A-Level Economics Notes & Questions (AQA)
We have summarised the Economic concepts from the AQA Economics syllabus, and linked our A-Level Economics notes and questions to key topics on this page. We hope this will serve as a directory of our Economics resources for AQA Economics students in AS and A2. For some topics in AS, certain slides/concepts will not be applicable until A2, which is noted in the brackets. Concepts not applicable to the specification are also in brackets. Topics without links are either coming soon or not available, but a close substitute for these resources will be provided to students receiving mentoring or tuition from us.
Please do bookmark this page and share it if you find it helpful. AQA A2 Past papers and AQA AS Past papers are also available on the site to test/consolidate your knowledge.
AQA Economics (AS / Year 1)
3.1 The Operation of Markets and Market Failure – Microeconomics
3.1.1 Economic Methodology and the Economic Problem
– Scarcity, Opportunity Cost, Factors of Production
– Production Possibility Diagrams: PPF/PPCs
3.1.2 Price Determination in a Competitive Market
– Demand & Supply: Factors, Shifts, Diagrams & Equilibrium Price Determination
– Price, Income & Cross Elasticity of Demand; Price Elasticity of Supply
– Interrelated Markets: Joint Demand, Demand for Substitute Goods, Composite Demand, Derived Demand, Joint Supply
3.1.3 Production, Costs and Revenue
– Specialisation, Division of Labour, Money
– Costs: Total & Average Costs, Fixed & Variable Costs (Not required: marginal cost and law of diminishing marginal returns)
– Economies of Scale & Diseconomies of Scale, Long-Run Average Costs (LRAC)
– Revenues: Total (TR), Average (AR) (Not required: marginal revenue and law of diminishing marginal returns)
3.1.4 Competitive and Concentrated Markets
– Market Structure Determinants: No. of Firms, Product Differentiation & Ease of Entry (No diagrams required)
– Business Objectives (No diagrams required)
– Competitive Markets: Perfect Competition (No diagrams required)
– Monopoly and Monopoly power (No diagrams required, but need to show a monopoly raises price on a demand curve)
3.1.5 The Market Mechanism, Market Failure and Government Intervention in Markets
Market Mechanism
– Rationing, Incentive and Signalling Price Functions
Market Failure
– Public Goods, Quasi-Public Goods and the Free-Rider Problem
– Market imperfections: Asymmetric Information, Monopoly Power & the Immobility of Factors of Production
– Wealth & Income Inequality
Externalities: (No marginal cost/benefit required – can use supply/demand curves instead)
– Merit and Demerit Goods (Coming soon)
– Over-production in Negative Externalities
– Under-production in Positive Externalities
Government intervention
– Indirect Taxes
– Subsidies
– Price Controls: Maximum & Minimum Prices
– Other Intervention: State Provision of Public Goods & Regulation
– Government Failure: Inadequate/Imperfect Information, Conflicting Objectives & Admin/Opportunity Costs
3.2 The National Economy in a Global Context – Macroeconomics
3.2.1 The Measurement of Macroeconomic Performance
– Macroeconomic Objectives: Economic Growth, Price Stability, Low Unemployment & Stable Current Account
– Macroeconomic Indicators: Index Numbers; Real GDP, GDP per Capita, CPI/RPI, Productivity
3.2.2 How the Macroeconomy Works: the Circular Flow of Income, Aggregate Demand (AD) & Aggregate Supply (AS) Analysis
– Circular flow of income: Injections, Withdrawals
– Aggregate Demand (AD) & Aggregate Supply (AS): Equation, Components, Shifts, SRAS, LRAS
– Classical Long-Run Aggregate Supply (LRAS)
– The Accelerator Process (No calculations required)
– The Multiplier (Calculation required by dividing change in national income by initial injection. Other calculations not needed)
3.2.3 Economic Performance
– Economic Growth: Output Gaps, Demand/Supply-Side Shocks, Causes and Impact of Growth
– Employment/Unemployment: Measures, Types, AD/AS Factors (real wage and natural rate unemployment not required)
– Inflation/Deflation: Cost Push & Demand Pull Inflation, Commodity Prices
– Balance of Payments: Current Account
– Conflicts and Tradeoffs between Objectives
3.2.4 Macroeconomic policy
– Fiscal Policy: Government Spending, Types of Taxes, Budget Balance, Effects on AD/AS
– Monetary Policy: Changing Interest Rates, Money Supply, Exchange Rates; Monetary Policy Committee
– Supply-Side Policies: Government Spending on Education/Training, Tax Changes & Incentive Policies
AQA AS Past-Papers to consolidate AQA AS Economics knowledge.
Alternatively, use AQA AS Old Specification Papers to consolidate AS Microeconomics (Unit 1) and AS Macroeconomics (Unit 2) knowledge.
AQA Economics (A-Level / Year 1 & 2)
4.1 Individuals, Firms, Markets and Market Failure – Microeconomics
4.1.1 Economic Methodology and the Economic Problem
– Scarcity, Opportunity Cost, Factors of Production
– Production Possibility Diagrams: PPF/PPCs
4.1.2 Individual Economic Decision Making
– Utility Theory: Diminishing Marginal Utility, Total Utility, Utility Maximisation & Relationship with Demand
– Imperfect Information: Asymmetric Information
– Behavioural Economics: Rationality, Self-Control, Rules of Thumb, Anchoring, Availability, Social Norms
– Behavioural Economic Policies: Choice Architecture, Framing, Nudges, Default/Restricted/Mandated Choices
4.1.3 Price Determination in a Competitive Market
– Demand & Supply: Factors, Shifts, Diagrams & Equilibrium Price Determination
– Price, Income & Cross Elasticity of Demand; Price Elasticity of Supply
– Interrelated Markets: Joint Demand, Demand for Substitute Goods, Composite Demand, Derived Demand, Joint Supply
4.1.4 Production, Costs and Revenue
– Production Returns: Marginal, Total and Average Returns; Law of Diminishing Marginal Returns; Returns to Scale
– Specialisation, Division of Labour, Money
– Costs: Total Cost (TC), Average Cost (AC), Marginal Cost (MC), Fixed Cost (FC), Variable Cost (VC)
– Economies of Scale & Diseconomies of Scale, Long-Run Average Costs (LRAC), Minimum Efficient Scale (MES)
– Revenues: Total (TR), Average (AR), Marginal (MR)
– Technological Change & Creative Destruction: New Products; Impacts on Costs, Market Structure and Monopolies
4.1.5 Perfect Competition, Imperfectly Competitive Markets and Monopoly
– Profit Maximisation Rule
– Other Business Objectives: Survival, Growth, Quality, Sales Revenue Maximisation and Market Share
– Perfect Competition
– Oligopoly
– Monopoly and Monopoly Power
– Market Efficiency
– Price Discrimination
– Monopolistic Competition
– Contestability
– Market Efficiency: Allocative, Productive and Dynamic Efficiency
– Producer & Consumer Surplus
4.1.6 The Labour Market
– Marginal Productivity Theory of Labour
– Demand & Supply of Labour: Factors, Elasticity, Wage Determination
Labour Market Influences & Failure
– Monopsony (Labour market portion only)
– Labour Immobility, Trade Unions, Minimum Wage and Discrimination
4.1.7 The Distribution of Income and Wealth: Poverty and Inequality
– Wealth/Income Inequality: Lorenz curve and Gini coefficient, Government Redistribution Policies
– Absolute/Relative poverty
4.1.8 The Market Mechanism, Market Failure and Government Intervention in Markets
Market Mechanism
– Rationing, Incentive and Signalling Price Functions
Market Failure
– Public Goods, Quasi-Public Goods and the Free-Rider Problem
– Market Imperfections: Asymmetric Information, Monopoly Power & the Immobility of Factors of Production
– Nationalisation vs Privatisation
– EU/UK Competition Policies, Arguments For/Against Regulation, Regulatory Capture
Externalities: (No marginal cost/benefit required – can use supply/demand curves instead)
– Merit and Demerit Goods (Coming soon)
– Over-production in Negative Externalities
– Under-production in Positive Externalities
Government intervention
– Indirect Taxes
– Subsidies
– Price Controls: Maximum & Minimum Prices
– Other Intervention: State Provision of Public Goods & Regulation
– Government Failure: Inadequate/Imperfect Information, Conflicting Objectives & Admin/Opportunity Costs
4.2 The National and International Economy – Macroeconomics
4.2.1 The Measurement of Macroeconomic Performance
– Macroeconomic Objectives: Economic Growth, Price Stability, Low Unemployment & Stable Current Account
– Macroeconomic Indicators: Index Numbers; Real GDP, GDP per Capita, CPI/RPI, Productivity
4.2.2 How the Macroeconomy Works: the Circular Flow of Income, Aggregate Demand (AD) & Aggregate Supply (AS) Analysis
– Circular flow of income: Injections, Withdrawals
– Aggregate Demand (AD) & Aggregate Supply (AS): Equation, Components, Shifts, SRAS, LRAS
– Keynesian & Classical Long-Run Aggregate Supply (LRAS)
– The Accelerator Process (No calculations required)
– The Multiplier (Calculation required by dividing change in national income by initial injection. Other calculations not needed)
4.2.3 Economic performance
– Economic growth: Output Gaps, Demand/Supply-Side Shocks, Causes and Impact of Growth
– Employment/Unemployment: Measures, Types, AD/AS Factors, Real Wage and Natural Rate Unemployment
– Inflation/Deflation: Cost Push and Demand Pull Inflation, Commodity Prices
– Fisher’s Equation, Quantity Theory of Money, and Effects on Inflation
– Short-Run Phillips Curve (SRPC), Long-Run Phillips Curve (LRPC)
– Macroeconomic Objective/Policy Conflicts & Resolution
4.2.4 Financial Markets and Monetary Policy
– Type of Money & Banks, Debt and Equity
– Interest Rates and Relationship to Bond Prices (Coming soon)
– Central Banks: Functions, Monetary Policy Committee (MPC), Bank of England and Money Supply
– Monetary Policy: Transmission Mechanism, Changing Interest Rates, Money Supply, Exchange Rates
– Financial Market Regulation: Bank Failures, Liquidity/Capital Ratios, UK Regulatory Bodies, Moral Hazard & Systematic Risk
4.2.5 Fiscal Policy and Supply-Side Policies
– Fiscal Policy: Government Spending, Types of Taxes, Cyclical & Structural Budget Deficits, Effects on AD/AS
– Supply-Side Policies: Free-Market & Interventionist Policies, Effects on Natural Unemployment & Economic Growth
4.2.6 The International Economy
– Globalisation
– International Trade: Patterns of Trade, Trading Blocs (EU, WTO)
– Trade Restrictions: Tariffs, Quotas, Export Subsidies
– Comparative & Absolute Advantage
– Balance of Payments: Current, Capital & Financial Accounts, FDI Effects on Economies
– Current Account: Deficit & Surplus Causes, Implications, Imbalance Correction Strategies/Impact
– Exchange Rates: Floating, Fixed Exchange Rate Systems; Currency Unions
– Economic Development: Growth vs Development; Factors, Barriers and Policies for Development; Aid & Trade (Coming soon)
AQA A2 Past-Papers to consolidate AQA A2 Economics knowledge.
Alternatively, use AQA Old Specification Papers to consolidate all Microeconomics (Unit 1 & 3) and all Macroeconomics (Unit 2 & 4) knowledge.