A Short Primer on Economics6 min read

Thought I would give a short primer on what (I think) economics is about. So first a general overview, and then a more specific introduction to A Level H2 Economics.

Broadly speaking, Economics can be split into two fields — Microeconomics and Macroeconomics.

Microeconomics is the study of interactions between different economic agents, usually in the setting of a market. “Economic agents” is just a fancy term for households, firms, central banks, and governments. If that’s still too complicated, it just means PEOPLE.

Many of the conclusions in Microeconomics require strong assumptions in the way people behave and how the world is like. Most of these assumptions are not very realistic (many are there so that the models can produce certain conclusions) and a lot of research goes into how to relax these assumptions.

Macroeconomics is the study of the economy as a whole and focuses on the relationship between aggregates. For example, the relationship between unemployment (proportion of labour force looking for work) and inflation (change in the economy’s price level) is widely studied in the literature. More modern approaches to macroeconomic modelling tend to draw heavily on microeconomic theory and models are constructed from the bottom-up.

Research work in both branches of economics tend to be very mathematical and often also involve heavy use of statistics (known as econometrics). But there is also a strong emphasis on this thing called “economic intuition”, which usually refers to use of diagrams, graphs, and simple explanations to demystify complex economic concepts and mathematical results.

A Level H2 Economics

The focus of A Level H2 Economics is really “economic intuition”. There is very little attempt at proving any theorem or result rigorously, so most of the time you will just have to take the results as they are. This means only three things are important at the A Levels:

  1. Definitions
  2. Results/Conclusions
  3. Applications

and I will discuss each of them briefly below:

Definitions

Many words you encounter in economics will have ‘special meanings’ that differ from their everyday usage. Often these meanings will be quite specific. An example that you will come across (really) soon is the word “resources”, which is a broad term that can be split into four defined classes — land, labour, capital, entrepreneurship (— though some might argue there’s a fifth — information.) It’s quite critical that you know the definitions well, because if not much of the course would not make much sense to you.

Conclusions/Results/Theories

These are the results that people in economic faculties generally spend years of their lives deriving or proving. But you are not going to be learning what’s at the frontier of research. The focus is going to be on pretty old stuff, often from the 1950s and earlier. There’ll be almost no need for Math because most of the theories are covered using diagrams. The point here is to give you an intuitive understanding of what’s going on so that you can do the next thing which is…

Applications

This is really the core of the course. How to use these conclusions and theories from economics to understand and evaluate what happens in the real world. Because no math is involved, you can actually get away with quite a bit of ‘smoking’ here. As long as your argument sounds plausible and more or less reasonable, you will generally receive credit for your answer.

How to do well for A Level H2 Economics?

1. Be consistent.

Like what I have mentioned in here and here, consistency is absolutely critical for you to score at the A Levels. There’s a huge amount of content and if you don’t spend time to familiarise yourself with it gradually, you will not be able to remember anything when the exam comes.

For those of you thinking that your short term memory is fantastic and it’s not going to be an issue to cram the night before the exam, just know that it’s the route that have many tried and failed. H2 Economics is really a master illusionist — it will make you think you understand everything but when the time comes to apply, you will have nothing.

Because we know it’s hard and because we want you to succeed, we are going to do what we can to help. If you haven’t heard already, starting tomorrow we are launching 5 Minutes Only Lah! — a daily series of posts that will help you get to economics mastery, if you stick with it. Go here for more details!

2. Read.

I used to do a free newsletter service, but that has been discontinued because I realised it’s not as effective for students as when they try reading articles themselves and go through the struggle of understanding. The point I am trying to make here is that the learning comes from the struggle.

Read more and think about how you can apply what you have learnt. There is no substitute for it. The person who does the work learns the most. Yes it’s so important I’m going to repeat it.

The person who does the work learns the most.

If you are going to rely on your teachers to spoon-feed you, then you will learn nothing.

The A Levels are only going to get harder; questions are only going to demand you know more and more of current affairs; and the world is just getting increasingly connected. So start reading now. Subscribe to The Economist. Enjoy the struggle.

3. Do past year A Level and Prelim papers.

Impossible. To. Overstate. How. Important. This. Is.

This is absolutely critical. I have used this method in the past with my students and they’ve gone from Ds to As in less than 6 months. It’s very possible, you just have to stick with it. One of them even got 90% for her essays in RJC Prelims via this method (getting a 70% already puts someone in the top 2%).

Read this post to find out more about how to do well in the A Levels.

Okay, we hope after reading this, you have a clearer idea of what economics is about and how you can do well for it. I’ll just end with this:

The content is not as important as you think; it’s much more important to pick up good learning habits and thinking skills, because those are what you will need for life.

Till next time, dream economics.

Oh by the way, 5 Minutes Only Lah! is starting from tomorrow onwards if you haven’t heard! If you haven’t bookmarked the site or subscribed to the page, you can do so right here!

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