Economics Lecture Notes

Economics - A Singapore PerspectiveEconomics Cafe provides economics lecture notes which are not confined to use by students taking economics tuition at the learning centre. They have been written by the Principal Economics Tutor, Mr. Edmund Quek, for everyone who can benefit from them. The explanations of economic theories and concepts in the lecture notes are kept concise by design so that they can be produced by students within the examination time constraint in the Singapore-Cambridge GCE ‘A’ Level Economics examination. Given the examination time constraint in the Singapore-Cambridge GCE ‘A’ Level Economics examination, the ability to write concisely is of great importance as failure to do so may cost you the distinction, even if you have a good mastery of the subject. Unfortunately, this skill is not much emphasised in many schools which explains why many of the students who sit for the Singapore-Cambridge GCE ‘A’ Level Economics examination each year fail to finish their papers. As some details of the explanations of economic theories and concepts in the lecture notes have been left out by design, you may encounter some difficulties when reading them. If you do not have a private tutor, you can email me your queries. However, due to my busy work schedule, it may take me some time to reply to your queries. Since the publication of these lecture notes, thousands of economics students and economics tutors have benefited from them. Mr. Edmund Quek was approached by MediaCorp for an interview on Economics Lecture Notes  in 2013. For the applications of the economic theories and concepts in the lecture notes, you can refer to JC Economics Model Essays (Economics Cafe) which is available in all Public Libraries and  Popular Bookstores.

 

CHAPTER 1 –  THE CENTRAL PROBLEM OF ECONOMICS

CHAPTER MAP

1          INTRODUCTION

2          FACTORS OF PRODUCTION

3          SCARCITY, CHOICE AND OPPORTUNITY COST

4          THE PRODUCTION POSSIBILITY CURVE
4.1       The Production Possibility Curve, Scarcity, Choice and Opportunity Cost
4.2       Movements along versus Shifts in the Production Possibility Curve
4.3       Shape of the Production Possibility Curve
4.4       Economic Efficiency

5          ECONOMIC SYSTEM
5.1       The Market System
5.2       The Command System
5.3       The Mixed System
5.4       Advantages and Disadvantages of Economic Systems

Click to Read

 

CHAPTER 2 – DEMAND AND SUPPLY

CHAPTER MAP

1          INTRODUCTION

2          DEMAND
2.1       Relationship between Price and Quantity Demanded
2.2       Movements along versus Shifts in the Demand Curve
2.3       Non-price Determinants of Demand

3          SUPPLY
3.1       Relationship between Price and Quantity Supplied
3.2       Movements along versus Shifts in the Supply Curve
3.3       Non-price Determinants of Supply

4          EQUILIBRIUM
4.1       Equilibrium Price and Equilibrium Quantity
4.2       Effects of a Change in Demand on Price and Quantity
4.3       Effects of a Change in Supply on Price and Quantity
4.4       Effects of Simultaneous Changes in Demand and Supply on Price and Quantity

5          SURPLUS
5.1       Consumer Surplus
5.2       Producer Surplus

Click to Read

 

CHAPTER 3 – ELASTICITY OF DEMAND AND SUPPLY

CHAPTER MAP

1          INTRODUCTION

2          PRICE ELASTICITY OF DEMAND
2.1       Measurement and Interpretation of Price Elasticity of Demand
2.2       Applications of Price Elasticity of Demand
2.3       Determinants of Price Elasticity of Demand

3          INCOME ELASTICITY OF DEMAND
3.1       Measurement and Interpretation of Income Elasticity of Demand
3.2       Applications of Income Elasticity of Demand
3.3       Determinants of Income Elasticity of Demand

4          CROSS ELASTICITY OF DEMAND
4.1       Measurement and Interpretation of Cross Elasticity of Demand
4.2       Applications of Cross Elasticity of Demand
4.3       Determinants of Cross Elasticity of Demand

5          PRICE ELASTICITY OF SUPPLY
5.1       Measurement and Interpretation of Price Elasticity of Supply
5.2       Determinants of Price Elasticity of Supply

6          LIMITATIONS OF THE CONCEPTS OF ELASTICITY OF DEMAND

7          EFFECTS OF ELASTICITY ON PRICE AND QUANTITY

Click to Read

 

CHAPTER 4 – GOVERNMENT INTERVENTION IN THE MARKET

CHAPTER MAP

1          INTRODUCTION

2          TAX
2.1       Effects of an Indirect Tax on Price and Quantity
2.2       Tax Incidence

3          SUBSIDY
3.1       Effects of a Subsidy on Price and Quantity
3.2       Subsidy Incidence

4          MAXIMUM PRICE (PRICE CEILING)
4.1       Effects of a Maximum Price on Price and Quantity
4.2       Effects of a Maximum Price on Consumers, Firms and the Government

5          MINIMUM PRICE (PRICE FLOOR)
5.1       Effects of a Minimum Price on Price and Quantity
5.2       Effects of a Minimum Price on Consumers, Firms and the Government

Click to Read

 

CHAPTER 5 – PRODUCTION AND COSTS

CHAPTER MAP

1          INTRODUCTION

2          THE SHORT-RUN THEORY OF PRODUCTION
2.1       The Law of Diminishing Marginal Returns
2.2       Total Product, Marginal Product and Average Product

3          THE LONG-RUN THEORY OF PRODUCTION
3.1       The Least-cost Combination of Factor Inputs
3.2       Returns to Scale

4          THE SHORT-RUN THEORY OF COST
4.1       Fixed Costs, Variable Costs, Explicit Costs and Implicit Costs
4.2       Total Cost, Marginal Cost, Average Cost, Average Variable Cost and Average Fixed Cost

5          THE LONG-RUN THEORY OF COST
5.1       Long-run Average Cost
5.2       Economies of Scale and Diseconomies of Scale
5.3       External Economies of Scale and External Diseconomies of Scale
5.4       Economies of Scope
5.5       Minimum Efficient Scale

Click to Read

 

CHAPTER 6 – MARKET STRUCTURE

CHAPTER MAP

1          INTRODUCTION

2          PERFECT COMPETITION
2.1       Characteristics of Perfect Competition
2.2       The Profit-maximising Condition
2.3       Equilibrium of a Perfectly Competitive Market
2.4       The Shut-down Condition
2.5       Supply Curve in Perfect Competition
2.6       Advantages and Disadvantages of Perfect Competition

3          MONOPOLY
3.1       Characteristics of Monopoly
3.2       Barriers to Entry
3.3       Equilibrium of a Monopolistic Market
3.4       Advantages and Disadvantages of Monopoly
3.5       Natural Monopoly

4          MONOPOLISTIC COMPETITION
4.1       Characteristics of Monopolistic Competition
4.2       Equilibrium of a Monopolistically Competitive Market
4.3       Advantages and Disadvantages of Monopolistic Competition

5          OLIGOPOLY
5.1       Characteristics of Oligopoly
5.2       Collusive versus Competitive (non-collusive) Behaviour
5.3       Non-price Competition
5.4       Advantages and Disadvantages of Oligopoly
5.5       Market Concentration Ratio

6          PRICE DISCRIMINATION
6.1       Types of Price Discrimination
6.2       Desirability of Price Discrimination

7          ALTERNATIVE OBJECTIVES OF FIRMS

8          GROWTH OF FIRMS
8.1       Types of Growth of Firms
8.2       Reasons for Growth of Firms
8.3       Survival of Small Firms

9          THE THEORY OF CONTESTABLE MARKETS

Click to Read

 

CHAPTER 7 – MARKET FAILURE

CHAPTER MAP

1          INTRODUCTION

2          EXTERNALITIES
2.1       Externalities as a Cause of Market Failure
2.2       Measures to Correct Market Failures due to Externalities

3          INFORMATION FAILURE
3.1       Imperfect Information as a Cause of Market Failure
3.2       Measures to Correct Market Failures due to Imperfect Information
3.3       Asymmetric Information as a Cause of Market Failure
3.4       Measures to Correct Market Failures due to Asymmetric Information

4          PUBLIC GOODS
4.1       Public Goods as a Cause of Market Failure
4.2       Measures to Correct Market Failures due to Public Goods

5          MARKET DOMINANCE
5.1       Market Dominance as a Cause of Market Failure
5.2       Measures to Correct Market Failures due to Market Dominance

6          IMMOBILITY OF FACTORS OF PRODUCTION
6.1       Immobility of Factors of Production as a Cause of Market Failure
6.2       Measures to Correct Market Failures due to Immobility of Factors of Production

7          INCOME INEQUITY
7.1       Income Inequity as a Cause of Market Failure
7.2       Causes of Income Inequity in Singapore
7.3       Measures to Address the Problem of Income Inequity

8          GOVERNMENT FAILURE

Click to Read

 

CHAPTER 8 – NATIONAL OUTPUT/NATIONAL INCOME ACCOUNTING

CHAPTER MAP

1          INTRODUCTION

2          MEASUREMENT OF NATIONAL OUTPUT, NATIONAL INCOME AND NATIONAL EXPENDITURE

3          THE BUSINESS CYCLE

4          NOMINAL NATIONAL OUTPUT AND REAL NATIONAL OUTPUT

5          NATIONAL INCOME AND THE STANDARD OF LIVING

6          ALTERNATIVE MEASURES OF THE STANDARD OF LIVING

Click to Read

 

CHAPTER 9 – NATIONAL OUTPUT/NATIONAL INCOME DETERMINATION

CHAPTER MAP

1          INTRODUCTION

2          THE CLASSICAL THEORY VERSUS THE KEYNESIAN THEORY

3          THE KEYNESIAN THEORY IN GREATER DETAIL
3.1       Aggregate Expenditure
3.1.1    Consumption Expenditure
3.1.2    Planned Investment Expenditure
3.1.3    Government Expenditure on Goods and Services
3.1.4    Net Exports
3.2       The Circular Flow of Income and Expenditure
3.3       Equilibrium National Income
3.4       The Multiplier Effect and the Multiplier

4          THE NEOCLASSICAL THEORY

Click to Read

 

CHAPTER 10 – INTEREST RATE AND EXCHANGE RATE

CHAPTER MAP

1          INTRODUCTION

2          INTEREST RATE
2.1       The Money Market
2.2       The Loanable Funds Market

3          EXCHANGE RATE
3.1       The Floating/Flexible Exchange Rate System
3.2       The Fixed Exchange Rate System
3.3       The Managed Float Exchange Rate System

Click to Read

 

CHAPTER 11 – MACROECONOMIC PERFORMANCE

CHAPTER MAP

1          INTRODUCTION

2          ECONOMIC GROWTH
2.1       Sources of Economic Growth
2.2       Inclusive Economic Growth
2.3       Sustainable Economic Growth
2.4       Benefits and Costs of Economic Growth

3          UNEMPLOYMENT
3.1       Measurement of Unemployment
3.2       Causes of Unemployment
3.3       Full Employment and Natural Unemployment
3.4       Costs and Benefits of Unemployment

4          INFLATION
4.1       Measurement of Inflation
4.2       Causes of Inflation
4.3       Costs and Benefits of Inflation
4.4       Benefits and Costs of Deflation

5          THE BALANCE OF PAYMENTS
5.1       Components of the Balance of Payments
5.2       Total Currency Flow
5.3       Net Errors and Omissions
5.4       Total Currency Flow and the Exchange Rate System
5.5       Adverse Effects of a Persistent Balance of Payments Deficit
5.6       Adverse Effects of a Persistent Balance of Payments Surplus
5.7       Measures to Correct a Persistent Balance of Payments Deficit

Click to Read

 

CHAPTER 12 – MACROECONOMIC POLICIES

CHAPTER MAP

1          INTRODUCTION

2          DEMAND-SIDE POLICIES: FISCAL POLICY
2.1       Objectives of Fiscal Policy
2.2       Limitations of Fiscal Policy
2.3       Supply-side Effect of Fiscal Policy
2.4       Fiscal Policy in Singapore

3          DEMAND-SIDE POLICIES: MONETARY POLICY
3.1       Objectives of Monetary Policy
3.2       Limitations of Monetary Policy
3.3       Supply-side Effect of Monetary Policy
3.4       Quantitative Easing
3.5       Monetary Policy in Singapore

4          EXCHANGE RATE POLICY
4.1       Objectives of Exchange Rate Policy
4.2       Limitations of Exchange Rate Policy
4.3       Exchange Rate Policy in Singapore

5          SUPPLY-SIDE POLICIES
5.1       Objectives of Supply-side Policies
5.2       Limitations of Supply-side Policies
5.3       Demand-side Effect of Supply-side Policies

6          SHORT-TERM SUPPLY-SIDE POLICIES
6.1       Objectives of Short-term Supply-side Policies
6.2       Limitations of Short-term Supply-side Policies

7          TRADE POLICY
7.1       Objectives of Trade Policy
7.2       Limitations of Trade Policy

8          CONFLICTS BETWEEN MACROECONOMIC GOALS

Click to Read

 

CHAPTER 13 – INTERNATIONAL ECONOMICS

CHAPTER MAP

1          INTRODUCTION

2          BASIS OF SPECIALISATION AND INTERNATIONAL TRADE
2.1       The Law of Absolute Advantage
2.2       The Law of Comparative Advantage
2.3       Limitations of the Law of Comparative Advantage
2.4       Sources of Comparative Advantage
2.5       Demand-side Reason for International Trade
2.6       Advantages and Disadvantages of International Trade
2.7       Pattern of Trade Between Singapore and the Rest of the World

3          PROTECTIONISM
3.1       Protectionist Measures
3.2       Arguments For and Against Protectionism

4          THE TERMS OF TRADE
4.1       Factors Affecting the Terms of Trade
4.2       Effect of a Change in the Terms of Trade on the Balance of Trade
4.3       The Marshall-Lerner Condition

5          FREE TRADE AGREEMENT

6          GROWTH OF CHINA

7          GLOBALISATION
7.1       Trend Towards Globalisation
7.2       Costs and Benefits of Globalisation to Developing Economies and Developed Economies
7.3       Costs and Benefits of Globalisation to Singapore

Click to Read

Note: The content in the economics lecture notes will be discussed in greater detail in economics tuition.

 

Answers To Singapore-Cambridge GCE ‘A’ Level Economics Examination Questions

Click to Read

 

H2 Syllabus and Assessment Format

Click to Read

H1 Syllabus and Assessment Format

Click to Read

 

Useful Links For Economics

Singapore Examinations and Assessment Board
Website: www.seab.gov.sg

Ministry of Education
Website: www.moe.gov.sg

Department of Statistics Singapore
Website: www.singstat.gov.sg

Monetary Authority of Singapore
Website: www.mas.gov.sg

Ministry of Trade and Industry
Website: www.mti.gov.sg

Economics Development Board
Website: www.edb.gov.sg

International Enterprise (IE) Singapore
Website: www.iesingapore.gov.sg

Economic Society of Singapore
Website: www.ess.org.sg

The Economist
Website: www.economist.com

Reuters
Website: www.reuters.com

Bloomberg
Website: www.bloomberg.com

CNBC
Website: www.cnbc.com

CNN
Website: www.cnn.com

BBC
Website: www.bbc.com

The Business Times
Website: www.businesstimes.com.sg

Channel NewsAsia
Website: www.channelnewsasia.com

The Straits Times
Website: www.straitstimes.com

The Guardian
Website: www.theguardian.com

 

 

economics tuition, back to homepage

Economics Tuition Singapore @ Economics Cafe
Principal Economics Tutor: Mr. Edmund Quek