Checklist for JC 2 Economics students

Checklist for JC 2 Economics students

Here is a checklist to see if you have understood all the concepts necessary for the A level examination.

The Central Problem of Economics

  • Meaning of scarcity Prodution
  • Possibility Curve and its shape
  • Concept of opportunity cost

Theory of Demand and Supply

  • Interaction of demand and supply
  • Equilibrium price and output level
  • What is effective demand
  • The demand function
  • Link between individual and market demand curves
  • Shifts of demand curve versus movement along demand curve
  • Conditions of demand and supply
  • Price elasticity of demand, cross elasticity of demand and income elasticity of demand
  • Implications of elasticity on total revenue
  • Consumers’ surplus
  • The supply function
  • Link between individual and market demand curves
  • Shifts of supply curve versus movement along supply curve
  • Conditions of supply
  • Elasticity of supply and its application
  • Price floor and price ceiling
  • Taxes and subsidies

Production and Cost

  • Objectives of firms
  • Law of Diminishing Returns and Returns to Scale
  • Economies of Scale and Diseconomies of Scale
  • Minimum Efficient Scale (MES)
  • Reasons for existence of small firms
  • Coexistence of small and large firms in the same industry

Market Structure

  • Normal versus abnormal profits
  • Marginal Revenue (MR) and Average Revenue (AR)
  • Comparison of Monopoly, Monopolistic Competition, Oligopoly and Perfect Competition

Market Failure

  • Productive efficiency and allocative efficiency
  • Positive and negative externalities
  • Social costs and benefits
  • Free goods, merit goods and public goods
  • Monopoly power
  • Government intervention to correct market failure and its limitations

National Income

  • National output, Income and Expenditure
  • GDP and GNP
  • Gross versus Net
  • Nominal versus real
  • Factor cost versus market prices
  • National income statistics to compare over time and between countries
  • Problems of using national income statistics for measuring and comparing standard of living (SOL)
  • Purchasing power parity

Theory of Income Determination

  • Circular flow of income
  • 4 Macroeconomic Objectives and its conflicts
  • Withdrawals and injections
  • AD – AS approach — Determination of equilibrium
  • AE – Income approach – Determination of equilibrium
  • Inflationary and deflationary gaps
  • Multiplier process

International Trade

  • Balance of Payments
  • Terms of trade
  • Gains from trade
  • Principle of Comparative Advantage
  • Reasons for protectionism and its impact
  • Arguments for and against globalization and free trade
  • Fixed, floating and managed float exchange rates

Macroeconomic Objectives and Policies

  • Inflation: causes, measurement, consequences
  • Unemployment: causes, measurement, consequences
  • Economic growth: definition, factors affecting economic growth and consequences
  • Potential economic growth and actual economic growth
  • BOP disequilibrium: causes, consequences in both short-run and long-run
  • Fiscal policy: how it is used and its limitations
  • Monetary policy: how it is used and its limitations​
  • Supply-side policy: how it is used and its limitations
  • Prices and income policy: how it is used and its limitations