Economics

Course summary

Module 1 – Individuals, firms, markets and market failure This module, also known as microeconomics, is the study of how choices are made, by individuals, firms and the government. Resources are scarce but needs and wants are infinite so society must prioritise. Many choices occur in market places where prices determine who gets what. But sometimes markets fail. Then, governments make choices on behalf of the public by providing public services such as the NHS, education, roads, bridges and defence. We will study the role of the free market and the government in determining the most efficient and equitable allocation of scarce resources. We will study business performance such as what determines output, prices and profits in the context of firms’ costs, revenue and market structures. We will study the labour market to understand how a premier league footballer can earn 16 000% more than a care worker. Module 2 – The National and International Economy This module, also known as macroeconomics, is the study of the national and the global economy. We will study the relationship between total demand and total supply and how economies grow. In particular, we will consider how governments can help to increase the capacity of the economy through policies to improve such things as education, transport and health care. We will consider how governments can use fiscal policy (taxes and spending) to either increase total demand (during a slump) or decrease it during an inflationary boom. We will also investigate the role of the Bank of England and how it uses monetary policy (increasing and decreasing the cost of borrowing and more recently quantitative easing) to influence total demand. We will discuss which of these two sets of policies is most effective. The final part of Module 2 looks more widely at the international economy, including the impact of globalisation and international trade. We will also consider the most effective ways to support development in poorer countries.