Inflation calculation

Year 1 ( Base year)

Good            Average price       % of income spent by household     Weighted Average price      Index
A                      50                                          20                                  20%of50 = 10
B                       25                                         20                                  20%off25 = 5                      100
C                       100                                      60                                    60%of 100 = 60
                                                  Total  = 100                                    Total weighted
                                                                                                   Average price of base year is       
                                                                                                      10+5+60 = 75


Year 2 ( Current year)

Good     Average price           % of income spent by household      Weighted Average price     Index
A              60                                  30                                                     30%of60 = 18
B              45                                  20                                                     20%of 45 = 9                      ?
C          110                                    50                                                      50%of 110 = 55
                                                      Total = 100                                       Total weighted
                                                                                                    Average price of  year2 is
                                                                                                               18+9+55 = 82
 INDEX OF YEAR 2 = Weighted average price of year2/weighted average price of base year x 100
                                    =   82/75 x 100
                                   = 109.3
Therefore Inflation rate = 109.3 - 100
                                      = 9.3%

- Family Expenditure survey
- Basket of goods
- Weighting
-Base year
- Comparing base year and current year

Frequently Asked Questions

O Level Economics (2281)

Frequently Asked Questions

What is the course book?

There is no single course book for the O Level Economics syllabus. The resource list gives a

number of alternative books designed for similar courses, which we think will be helpful.

Do I need to teach the course in the order given in the syllabus?
No, the order in which you teach the course is entirely up to you.


Sometimes the questions start with a statement, e.g. about India and Kenya. Do the

candidates have to know about these economies?

No, they do not. The introductory quotation or statement is intended as stimulus material

only. Sometimes, particularly in the multiple choice papers, candidates will have to work with

the data given, but they are not expected to have prior knowledge of a specific economy.

Does this mean that there is no point in the candidates knowing about their own

economy?

No, it does not mean that. Candidates will receive credit for illustrating their answers, where

relevant, with examples from their own economy or any economy that they have studied.

Is the use of calculators allowed?

Yes. For details of the restrictions on graphic display, data banks etc, which apply to all CIE

examinations, see the Handbook for Centres.

Are marks deducted for wrong answers in the multiple choice?

No. The candidate’s mark is the total number of questions answered correctly.

Are the multiple choice questions arranged in any particular order on the paper?

They are broadly arranged in the same order as the topics appear in the syllabus booklet.

Where can I find the keys to the multiple choice questions?

They are in the published ‘Report on the Examination’, which is on the Teacher Support

website and the CIE Publications CD-ROM.

Are there any changes to the syllabus?

There are no changes to the syllabus for 2008. However, from June  2009 the syllabus has

changed in terms of content revision and updates.  Also 2013 syllabus also changed and from 2014 there are changes to the scheme of assessment. Please refer to the 2009 syllabus for further details.

Fast tricks in Price elasticity of demand calculation

MCQ paper has only one hour. So If you takes 1 minute per question, you will have 20 minutes left. But for some questions, candidates spends too long because they are rather difficult or they dont know the short cut.
Regarding the Price elasticity of demand calculation, question often comes with a sentence, diagram or a table. The traditional formula tells

PED = % change in QD/ % change in P

So, when the percentage is not given, apparently, the students have to calculate the % change in price and % change in Quantity.
However, an alternative formula can ease and make your calculations fast. The formula is

PED = change in Q/ initial Q x initial price / change in P

For example,  An increase of price from MVR 10 to MVR 12 leads to fall in quantity demanded from 20 units to 15 units.
Using the fast formula PED = 5/20 x 10/2 = 1.25

However, if you use traditional formula, you have to calculate the % change in price and quantity and obviously it consumes time. The traditional formula however is important when you attempt a paper 2 question on PED

Download Pastpapers, Marking schemes, Examiner's Reports

Link to access 2013 and 2014 Economics syllabus

O'level Economics New Assessment pattern from 2014

Cambridge students website

Cambridge International Examination

www.cie.org.uk

Changes to O'level Economics Syllabus for the year 2013

Changes to O’level Economics syllabus for the year 2013

Attention Teachers & Students

Some contents are relisted and some topics are newly added

 

Relisted Topics

 From;

Ø  describe the differences in earnings between different occupational groups (male/female; skilled/

            unskilled; private/public; agricultural/manufacturing/services);

            To;

Ø  describe the differences in earnings between different groups of workers (male/female; skilled/unskilled;

private/public; agricultural/manufacturing/services);

 From;

Ø  describe how the retail price index is calculated;

To;

Ø  describe how a consumer prices index/retail prices index is calculated;

 

*¹Newly Added Topics

Ø  demonstrate how production possibility curves can be used to illustrate choice and resource allocation;

Ø  distinguish between labour-intensive and capital-intensive production;

Ø  define productivity and recognise the difference between productivity and production;

Ø  describe the principle of profit maximisation as a goal and *²recognise that business organisations may

have different goals;

Ø  explain fiscal, monetary and *³supply-side policies;

Ø  analyse the use of fiscal, monetary and supply-side policies;

Ø  describe the difference between *⁴absolute and relative poverty;

Ø  discuss the causes and consequences of *⁵deflation.

Ø  define the term recession;

Ø  discuss the causes and consequences of current account deficits and surpluses;

 

^*1Some of the newly added topics might have appeared in the past exams, but the reason for including those as new topics is they are specifically mentioned in the syllabus now.

^*2 This part is completely new to the syllabus and teachers/students are kindly requested to give importance to this.

^*3 This part is completely new to the syllabus and teachers/students are kindly requested to give importance to this.

^*4 This part is completely new to the syllabus and teachers/students are kindly requested to give importance to this.

^*5 This part is completely new to the syllabus and teachers/students are kindly requested to give importance to this.

My Philosophy

Each one , take a step to teach one.