The idea of writing notes for Cambridge A-level Micro Economics Book came to me in 2003, when, having already taught for a year, I realized that no single economics book available in the local and international markets covered all the topics with the depth and perspective required by the CAIE syllabus.

Both students and teachers had to consult 3 to 4 different books to find all the material that they needed—private candidates and new teachers had it even worse. Furthermore, it was really difficult for students to keep having to refer through different books when the exams were close and they were starved for time.

I took on the challenge and decided to write a comprehensive text that explicitly followed the syllabus and exam pattern of the CAIE. A year and a half later, in the middle of 2004, I had finally written and published four entire volumes of A-level economics notes. Part of them had been hand-written, and part of them had been typed. Soon, word of their usefulness spread, and they were bought all over Pakistan.

The notes had served their purpose well till the end of 2014.

Till that point, there had only been minor changes in the syllabus. But now, there was a dire need to update them, for the new syllabus introduced some significant changes in course content. In this new and improved edition, old topics have been revised and new topics have been added. At the end of each topic, a relevant list of essay questions has been added as well, and these contain questions spanning from 1990 to 2019.

These questions provide a clear guideline regarding how the examiners assess students’ knowledge on the topics for Paper 2 and Paper 4, allowing the student to practice effectively. While writing these notes I kept in mind the way in which the examiner tests MCQs as well.

Micro Economics Book

The notes have been divided into four volumes to make it easier for those who are following the AS and A2 track separately and for those who are taking the composite exam; the syllabus division in the following pages has been provided for this express purpose.

I hope my efforts will help to contribute both to the learning of the student, as well as to the inquisitiveness of any teachers of A-level economics, effectively. Your suggestions will help me improve the quality of the content for later editions and will be highly appreciated.

Imran Latif

157 Micro Economics Book 1 AS Level Notes

TABLE OF CONTENTS

UNIT 1 BASIC ECONOMIC IDEAS AND RESOURCE ALLOCATION

BASIC ECONOMIC PROBLEM

PRODUCTION POSSIBILITY CURVE

ECONOMIC STRUCTURE

POSITIVE AND NORMATIVE STATEMENTS

CLASSIFICATION OF GOODS AND SERVICES:

BASIC ECONOMIC QUESTIONS

MEANING OF THE TERM ‘CETERIS PARIBUS’

DECISIONS AT THE MARGIN

SHORT RUN, LONG RUN AND VERY LONG RUN

ECONOMIC SYSTEMS

DIFFICULTIES FACED BY TRANSITION ECONOMIES:

TOPICAL PAST PAPER ESSAY QUESTIONS

UNIT 2 DEMAND, SUPPLY & EQUILIBRIUM

DEMAND

SUPPLY

EQUILIBRIUM

INTERDEPENDENT MARKETS & PRICES

ECONOMIC AGENTS IN A MARKET ECONOMY

THE FUNCTION OF PRICES IN THE MARKET

TOPICAL PAST PAPER ESSAY QUESTIONS

UNIT 3 ELASTICITY

INTERPRETING THE ELASTICITY FIGURES:

ELASTICITY OF DEMAND

PRICE ELASTICITY OF SUPPLY (PES)

DETERMINANTS OF PES

INCOME ELASTICITY OF DEMAND

CROSS ELASTICITY OF DEMAND (XED)

PRACTICAL APPLICATIONS OF ELASTICITY

LIMITATIONS OF THE CONCEPT OF ELASTICITY

PAST PAPERS QUESTIONS

UNIT 4 GOVERNMENT MICROECONOMIC INTERVENTION

CONSUMER SURPLUS

PRODUCER SURPLUS:

TOTAL SURPLUS:

EFFICIENCY AND MARKET EQUILIBRIUM

FINANCIAL INTERVENTION:

PRICE CONTROLS:

PRIVATIZATION

NATIONALIZATION AND DIRECT PROVISION OF GOODS AND SERVICES

PAST PAPERS QUESTIONS