Bridging work for new starters 2021 Course: Economics Name of student:

Bridging Work Basics

This booklet contains a number of tasks that students are expected to complete to a good standard in order to be able to be enrolled in this subject.

Please complete these tasks on A4 paper and bring them with you to the data drop day after GCSE Results Day.

The work handed in should be:

 written in black or blue ink on A4 lined paper  written in full sentences with no copying and pasting from external sources  have all compulsory tasks completed  have students full names on each sheet  multiple sheet should be connected together

This booklet also contains significant additional information and a range of optional tasks. We would encourage you to complete all the tasks including the optional ones to fully prepare for Sixth Form study.

Any problems then please email [email protected]

Contents

Page 3: Welcome to Economics

Page 4: Tasks

Page 12: Optional extra challenges

Page 13: Stretching your learning further

Page 15: Careers and HE

Page 16: Key terms for microeconomics

Page 17: Key terms for macroeconomics

Page 19: Long terms plan for Year 12

Welcome to Economics

There has never been a better time to study economics as the news is packed with stories about the economic impacts of Coronavirus. You may have seen articles about the on the economy with predictions of the worst financial crisis since 1706! It has been interesting to assess the policies used by the government and to reduce the effects of the crisis which include the new Furlough scheme as well as interest rates cut to their lowest point since 1694.

Of course, there is much more to the course than the effects of the virus and studying economics will help you view society in a mature, rational and logical way. There are life changing skills developed in studying economics such as ability to analyse, evaluate and interpret data. Many students comment on how they suddenly see the world in a different way. Oh, and if you are motivated by money it’s a great discipline to master.

There are two main strands to economics

 Microeconomics is the study of markets, individuals and businesses Should the rail industry be run by private firms or the state? Why is the pay of professional footballers so much higher than nurses?

 Macroeconomics looks at entire economies. The unemployment, inflation, and monetary challenges of countries, and continents How do we know whether the UK economy has entered a recession? What caused hyperinflation in Zimbabwe?

At Dixons we study Edexcel A Economics which is broken down into 4 Themes

Theme 1 Introduction to markets and market Failure (Micro) Theme 2 The UK economy – performance and policies (Macro) Theme 3 Business behaviour and the labour market (Micro) Theme 4 A global perspective (Macro)

Link to course information guide

Tasks - In this bridging work we will initially focus on MICROECONOMICS Introduction to microeconomics – section 1

a. Watch this Introductory video and complete the table below (on lined paper)

What is economics

What is microeconomics What is macroeconomics

b. Define the term scarcity c Define finite resource d Choose one resource and explain why it is scarce e In April 2020 the BBC reported that petrol prices, in the UK, were nearing £1 a litre. A key topic in economics is price determination.

Do you think this is a micro or macro topic? Justify your answer.

Remember, throughout your study of economics, it is important to keep up to date with national and global events. Good practice, after learning a new area of theory, is to practise applying it to a news story.

Look at the graph, “Oil price in 2020”, presented above . This is the type of information that is frequently used in economics questions. The 3 comments underneath help to explain the data. However, they are largely descriptive rather than demonstrating quantitative skills. g . What was the peak (highest) crude oil price in 2020 by month?

Month Price $ Jan Feb Mar Apr

h. Using the table above what was the mean price between January and April?

i. What was the lowest crude oil price in 2020 by month?

Month Price $ Jan Feb Mar Apr

j. Calculate the percentage change in the price of oil between the start and end point on the chart

Introduction to economics 2 We are going to look in more detail at the economic models that are an important part of price determination.

These are demand, supply and price equilibrium. These are core components in microeconomics.

Demand is the amount a customer is willing and able to buy, at a set price, at a given point in time.

Watch this short YouTube video to learn about demand.

Youtube clip on demand curves

Open the BBC story : Coronavirus: Why is the petrol price nearing £1 a litre? Petrol article

A. Read the whole article and pick out any factors that contributed to a change in demand. Note down the factors below.

b. Did demand increase or decrease?

c. Was this as a result of a change in the price of petrol or other factors?

d. Draw a diagram showing a fall in price leading to an increase in demand (use the earlier video to help)

Introduction to economics 3

We are going to look in more detail at the economic models that are an important part of price determination.

These are demand, supply and price equilibrium. These are core components in microeconomics.

a. State 4 key points about demand (link back to the previous youtube video):

Supply is the amount a producer is willing and able to provide, at a set price, at a given point in time.

Watch this short YouTube video to learn about supply.

Supply video

Open the BBC story: Coronavirus: Why is the petrol price nearing £1 a litre? The article

Consider the line from the article “It kicked off when Saudi Arabia failed to convince Russia to back production cuts that had been agreed with the other members of the Opec oil producers' group.”

B What does Opec stand for? What is its objective? (you will need to research this)

C Did Saudi Arabia want supply to increase or decrease?

D Show the effect of a shift left in the supply curve ( use the earlier video to help )

E Assume that Russia increased the supply of oil. Show the effect of a shift right in the supply curve

Introduction to economics 4

We are going to look in more detail at the economic models that are an important part of price determination. These are demand, supply and price equilibrium.

a. State 4 key points about supply (use the earlier video to help):

Price equilibrium is the price at which supply is equal to demand. On a graph it is, therefore, the point where the supply curve and the demand curve cross.

Watch this short YouTube video to learn about price equilibrium.

Video on price equilibrium

Petrol prices have been affected by changes in both supply and demand leading to a lower equilibrium price.

B) Draw a price equilibrium diagram to demonstrate a shift left in demand. Think through the steps logically. It should have a supply and demand curve. (again use the previous video to help)

c) Explain your diagram. What change did you make and why? How has it altered each axis? d) Draw a price equilibrium diagram to demonstrate a shift right in supply. Think through the steps logically.

e) Explain your diagram. f) Write a list of all the factors that contributed to the fall in the price of petrol.

g) One factor affecting price is the degree of competition in the market. If there is a lot of competition power sways towards the consumer as they have greater choice. If there is no, or little, competition the power sways towards to supplier. With reference to the petrol market, backed by information from the earlier article, explain how the degree of competition in a market can affect price.

Section 5 Introduction to macroeconomics

One of the key concepts in macroeconomics is gross domestic product

Watch this video on GDP GDP video

Then answer these questions

a What does GDP stand for? b. What does GDP measure? c. List the 4 sectors of the economy

d. Which industries make the greatest contribution to UK GDP?

e. Explain two limitations of using GDP to measure output

f Use this macroeconomic article to jot down as many problems for the UK economy as you can find g What policies have been used by the government and Bank of England to help reduce the problems of the current economic crisis. You will need to research this

Option for a challenge

Watch Tutor2U’s ‘Head start to A level economics’ series

Introduction to micro and macroeconomics

The changing world economy

Introduction to globalisation

Factors driving globalisation

For each video make notes about the key information that is included

Option for a real challenge

Try a course at Future Learn

Future learn economics courses

Stretching your learning further…

Every time you encounter some economics you improve your economic literacy and knowledge of this new subject. Here are some highly recommended sources to access.

Weblinks

Dixons economics twitter feed economy

The Guardian

Podcasts

Wake up to money

Business daily

Weekly economics podcast

Stephanomics

Extra economics learning

Khan academy

MJ Foodie

Recommended Books

Microeconomics

Mark Gavin: Pearson Edexcel A-level Economics A Student Guide: Theme 1 Introduction to markets and market failure

David Smith: Free lunch

Tom Wainwright: Narconomics

Tim Harford: The Undercover Economist

Macroeconomics

Quintin Brewer: Pearson Edexcel A-level Economics A Student Guide: Theme 2 The UK economy – performance and policies

Tim Harford: The Undercover Economist Strikes Back

HE & Careers

Why study economic A Level

Why study economics

Ucas' guide to economics at university

Career guidance for economists

Prsopect's guide to work as an economist

Glossaries

Essential terms for Year 12

20 Key terms for microeconomics

Term Definition Context Demand The amount of product that consumers are willing to buy at a 100 Ferraris would be bought by consumers if particular price the price was £40,000 Economic problem How to allocate scarce resources between competing uses The health service has to decide which patients to treat with a limited number of doctors External cost The costs to third parties not directly involved in an activity Pollution suffered by local residents as a result of living close to an airport External benefit The benefits to third parties not directly involved in an activity Extra revenue for local firms as a result of more passengers landing in a nearby airport Free market Where goods and services are allocated by private firms rather than Private firms such as River Island choose what the state clothes to produce and use demand and supply to set the price Income elasticity of demand The responsiveness of demand to a change in income Some goods such as own brand food may sell more units if incomes fall Indirect tax A tax imposed on the producer of a good or service VAT is a cost that has to be paid by a producer. It tends to be added onto the price to make a product more expensive Irrational behaviour Decisions made by consumers that don’t increase their overall Copying a friend in purchasing a type of clothing satisfaction may be more to satisfy the friend Market failure When the free market leads to an inefficient allocation of resources Market failure will include information gaps, failure to provide public goods and external costs Microeconomics The study of markets, individuals and businesses Looking at the oil industry or a firm such as British Airways

Minimum price The lowest price that a product can be sold for Alcohol could have a minimum price to make it more expensive to buy Price elasticity of demand The responsivness of demand to a change in price Demand for addictive products like cigarettes only changes slightly if price rises Price elasticity of supply The responsiveness of supply to a change in price It was difficult to increase the supply of PPE equipment during the virus crisis irrespective of the price Price equilibrium Where supply equals demand to determine the price in a free Most prices change if there is an alteration in the market level of supply and demand Public good Goods which are non excludable and non rivalrous National defence is a public good. It is difficult to prevent anybody benefiting from defence and it can be provided for all Regulation A rule or law to influence consumer or business behaviour A minimum age for smoking Scarcity Insufficient resources to meet all wants In some countries water is scarce as demand exceeds supply Subsidy A payment from the government to producers to encourage Bus companies receive subsidies to encourage production the provision of public transport Supply The amount of a good or service firms are willing to provide at a Firms will supply more oil at higher prices given price level Tradable permit The right to emit a certain level of pollution Firms are allowed to emit an amount of carbon per permit

Essential terms for Year 12

20 Key terms for macroeconomics

Term Definition Context Aggregate Demand The total spending on a country’s good services, in a given time This adds up all of the spending by consumers, period. firms, the government and foreigners on a country’s goods Aggregate supply The total number of goods and services that firms are willing and This adds together the potential levels of supply able to provide at a given price level of all firms in the country Balance of payments A record of the financial transactions occurring between one This would include money spend on imports or country and the rest of the world received for exports Budget deficit Where government spending exceeds tax revenue in a 12 month UK’s budget deficit may be £300 for 2020 period Budget surplus Where tax revenues exceed government spending in a 12 month This hasn’t happened in the UK for nearly 20 period years Consumer spending Money spent on goods and services by individuals and families Every time you go shopping it contributes towards consumer spending Economic growth The percentage rise in real GDP Economic growth is likely to be negative in 2020 due to a fall in GDP Export Money received from selling goods and services to foreigners The UK’s main export is financial services Fiscal Policy Use of government spending and taxation to manage the economy The UK government has spent money on the economy via the furlough scheme to help reduce the effects of the crisis Gross domestic product The value of output, income and expenditure in an economy GDP is predicted to fall in the UK due to the impact of the virus Import Spending on goods and services produced by foreign countries The UK imports a lot of manufactured goods from China Inequality The uneven distribution of income and wealth The top 1 of earners may receive 20% of incomes

Inflation A rise in the general price level In the UK prices are, on average, increasing by 2% Investment Spending by firms on capital goods This would include buying machinery or new premises Macroeconomics Looks at entire economies. The unemployment, inflation, and It considers the big picture and aggregates all monetary challenges of countries, and continents industries output together Monetary policy Altering interest rates to manage the economy Interest rates have been cut to 0.1% to try and encourage spending National debt The accumulation of unpaid annual government, budget deficits This is the total of all the debt owed by the government Protectionism Restrictions imposed on international trade to limit imports or An example is a tariff which is a tax imposed on a exports good or service from overseas Supply side policies Policies used to increase the productivity and efficiency of firms These include improving the education and training of workers Unemployment Being without work despite being willing and able to work Many people are likely to lose their jobs to the effects of the virus

Long Term Plan – Year 1 Economics

1 2 3 4 5 6 7 8 9 10 11 12 13

Introduction Scarcity, PPF's, Specialisati The theory The theory Price Price PED Income Cross Intro to Negative opportunit specialisati on and the of demand of supply equilibrium mechanism elasticity of elasticity of market and Start y cost and on and the functions demand demand failure positive Theme 1 the functions of money Key externalities economic of money assessmen Key Price problem. t 1 assessmen elasticity of t 2 supply

14 15 16 17 18 19 20 21 22 23 24 25 26

Informatio Informatio Indirect Subsidies Tradable Start Aggregat Aggregat Circular Key Employme Economi Inflation n gaps, n provision, taxes permits Theme 2 e e supply flow assessmen nt and c growth public state Maximum unemploy demand t 4 goods provision prices Key Macroecon ment Minimum assessmen omic Multiplie prices t 3 objectives r

27 28 29 30 31 32 33 34 35 36 37 38 39

Balance Monetar Fiscal Fiscal Key Supply Conflicts Review Intro to Key Start Costs Profits of y Policy policy policy assessmen side between Theme 2 Paper 3 assessmen theme 3 and t 5 Micro / t 6 payment policy objective Macro revenues s s Costs Exchange and rates revenues