national and international economy 9 The measurement of macroeconomic performance 10 How the macroeconomy works : the circular flow of income, AD/AS analysis, and related concepts 11 Economic performance 12 Financial markets and monetary policy 13 Fiscal policy and supply-side policies 14 The international economy