EconomicsQ&A by dot point

The structure of SQA Advanced Higher Economics: its three areas of study, what SCQF level 7 signifies, the two assessment components and the A to D grading of the award.

The 40-mark project: an independent research report on a chosen current economic issue, what it requires (a clear aim, primary and secondary evidence, applied theory, analysis and a supported conclusion), and how it is marked.

The question paper: its 80 marks and 2 hours 30 minutes, the balance of data-response and extended-response questions, the command words and the skills tested, and exam technique.

Costs, revenue and profit: short-run and long-run cost curves, total, average and marginal revenue, the profit-maximising MC = MR rule, and the distinction between normal and abnormal profit.

Labour markets: the demand for labour as a derived demand and marginal revenue product, the supply of labour, wage determination in competitive and imperfect labour markets, trade unions and monopsony, and the causes of wage and income inequality.

Market failure and intervention: externalities, public goods, merit and demerit goods, information failure and monopoly power; the policy responses of taxes, subsidies, regulation, tradable permits and provision; competition policy; and the risk of government failure.

Monopolistic competition: many firms with differentiated products, short-run abnormal profit competed away to long-run normal profit and excess capacity; and contestable markets where the threat of entry constrains behaviour.

Monopoly: barriers to entry, the profit-maximising equilibrium with abnormal profit, the efficiency loss compared with perfect competition, and the conditions for and types of price discrimination.

Oligopoly: the features of a few interdependent firms, the kinked demand curve and price stability, collusion and cartels, game theory and the prisoner's dilemma, and non-price competition.

Perfect competition: its assumptions, short-run and long-run equilibrium, the role of entry and exit, and why it achieves both allocative and productive efficiency.

The aggregate demand and supply model: the components of aggregate demand, short-run and long-run aggregate supply, macroeconomic equilibrium, and the multiplier and accelerator effects of a change in spending.

Economic growth and the business cycle: measuring real GDP and output gaps, the phases and causes of the cycle, the distinction between actual and potential growth, and the benefits and costs of growth including sustainability.

Exchange rates and the balance of payments: the structure of the balance of payments, floating and fixed exchange rate systems, how a floating rate is determined and what causes appreciation and depreciation, and the effects of a changing exchange rate on the current account.

Fiscal and monetary policy: government spending, taxation and the budget; the role of the central bank, interest rates and quantitative easing; how each affects aggregate demand; and an evaluation of their effectiveness.

Globalisation and economic development: the causes and effects of globalisation and the role of multinationals, the measurement of development beyond GDP, the barriers to development, development strategies, and the roles of the IMF, World Bank and aid.

Inflation and unemployment: their measurement, types and causes, their economic costs, and the Phillips curve relationship between them in the short run and long run.

International trade: absolute and comparative advantage, the gains from specialisation and trade, the terms of trade, the arguments for and against protectionism and its methods, and the role of trade blocs and the WTO.

Supply-side policy and the Scottish economy: market-based and interventionist supply-side measures and their effects on long-run aggregate supply, and the division of economic powers between the Scottish and UK governments under devolution and the fiscal framework.

Analysing and evaluating research: organising and presenting data, handling economic data (percentage change and index numbers), assessing the reliability and validity of sources, referencing, drawing supported conclusions, and evaluating the research process.

Choosing and planning research: selecting a current economic issue and setting a focused aim or hypothesis, distinguishing primary and secondary research and qualitative and quantitative data, sampling, and planning a programme of research with timescales.