9772 Economics Pre-U Final Syllabus

Cambridge Pre-U Syllabus
Cambridge International Level 3

Pre-U Certificate in
ECONOMICS
For examination in 2010, 2011 and 2012

Economics (9772)
Cambridge International Level 3
Pre-U Certificate in Economics (Principal)
For examination in 2010, 2011 and 2012
QAN 500/3670/1
www.cie.org.uk/cambridgepreu 1
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Copyright © University of Cambridge Local Examinations Syndicate 2008
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Cambridge International Level 3 Pre-U Certificate
Economics
9772
Contents
Page
Introduction 4
Aims 5
Assessment Objectives 5
Scheme of Assessment 6
Description of Papers 7
Specification Grid 8
Curriculum Content 9
Microeconomics 9
The National Economy 14
International Economics 18
Appendix 1: Grade Descriptors 21
Appendix 2: Additional Information 22
Introduction
The Cambridge Pre-U Diploma aims to equip candidates with the skills required to make a success of
their subsequent studies at university, involving not only a solid grounding in each specialist subject
at an appropriate level, but also the ability to undertake independent and self-directed learning and
to think laterally, critically and creatively. The Cambridge Pre-U curriculum is underpinned by a core
set of educational principles:
• A programme of study which supports the development of well-informed, open and

independent-minded individuals capable of applying their skills to meet the demands of the
world as they will find it and over which they may have influence.
• A curriculum which retains the integrity of subject specialisms and which can be efficiently,
effectively and reliably assessed, graded and reported to meet the needs of universities.
• A curriculum which is designed to recognise a wide range of individual talents, interests and
abilities and which provides the depth and rigour required for a university degree course.
• A curriculum which encourages the acquisition of specific skills and abilities, in particular
the skills of problem solving, creativity, critical thinking, team working and effective
communication.
• The encouragement of ‘deep understanding’ in learning – where that deep understanding is
likely to involve higher order cognitive activities.
• The development of a perspective which equips young people to understand a range of
different cultures and ideas and to respond successfully to the opportunity for international
mobility.
All Cambridge Pre-U syllabuses are linear. A candidate taking a Principal Subject must take all the
components together at the end of the course in one examination session.
Prior knowledge
The syllabus builds on the knowledge, understanding and skills typically gained by candidates taking
Level 2 qualifications. No prior study of Economics is assumed. It is recommended that candidates
have attained communication and literacy skills at a level equivalent to IGCSE/GCSE Grade C in
English.
Progression
The course will provide key knowledge and develop transferable skills that will prepare candidates to
study Economics or other subjects at university.
Aims
The purpose of the syllabus is to enable Centres to devise courses that will provide candidates with
the opportunity to:
• analyse and evaluate the economic concepts and theories that underpin the workings of a
modern-day economy;
• develop quantitative skills through the appreciation and use of various relevant statistics;
• understand and apply the concepts of causality and interdependence, on both a macro and a
micro scale;
• critically and independently assess the effectiveness of policy decisions, both internal
and external, that have influenced the UK economy over the past 10 years as far as areas
contained within the syllabus are concerned (a longer-term perspective, where relevant, will
clearly aid understanding);
• communicate their reasoning and conclusions fully and effectively.
Assessment Objectives
Candidates should:
AO1 demonstrate knowledge and understanding;
AO2 apply theoretical knowledge and understanding to real-life situations presented to them;
analyse economic problems and issues and have a good knowledge of statistical methods
AO3
used within the discipline;
evaluate and reach well-informed and considered conclusions. Candidates must be able
AO4 to make a critical assessment of the relevance and appropriateness of assumptions made
within models.
Scheme of Assessment
For the Cambridge Pre-U qualification in Economics, candidates take all three components in the
same session.
Weighting
Component Component Title Duration Type of Assessment
(%)
Multiple Choice,
2 hours
Paper 1 Short Answers and 40 Written paper, externally set and marked
15 minutes
Data Response
2 hours
Paper 2 Essay Paper 40 Written paper, externally set and marked
15 minutes
Essay, written in examination conditions
Paper 3 Investigation 1¼ hours 20
and externally marked
Description of Papers
Paper 1: Multiple Choice, Short Answers and Data Response
Paper 1 will consist of:
• Section A: 30 compulsory multiple-choice questions on the whole syllabus content

• Section B: 4 compulsory short-answer questions
• Section C: 1 compulsory data-response question.
If the short-answer questions are predominantly micro then the data-response question will be
predominantly macro, and vice versa.
Paper 2: Essay Paper
Paper 2 will contain three essays – one to be chosen from three predominantly micro questions, one
from three predominantly macro questions and one free choice from the remaining titles.
Paper 3: Investigation
Paper 3 will involve a single piece of extended writing resulting from independent thinking and
learning within a supported environment.
The paper will contain one essay title on each of four current issues in economics, namely:
• Transport and the Environment

• China and the Global Economy
• Expansion of the EU
• The Pensions Crisis
This list will change over time to reflect current economic issues.
Teachers are expected to make the choice of topic, and candidates will be required to write one essay
in the examination.
The intention is to encourage candidates to apply their knowledge and understanding of economic
concepts, combined with detailed individual research into the topic chosen from this list. However,
before undertaking their own research into a topic, candidates will need to be given guidance on the
economic background to the topic, and help with identifying the main issues, problems and possible
research strands. Candidates will then be expected to do much of their own reading and research, but
that work should be supported by the opportunity to discuss progress, report findings, ask questions
and develop understanding, and contribute to seminars and discussions. Teachers will also want
to take the opportunity to monitor and evaluate progress. All of this is to take place in a teaching
environment.
Paper 3 is thus intended to give teachers and candidates the chance to structure the course in
collaboration, and is based on a model of teaching and learning that promotes open-ended but
focused exploration.
Specification Grid
The relationship between the assessment objectives and the units of assessment is shown in the
specification grid below.
Paper Paper 1 Paper 2 Paper 3 Total
Assessment Objectives Percentage of Principal Qualification
1 Knowledge 12±4 8±4 3±2 23
2 Application 12±4 8±4 3±2 23
3 Analysis 10±4 12±4 5±3 27
4 Evaluation 6±3 12±4 9±4 27
Weighting of Paper 40% 40% 20% 100%
Curriculum Content
1 Microeconomics
Candidates should develop a good understanding of the issues involved within the following areas:
(a) The Basic Economic Problem of Unlimited Wants and Limited Means
(b) The Market Mechanism and Demand and Supply Analysis
(c) Costs of Production, Profit and the Theory of the Firm
(d) Causes of Market Failure
(e) Government Intervention in the Market
(f) The Labour Market
(a) The Basic Economic Problem of Unlimited Wants and Limited Means
Candidates should appreciate that much of the rationale behind the study of economics is based on
this fundamental issue. They should have a thorough understanding of the following concepts and be
able to use them to explain the issues involved.
• factors of production
• production possibility curves
• opportunity cost
• specialisation and the division of labour
• the three fundamental questions of ‘What, How and For Whom?’
• how different types of economies answer these questions
• different economic agents
• assumed maximising goals of profit, consumer satisfaction and social welfare and potential
conflicts
• questioning of the concept of rational economic behaviour
(b) The Market Mechanism and Demand and Supply Analysis
Candidates should understand how prices work within a market mechanism and have knowledge of
the following functions of the mechanism:
• signalling
• incentive
• rationing
• allocating
Candidates are expected to know the basic shape of demand and supply curves – including an
understanding of why the demand curve usually slopes downwards. Knowledge of both marginal
utility analysis and indifference curve analysis, covering both income and substitution effects, is
required. Candidates are also expected to know how the two curves interact and the causes and
effects of a change in either one. Candidates should also appreciate that a demand curve represents
average revenue and hence understand that both marginal revenue and total revenue can be derived
from a demand curve.
Candidates should understand the difference between a shift in a curve – i.e. a change in demand or
supply – and a movement along an existing curve – i.e. a change in quantity demanded or supplied.
Candidates should understand definitions, determinants, and implications – such as the link between
average revenue, marginal revenue and total revenue – and be able to use the relevant formula in
calculations of the following elasticities:
• own-price elasticity of demand

• cross-price elasticity of demand
• income elasticity of demand
• elasticity of supply
Candidates should understand the concept of equilibrium within a market.
Candidates should understand that certain markets are interrelated and be able to analyse the effect
that a change in one market has on another market. They should be able to analyse the effect of
government-imposed taxes and subsidies as well as maximum and minimum prices.
(c) Costs of Production, Profit and the Theory of the Firm
Candidates should understand the reasoning behind, the relationships between and the relevant
curves for the following costs:
• fixed
• variable
• total
• average
• marginal
A sound understanding of the difference between the short run and the long run is required to explain
reasons behind, and differences between, the ‘Law of Diminishing Returns to a Fixed Factor’ and
‘Economies and Diseconomies of Scale’.
Candidates should understand how firms maximise profits. Knowledge of the concepts of normal
profit, supernormal profit and loss situations is required in the context of the theories of the firm
considered below.
Candidates should understand the various market structures that can exist and should have a sound
knowledge of all the following models:
• perfect competition
• monopoly
• monopolistic competition
• oligopoly
Candidates should understand definitions of all these models and the assumptions upon which
they are based. Knowledge of the associated cost and revenue diagrams for both the short run and
the long run is required – including that of short-run shut-down points. Limitations arising from
assumptions made should be considered.
The concepts of allocative, productive and dynamic efficiency should be used to consider the relative
merits of perfect competition and monopoly. Within this comparison, a study should be made of the
concept of ‘Contestable Markets’.
The importance of the separation between ownership and control of a firm must be known and the
reasons behind this split and its implications fully understood. A detailed knowledge is required of
all the potential aims that a firm may have, if the assumption of profit maximisation is relaxed. These
include growth maximisation, revenue maximisation, volume of sales maximisation, ‘not for profit’
businesses and the concept of satisficing, subject to a minimum profit constraint.
Within the study of oligopoly, the concept of ‘interdependence’ should be stressed, both in terms
of collusive and competitive oligopolies. An understanding of various theories, such as the kinked
demand curve, to suggest why outcomes in such markets occur as they do, is required. Knowledge
of various pricing policies and of non-price competition should also be considered. The concept of
game theory, covering at least the prisoner’s dilemma, should be studied.
Candidates should have a good understanding of price discrimination, as opposed to price

differentiation, and know the conditions necessary for it to be successfully applied.
(d) Causes of Market Failure
Candidates should understand that the market mechanism may not correctly allocate resources for
reasons of both inefficiency and inequity. Where applicable, candidates should understand that the
degree of ‘failure’ perceived may depend upon a value judgement. The areas to be studied are as
detailed below:
• Positive and negative externalities in consumption and production: The use of the
appropriate marginal diagrams is required, including an understanding of the concept of
‘deadweight welfare loss’. Particular attention should be paid to externalities affecting the
environment.
• Public goods: Candidates should understand that such goods are ‘non-rival’ and ‘non-
excludable’ and know why the problems of ‘non-revealed preference’ and the ‘free-rider’
arise. Knowledge of ‘quasi-public goods’ is also required.
• Merit and demerit goods: Candidates must appreciate that both the existence of
externalities and the lack of perfect information can be relevant for such goods and that
these are private goods which will be respectively under- and over-consumed/supplied in a
free market.
• Monopoly: Knowledge of how monopolies may restrict output and choice and charge
higher prices than might be the case with competitive markets should be understood.
The concept of welfare loss, using terms such as consumer and producer surplus and
appropriate diagrams, is required.
• Inequitable distribution of income: Candidates should realise that different societies will
have varying views on what ought to be available to particular citizens, e.g. basic housing,
healthcare, and appreciate the link between effective demand and the distribution of income.
(e) Government Intervention in the Market
Rationale for Government Intervention

Candidates should understand the reasons for government intervention in areas such as health,
education, transport, energy, agriculture and the environment. Candidates should understand the
various methods open to a government to use, including indirect taxation, subsidies, price controls,
buffer stocks, tradable permits, extending property rights, state provision and regulation, in order to
correct for market failure. They should also appreciate that the government needs to take a long-term
view and the concept of sustainability should be explored. Candidates should have knowledge of UK
competition policy and how EU legislation in this area affects the UK economy.
Public Ownership vs Privatisation and Regulation vs De-regulation of Markets
Candidates should:
• understand the arguments for and against such policies

• be able to evaluate their impact on economic performance
While knowledge of government policies to alleviate poverty and to influence the distribution of
income and wealth is required, this is covered under fiscal policy.
Cost-Benefit Analysis
Candidates should:
• understand the principles of cost-benefit analysis

• be able to analyse and evaluate the advantages and disadvantages of using cost-benefit
analysis
• have knowledge of techniques such as discounting and shadow pricing
Government Failure
Government failure can include inadequate information, conflicting objectives, excessive

administrative costs and the ‘law of unintended consequences’. Candidates should appreciate that
government intervention may:
• create rather than remove market distortions

• not necessarily result in an improvement in economic welfare
Candidates should also be able to analyse and evaluate sources of government failure.
(f) The Labour Market
Candidates should appreciate that labour is just one of the inputs available to firms and should
know the various factors determining both the supply of, and demand for, labour including detailed
knowledge of the concept of marginal revenue product. Clear understanding that labour is not a
homogeneous factor of production is essential.
Candidates should be able to explain how wages are determined in both competitive and
monopsonistic labour markets. Causes of discrimination within the labour market should be
considered, as should relevant government legislation in both this area and that of minimum wages.
The role played by trade unions in labour markets should be understood.
2 The National Economy
Candidates should develop a good knowledge and understanding of recent trends and developments
in the UK economy over the past ten years. (Knowledge over a longer period will also help to put
more recent events into context.) Candidates will be expected to use this knowledge in answering
essay questions.
Candidates should develop a good understanding of:
(a) Standards of Living

(b) Economic Growth and Economic Cycle
(c) Employment and Unemployment
(d) Inflation and Deflation
(e) Distribution of Income
(f) Current Account of Balance of Payments
(g) Productivity and International Competitiveness
For each issue candidates should study:
• Meaning and Measurement

• Causes and Consequences
• Evidence and Policy Responses
Candidates are also required to have knowledge of relevant:
(h) Macroeconomic Theory

(i) Government Policy
Candidates should also be able to compare the performance of the UK economy with other national
economies in these areas, but specific knowledge of any other economy is not expected.
(a) Standards of Living
Candidates should be able to use GDP and similar data to compare the living standards of the
residents of different countries. They should be able to evaluate the use of such data and have some
knowledge of alternative measures. Comparisons over time and associated problems should also be
understood.
Note: Detailed knowledge of national income accounting is not required.
(b) Economic Growth and Economic Cycle
Candidates should be able to define economic growth, both as an increase in the productive
capacity of the economy and also as an increase in real national income. A distinction should be
made between short- and long-run growth. A production possibility diagram should also be used to
illustrate economic growth.
Candidates should understand the factors determining the rate of economic growth and that supply-
side factors, such as investment, education, training and technological change, are likely to determine
the underlying trend rate of economic growth.
Candidates should be able to discuss whether economic growth is sustainable or desirable or both,
and be able to evaluate the impact of growth on individuals and the environment.
Candidates should understand the economic or trade cycle and some of the causes of the cycle
including supply-side shocks.
(c) Employment and Unemployment
Knowledge is required in the following areas:
• Definitions and measures of unemployment

• Types and causes of unemployment
• Trends and patterns in employment and unemployment
• Consequences of unemployment
(d) Inflation and Deflation
Candidates should understand how index numbers are calculated and used to measure inflation.
They should be aware that there are different measures of inflation and should have specific
knowledge of the Consumer Price Index (CPI). Knowledge of the definitions of inflation and deflation
is required. Causes and consequences of both inflation and deflation should be understood.
(e) Distribution of Income
Candidates should have knowledge of recent trends for the UK in this area. They should also be
aware of distinctions between relative and absolute poverty and know how Lorenz curves and Gini
coefficients can be used to demonstrate the distribution of income and wealth.
(f) Current Account of Balance of Payments
Candidates should have a basic understanding of the current account (trade in goods, trade in
services, investment income and transfers) and they should understand the meaning of a deficit and a
surplus on current account.
Note: a detailed knowledge of the structure of the balance of payments account is not required.
(g) Productivity and International Competitiveness
Candidates should know the meaning of productivity (both labour productivity and total factor
productivity) and how these can be measured. The implications of relative productivity and unit
labour costs for international competitiveness should also be understood.
(h) Macroeconomic Theory
Circular Flow of Income
Candidates should understand the basic rationale behind the model using households, firms,
the government sector and the international economy. They should know the injections into and
withdrawals from the circular flow.
Aggregate Demand (AD)
Candidates should be able to explain and analyse the determinants of consumption, investment,
government expenditure and net exports. They should also, as a corollary, specifically understand
factors affecting the level of savings in an economy.
Knowledge of the multiplier process is required, so that candidates understand why a final change in
output can be greater than an initial change in one of the components of AD. They should be able to
1
calculate a simple multiplier k = ______
1–mpc
The shape of the AD curve and the rationale behind it should be understood.
Aggregate Supply (AS)
The shape of the short-run AS curve and the rationale behind it should be understood.
Knowledge and implications of a vertical long-run AS curve is required.
Candidates should be able to use the interaction of AD and AS both in the determination of levels of
output, prices and employment and also in explaining macroeconomic problems such as the causes
of inflation and demand-deficient unemployment.
(i) Government Policy
Candidates should study:
• Objectives of macroeconomic policies

• Types of policies
• Conflicts between objectives
Objectives of Macroeconomic Policies
These include stable and sustainable growth, low and stable inflation, low levels of unemployment,
an acceptable balance of payments position and an acceptable distribution of income and wealth.
Types of Policies
Candidates should know the aims and instruments of fiscal policy, monetary policy and supply-side
policies and be able to evaluate the effectiveness of each in achieving the macroeconomic objectives.
Candidates should have a broad knowledge and understanding of policies used in recent years and
any changes in emphasis between different policies.
Candidates should understand that the ‘rules vs discretion’ debate is central to an understanding of
contemporary policy-making, as is the concept of ‘policy sovereignty’.
Fiscal policy
• Candidates should know the major taxes used (or considered for use) in the UK and be able
to assess the relative merits of these.
• They should know and understand the ‘canons’ or principles of taxation.
• They should be able to understand and evaluate the significance of changes in the level and
distribution of public expenditure.
• They should understand the importance of the balance between government revenue
and expenditure and should appreciate that fiscal policy has microeconomic as well as
macroeconomic effects.
Monetary policy
• Interest rate determination in theory and practice: Candidates should understand the
role of the Monetary Policy Committee of the Bank of England in setting the rate of interest.
They should understand the relationship between changes in interest rates and the demand
for credit created by banks.
Note: a detailed knowledge of UK financial markets is not required.
• Exchange rate policy: Candidates should understand the relationship between interest
rates and the exchange rate and appreciate the difficulties involved in using the exchange
rate as an instrument of policy.
• Money supply: Candidates should have a basic understanding of money and liquidity, the
money multiplier, the monetary transmission mechanism and the Quantity Theory of Money.
They should understand the difference between broad and narrow money.
Supply-side policies
• Candidates should understand the various forms that such policies can take and that they
can be aimed at either the macro or the micro level.
• The links between supply-side policies, economic growth and, in particular, the trend rate of
economic growth should be emphasised.
Conflicts Between Objectives
Candidates should be able to apply their knowledge of economic theory to explain potential conflicts
between policy objectives, including the historical ‘Phillips Curve relationships’, and explanation of
more recent experiences.
3 International Economics
Candidates should develop a good understanding of the issues involved within the following areas:
(a) The Theory of Free Trade

(b) The Pattern of Trade
(c) Protectionism
(d) The Current Account and Exchange Rates
(e) Development Economics and Globalisation
(f) The European Union
(a) The Theory of Free Trade
Candidates should understand the rationale behind free trade and use the models of absolute
advantage and comparative advantage to explain the theoretical gains from trade.
Candidates should appreciate how the assumptions behind models such as comparative advantage
may limit their realism.
(b) The Pattern of Trade
Candidates should have an overview of the typical pattern of trade between the UK and other
countries or groups of countries such as Europe, USA and the rest of the world.
Candidates should appreciate the influences on the pattern of trade: the free trade movement,
historical and political factors, and trading blocs.
(c) Protectionism
Candidates should understand the types of protection that may arise and appreciate the impact of
protectionism on consumers and producers inside and outside protective agreements.
Candidates should understand the arguments in favour of and against protectionism.
(d) The Current Account and Exchange Rates
Candidates should understand the terms imports and exports and know what is meant by surplus,
balance and deficit on the current account. They should appreciate that the current account measures
net exports and is a component of aggregate demand.
Candidates should understand that floating exchange rates are determined by activity in the FOREX
market through trade, speculation and hot money flows.
Candidates should understand why and how a government may intervene in the FOREX market to
influence the exchange rate of their currency. An appreciation of the relative merits of fixed and
floating exchange rate regimes is required.
Candidates should understand the terms appreciation, depreciation, devaluation and revaluation.
Candidates should appreciate the factors that may lead to a sustained surplus or deficit on the current
account and the issues raised by a sustained imbalance for both the domestic and other economies.
Candidates should understand what policies may be used to correct a current account surplus or
deficit and the difference between expenditure-increasing/reducing and expenditure-switching
policies.
Candidates should understand that a change in the exchange rate will influence the current account,
and the importance of time and elasticity of demand on this effect. Candidates should be able to use
the J-curve, reverse J-curve and the Marshall-Lerner condition to explain such changes.
(e) Development Economics and Globalisation
Candidates should understand the meaning and definition of economic development and the
measurement and limitations of statistics such as the Human Development Index.
Candidates should appreciate the differences between MEDCs, LEDCs and NICs.
Candidates should understand why countries may develop at different rates and be able to use
economic theory to explain these differences. Whilst an explicit understanding of economic
development models is not required, it is necessary for candidates to appreciate the concept of
sustainable development.
Candidates should understand the particular problems faced by LEDCs.
Candidates should understand how national governments can use policies to promote economic
development, and the arguments for and against state planning of economic development.
Candidates should understand what is meant by globalisation and appreciate the challenges and
opportunities the process offers for MEDCs such as the UK, and for LEDCs and NICs.
Candidates should understand the role of the World Trade Organisation (WTO) and appreciate the
arguments for and against WTO influence on the global economy.
(f) The European Union
Candidates should understand the benefits and costs of UK membership of the EU with reference to
issues already covered in the syllabus, such as trade and protectionism.
Candidates should appreciate that the Common Agricultural Policy (CAP) is a form of protectionism
and understand the impact of EU enlargement on issues such as the CAP and the EU budget.
Candidates should understand why countries have undergone European Monetary Union and the
arguments for and against UK adoption of the euro.
Appendix 1: Grade Descriptors
The following grade descriptors indicate the level of attainment characteristic of the given grade in
Economics at Pre-U. They give a general indication of the required standard at each specific grade.
The descriptors should be interpreted in relation to the content outlined in the syllabus; they are not
designed to define that content.
The grade awarded will depend in practice upon the extent to which the candidate has met the
Assessment Objectives overall. Shortcomings in some aspects of the examination may be balanced
by better performances in others.
Distinction (D2)
Candidates will demonstrate outstanding knowledge and critical understanding of a comprehensive

range of relevant economic theories and concepts.
They will apply this knowledge and understanding to analyse familiar and unfamiliar situations,
issues and problems, using many appropriate numerical and non-numerical techniques accurately.
They will effectively evaluate evidence and arguments, making full reasoned judgements to present
appropriate and well-supported conclusions, which demonstrate originality or an ability to think
‘outside the box’.
Merit (M2)
Candidates will demonstrate a substantial knowledge and understanding of a range of economic

theories and concepts.
They will accurately apply this knowledge and understanding to analyse familiar and unfamiliar
situations, issues and problems, using appropriate numerical and non-numerical techniques.
They will evaluate evidence and arguments to present appropriate reasoned and wide-ranging
conclusions.
Pass (P2)
Candidates will demonstrate either a limited knowledge and understanding of a range of economic
theories and concepts or a reasonably comprehensive understanding of a far more limited subset of
relevant theories and concepts.
They will show some ability to use this knowledge and understanding to analyse familiar and
unfamiliar situations, issues and problems, making some use of numerical and non-numerical
techniques.
Candidates’ evaluation of evidence and arguments will be present but will either fail to cover all the
relevant areas or will be lacking in depth.
Appendix 2: Additional Information
Guided Learning Hours
It is intended that each Principal Subject should be delivered through 380 hours of guided learning.
This is a notional measure of the substance of the qualification. It includes an estimate of the time
that might be allocated to direct teaching or instruction, together with other structured learning time
such as directed assignments or supported individual study and practice. It excludes learner-initiated
private study.
Certification Title
This qualification is shown on a certificate as:

• Cambridge International Level 3 Pre-U Certificate in Economics (Principal)
The qualification is accredited at Level 3 of the UK National Qualifications Framework and provides a
solid grounding for candidates to pursue a variety of progression pathways.
Entries
For Entry information please refer to the Pre-U E3 Booklet.
Grading and Reporting
The Cambridge International Level 3 Pre-U Certificates in the Principal Subjects are qualifications in
their own right. They are acceptable as an alternative to A Level (or other Level 3 qualifications) for
entry into Higher Education or employment. Each individual Principal Subject is graded separately
on a scale of nine grades: Distinction 1, Distinction 2, Distinction 3, Merit 1, Merit 2, Merit 3, Pass 1,
Pass 2, Pass 3.
Subjects can also be combined with two core components to meet the requirements for eligibility for
the Cambridge International Level 3 Pre-U Diploma. More details about the Diploma requirements
and the core components can be found in a separate Diploma syllabus. The results of the individual
Principal Subjects are reported on a separate certificate to the Diploma result.
Classification Code for UK Centres
In the UK, every syllabus is assigned to a national classification code that indicates the subject area
to which it belongs. UK Centres should be aware that candidates who enter for more than one
qualification with the same classification code will have only one grade (the highest) counted for the
purpose of the School and College Performance Tables.
The classification code for this syllabus is 4410.
Language
This syllabus and the associated assessment materials are available in English only.
Procedures and Regulations
This syllabus complies with the CIE Code of Practice and The Statutory Regulation of External
Qualifications 2004.
Further information about the administration of Cambridge Pre-U qualifications can be found in
the CIE Handbook for Cambridge Pre-U Centres available from CIE Publications or by contacting
[email protected]
Spiritual, Moral, Ethical, Social, Legislative, Economic and Cultural issues
Economic issues are the essence of the syllabus. The syllabus is presented in such a way as to
include, where appropriate, the spiritual, moral, ethical, social and cultural dimensions of Economics.
For example the study of market failure, including inequitable distribution of income (Section 1d),
has major moral and ethical dimensions. The rationale for government intervention in the market
(Section 1e), government action on minimum wages and discrimination in the labour market (Section
1f), and the purposes and methods of alternative government macroeconomic policies (Section 2i),
occur within a legislative framework.
Environmental Education and Sustainable Development
In Section 2b candidates study whether economic growth is sustainable or desirable. In Section

3e they further study sustainable development in the context of Development Economics.
The environment is also considered in the study of market failure and government intervention
(Sections 1d and 1e).
The European and International Dimension
CIE has developed this syllabus in line with UK, European and international legislation. Candidates
study several aspects of International Economics in Section 3 of this syllabus, including the European
Union specifically in Section 3f. Material on the European economy may be introduced across the
syllabus to aid economic knowledge and understanding, and the development of appropriate skills.
Avoidance of bias
CIE has taken great care in the preparation of this syllabus and associated assessment materials to
avoid bias of any kind.
Key Skills
The nature of the subject and the skills it involves mean that the syllabus provides opportunities for
the development of the Key Skills of Communication, Application of Number, Information Technology,
Working with Others, Improving Own Learning and Performance and Problem Solving at Levels 2
and/or 3. However, the extent to which evidence can be created to fulfil the Key Skills criteria at these
levels will be dependent on the style of teaching and learning adopted for this syllabus. With careful
planning, assignments could be set for classroom or personal study that could be used as part of
the portfolio of evidence for the Key Skills assessments. In addition, some or all of the research and
planning conducted as preparation for Paper 3 may be suitable for use in a Key Skills portfolio.
The Key Skills awarding bodies and the regulatory authorities have produced a suite of example
portfolios that will help to give candidates and practitioners a clear understanding of the
requirements for the Key Skills portfolio. These are available on the QCA Key Skills website
(www.qca.org.uk/keyskills). Full details of the requirements for certification can be obtained
from the awarding bodies that are approved to offer Key Skills. For further information about
Key Skills assessment, including the current standards, please see the document The Key Skills
Qualifications Standards and Guidance published by the Qualifications and Curriculum Authority 2004
(ISBN 1 85838 548 2).
The following table indicates where opportunities may exist for at least some coverage of the various
Key Skills criteria at Levels 2 and/or 3 for this syllabus.
Improving Own
Application Working Problem
Section Communication IT Learning and
of Number with Others Solving
Performance
Microeconomics 9 9 9 9 9 9
The National
9 9 9 9 9 9
Economy
International
9 9 9 9 9 9
Economics
Paper 3 9 9 9 9 9 9
University of Cambridge International Examinations
1 Hills Road, Cambridge, CB1 2EU, United Kingdom
Tel: +44 1223 553554 Fax: +44 1223 553558
Email: [email protected] Website: www.cie.org.uk
© University of Cambridge International Examinations 2007
*3632761320*

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Cambridge Pre-U Syllabus

Cambridge International Level 3

For examination in 2010, 2011 and 2012

For examination in 2010, 2011 and 2012

Copyright © University of Cambridge Local Examinations Syndicate 2008

Cambridge International Level 3 Pre-U Certificate

Appendix 1: Grade Descriptors 21

Appendix 2: Additional Information 22

• A programme of study which supports the development of well-informed, open and

AO1 demonstrate knowledge and understanding;

Paper 1 will consist of:

• Section A: 30 compulsory multiple-choice questions on the whole syllabus content

Paper 2: Essay Paper

• Transport and the Environment

Paper Paper 1 Paper 2 Paper 3 Total

Assessment Objectives Percentage of Principal Qualification

1 Knowledge 12±4 8±4 3±2 23

2 Application 12±4 8±4 3±2 23

3 Analysis 10±4 12±4 5±3 27

4 Evaluation 6±3 12±4 9±4 27

Weighting of Paper 40% 40% 20% 100%

(b) The Market Mechanism and Demand and Supply Analysis

• own-price elasticity of demand

Candidates should understand the concept of equilibrium within a market.

(c) Costs of Production, Profit and the Theory of the Firm

Candidates should have a good understanding of price discrimination, as opposed to price

(d) Causes of Market Failure

(e) Government Intervention in the Market

Rationale for Government Intervention

Public Ownership vs Privatisation and Regulation vs De-regulation of Markets

• understand the arguments for and against such policies

• understand the principles of cost-benefit analysis

Government failure can include inadequate information, conflicting objectives, excessive

• create rather than remove market distortions

(f) The Labour Market

2 The National Economy

Candidates should develop a good understanding of:

(a) Standards of Living

For each issue candidates should study:

• Meaning and Measurement

Candidates are also required to have knowledge of relevant:

(h) Macroeconomic Theory

(a) Standards of Living

(b) Economic Growth and Economic Cycle

(c) Employment and Unemployment

Knowledge is required in the following areas:

• Definitions and measures of unemployment

(d) Inflation and Deflation

(e) Distribution of Income

(f) Current Account of Balance of Payments

(g) Productivity and International Competitiveness

(h) Macroeconomic Theory

Circular Flow of Income

Aggregate Demand (AD)

Aggregate Supply (AS)

(i) Government Policy

Candidates should study:

• Objectives of macroeconomic policies

Conflicts Between Objectives

(a) The Theory of Free Trade