Problematic Topics in GCE Edexcel Economics Unit 1 Identified

HideShow resource information
  • Created by: Lottie
  • Created on: 15-01-13 08:03
Preview of Problematic Topics in GCE Edexcel Economics Unit 1 Identified

First 308 words of the document:

Problematic Topics in GCE Edexcel Economics Unit 1 Identified
Students are generally weak in the following topics:
1. Production possibility frontier (PPF)
Unaware that PPF shows so many other things other than opportunity cost
living standards
growth and recession
workers are not easily transferred from one use to another
there is no opportunity cost to move from inside PPF towards the boundary
2. Consumer and producer surplus
Unable to differentiate instruction e.g. consumer surplus increase to the area vs. consumer
surplus increase by/ gain of consumer surplus is
Confusing both the areas between consumer and producer surplus due to pure memorising
without understanding
Remember consumer surplus at the top by c being before p/ coke and pepsi
3. Price elasticity of demand (PED)
Unaware that definition can be in the form of formula
Unaware that elasticity means sensitivity/responsiveness
Thinking that elasticity is gradient
Formula is written upsidedown d/p REMEMBER display pic
4. Cross elasticity of demand (XED)
Confuse substitute as having negative sign and complements as positive sign as a result of
memorising without pure understanding
Negative= move different ways
Positive= move the same way
5. Price elasticity of supply (PES)
Unable to draw the diagram accurately. Bear in mind, Inelastic PES must be drawn from the
horizontal axis while elastic PES from the vertical axis. It is due to the mathematical property
Unable to provide a satisfactory explanation for the meaning of inelastic supply or elastic
Inelastic the responsiveness of supply is less than proportionate to a change in price
Elastic: the responsiveness of supply is more than proportionate to a change in price
6. Taxation
Unable to tell the difference between direct and indirect tax

Other pages in this set

Page 2

Preview of page 2

Here's a taster:

Unable to distinguish between specific tax and advalorem tax. Bear in mind that specific tax
means tax for every unit is fixed irrespective of price while advalorem is a % upon the
value. The greater the value, the greater will be the divergence/ pivotal shifts
Unable to identify and shade the areas of incidence of tax correctly
7. Subsidy
Unable to identify and shade the areas of subsidy
8.…read more

Page 3

Preview of page 3

Here's a taster:

Does not understand why a `minimum line' is above equilibrium instead of below. Simple.
Bear in mind that in a free market with no government intervention, sometimes a market
price can really fall to a low level.
To the producers, that price may not be reflective of all the hard work that they have put in
and this explains the logic that they should have received more.
So, the minimum price they now receive must be above the equilibrium/ market price
11.…read more


Pabodha Marambe

Very very useful file


Similar Economics resources:

See all Economics resources »See all resources »