SECTION A — GENETICS & MOLECULAR BIOLOGY
B01DNA Structure & Replication (Extended Detail)
▼- Nucleotide structure: deoxyribose sugar (5-carbon) + phosphate group + nitrogenous base. Three types of bond: covalent (within strand — phosphodiester bonds), hydrogen (between base pairs)
- Base pairing rules: Adenine–Thymine (2 hydrogen bonds); Cytosine–Guanine (3 hydrogen bonds). G≡C bond is stronger → more stable DNA regions
- Antiparallel strands: one strand runs 5'→3', other runs 3'→5'. This is essential for replication and transcription
- Semi-conservative replication: Helicase breaks hydrogen bonds → unwinds double helix. DNA polymerase adds complementary nucleotides (5'→3' direction only). Result: two DNA molecules, each with one original + one new strand
- Meselson-Stahl experiment: used ¹⁵N (heavy) and ¹⁴N (light) nitrogen isotopes to prove semi-conservative replication by centrifugation
- Mutation types: substitution (one base replaced — may be silent, missense, or nonsense), insertion/deletion (frameshift — shifts reading frame → completely different amino acids downstream)
🫀Paper 2 skill: Given a DNA sequence, identify the complementary strand, write the mRNA sequence (U replaces T), and determine amino acids using a codon table. Count bases, calculate % composition (Chargaff's rule: %A=%T, %G=%C).
B02Protein Synthesis — Transcription & Translation
▼Transcription (Nucleus)
- DNA double helix unwinds
- RNA polymerase reads template strand 3'→5'
- mRNA built 5'→3' with complementary bases (A→U, T→A, G→C, C→G)
- mRNA leaves nucleus via nuclear pore
- Introns (non-coding) spliced out → exons remain (in eukaryotes)
Translation (Ribosome)
- mRNA binds ribosome
- tRNA carries amino acid to ribosome
- tRNA anticodon pairs with mRNA codon
- Peptide bond formed between amino acids
- Ribosome moves along mRNA (5'→3')
- Stop codon (UAA, UAG, UGA) → polypeptide released
Codon3 bases on mRNA → codes for 1 amino acid
Anticodon3 bases on tRNA → complementary to mRNA codon
Degenerate code64 codons for only 20 amino acids — multiple codons per amino acid
Universal codeSame codons code for same amino acids in ALL organisms
⚠️Paper 2 frequently gives you a codon table. Practice: DNA template → mRNA → amino acid sequence. Also know: mutation effect on protein — substitution may conserve function (degenerate code); frameshift almost always destroys it.
B03Cell Division — Mitosis & Meiosis (Extended)
▼| Stage of Mitosis | What Happens |
|---|---|
| Interphase | DNA replicates (S phase); cell grows (G1, G2); organelles duplicated. NOT a stage of mitosis itself. |
| Prophase | Chromosomes condense & become visible; spindle fibres form from centrioles; nuclear envelope breaks down |
| Metaphase | Chromosomes line up at cell equator (metaphase plate); spindle fibres attach to centromeres |
| Anaphase | Centromeres split; sister chromatids pulled to opposite poles by spindle fibres shortening |
| Telophase | Nuclear envelopes reform; chromosomes uncoil; spindle disappears |
| Cytokinesis | Cytoplasm divides → two identical daughter cells |
- Meiosis I — Prophase I: homologous chromosomes pair up (synapsis → bivalents); crossing over occurs at chiasmata → genetic variation
- Meiosis I: homologous pairs separate → two haploid cells (still with sister chromatids)
- Meiosis II: sister chromatids separate (like mitosis) → 4 genetically different haploid cells
- Sources of genetic variation in meiosis: crossing over (Prophase I), independent assortment (random orientation at Metaphase I), random fertilisation
- Non-disjunction: homologues or sister chromatids fail to separate → aneuploidy. e.g. Down syndrome (trisomy 21 — 3 copies of chromosome 21)
B04Inheritance — Dihybrid, Linkage & Chi-Squared
▼- Dihybrid cross: two genes on different chromosomes. AaBb × AaBb → 9:3:3:1 ratio (9 A_B_ : 3 A_bb : 3 aaB_ : 1 aabb)
- Linked genes: on same chromosome → tend to inherit together → ratios deviate from 9:3:3:1. Crossing over can separate linked genes
- Sex-linked (X-linked) inheritance: gene on X chromosome. Males (XY) show condition from single recessive allele. Females need two copies (carrier vs affected)
- Pedigree analysis: autosomal dominant (every generation affected, unaffected parents can have affected children); autosomal recessive (skip generations, carriers exist); X-linked (more males affected)
🫀Chi-squared (χ²) test: Used to determine if observed results differ significantly from expected. χ² = Σ[(O−E)²/E]. Compare to critical value (df = n−1) at p=0.05. If χ² > critical value → reject null hypothesis (significant difference). If χ² ≤ critical → accept null (difference due to chance).
df (degrees of freedom)Number of classes − 1
Null hypothesisAny difference between observed and expected is due to chance
SECTION B — PHYSIOLOGY & HOMEOSTASIS (EXTENDED)
B05Enzyme Kinetics & Inhibition (Extended)
▼- Michaelis-Menten kinetics: at low [S], rate increases with substrate; at high [S], all active sites occupied → Vmax (maximum velocity). Km = substrate concentration at ½ Vmax
- Competitive inhibitor: same shape as substrate → binds active site → blocks substrate. Effect reversible by increasing [S]. Graph: Vmax unchanged, Km increases
- Non-competitive inhibitor: binds allosteric site → changes active site shape → substrate cannot bind. Increasing [S] doesn't reverse it. Graph: Vmax decreases, Km unchanged
- Allosteric regulation: product binds allosteric site → inhibits enzyme → negative feedback control of metabolic pathways
- Cofactors & coenzymes: inorganic ions (Fe²⁺, Zn²⁺, Mg²⁺) activate enzymes. Coenzymes (NAD, FAD, CoA) organic molecules that carry groups
Rate of reaction
↑ Vmax ─────────────────────────────
│ /
│ /
│ /
│ /
│ /
─────────────────────────────────→ [Substrate]
Km↑ (comp. inhibitor shifts Km right)
Vmax↓ (non-comp. inhibitor lowers ceiling)
B06Cellular Respiration — Full Pathways
▼Glycolysis (cytoplasm)
→
Pyruvate oxidation (mitochondrial matrix)
→
Krebs cycle (matrix)
→
Oxidative phosphorylation (inner membrane)
| Stage | Location | Inputs | Products | ATP yield |
|---|---|---|---|---|
| Glycolysis | Cytoplasm | Glucose + 2ATP | 2 pyruvate, 2 NADH, 4ATP (net 2) | 2 ATP |
| Link reaction | Mitoch. matrix | 2 pyruvate | 2 acetyl-CoA, 2CO₂, 2NADH | 0 |
| Krebs cycle | Matrix | 2 acetyl-CoA | 4CO₂, 6NADH, 2FADH₂, 2ATP | 2 ATP |
| Ox. phosphorylation | Inner membrane | NADH, FADH₂, O₂ | H₂O, proton gradient → ATP | ~34 ATP |
| Total aerobic | ~38 ATP | |||
- Electron transport chain: NADH and FADH₂ donate electrons to protein complexes in inner mitochondrial membrane → proton (H⁺) gradient across membrane → ATP synthase uses gradient (chemiosmosis) → ATP produced
- Anaerobic alternatives: if no O₂, pyruvate → lactate (animals) or ethanol + CO₂ (yeast). Only 2 ATP total. NAD recycled to allow glycolysis to continue
- RQ (Respiratory Quotient): CO₂ produced ÷ O₂ consumed. Carbohydrate = 1.0; Fat = 0.7; Protein ≈ 0.8. Mixed diet ≈ 0.85
B07Transport in Blood — Haemoglobin & Oxygen Dissociation
▼- Haemoglobin (Hb): 4 polypeptide chains (2α + 2β), each with a haem group containing Fe²⁺ that binds one O₂ molecule → total: 4O₂ per Hb
- Cooperative binding: binding of first O₂ changes Hb shape → easier for next O₂ to bind → sigmoidal (S-shaped) oxygen dissociation curve
- Bohr effect: increased CO₂ → more carbonic acid → lower pH → Hb affinity for O₂ decreases → O₂ released more readily in active tissues. Curve shifts RIGHT
- Fetal Hb: has higher O₂ affinity than adult Hb → dissociation curve shifts LEFT → allows fetus to take O₂ from maternal blood across placenta
- CO₂ transport: ~70% as bicarbonate (HCO₃⁻) in plasma; ~23% bound to Hb as carbaminohaemoglobin; ~7% dissolved in plasma
- Chloride shift: HCO₃⁻ exits RBC into plasma; Cl⁻ enters to maintain electrical balance
💡Oxygen dissociation curve: x-axis = pO₂ (partial pressure O₂); y-axis = % saturation of Hb. At lungs (high pO₂) → Hb fully loaded. At tissues (low pO₂, high CO₂) → Hb unloads O₂. Bohr shift → curve moves right → more O₂ released at any given pO₂.
B08Nervous System — Action Potentials & Synaptic Transmission
▼- Resting potential: −70mV inside vs outside. Maintained by Na⁺/K⁺ pump (3 Na⁺ out, 2 K⁺ in per cycle, using ATP). More K⁺ channels open at rest → K⁺ leaks out
- Action potential stages: (1) Depolarisation: stimulus → Na⁺ channels open → Na⁺ rushes in → inside becomes +40mV. (2) Repolarisation: Na⁺ channels close, K⁺ channels open → K⁺ flows out → returns to −70mV. (3) Hyperpolarisation: slight overshoot below −70mV → refractory period → next action potential cannot fire
- All-or-nothing law: either full action potential or nothing — threshold must be reached (~−55mV)
- Saltatory conduction: myelinated fibres — impulse jumps between Nodes of Ranvier → much faster. Speed also increased by larger axon diameter
- Synaptic transmission: action potential → Ca²⁺ channels open → Ca²⁺ influx → vesicles fuse with presynaptic membrane → neurotransmitter released by exocytosis → diffuses across 20nm cleft → binds postsynaptic receptors → new action potential (or not — inhibitory)
- Cholinergic synapses: acetylcholine (ACh) is NT. Acetylcholinesterase breaks ACh down → choline recycled. Drugs: nicotine mimics ACh; nerve agents block acetylcholinesterase
- Summation: Temporal (repeated stimuli from one neurone sum up); Spatial (multiple neurones stimulate simultaneously → combined effect reaches threshold)
B09Hormones — Detailed Mechanisms & Feedback
▼| Hormone | Type | Mechanism |
|---|---|---|
| Steroid hormones (e.g. testosterone, oestrogen, cortisol) | Lipid-soluble | Cross cell membrane → bind intracellular receptor → receptor-hormone complex enters nucleus → activates/represses gene transcription |
| Peptide hormones (e.g. insulin, glucagon, ADH, FSH, LH) | Water-soluble | Cannot cross membrane → bind receptor on cell surface → activates 2nd messenger (e.g. cAMP via adenylate cyclase) → cascade of intracellular effects |
| Adrenaline (catecholamine) | Amine (water-soluble) | Binds surface receptor → cAMP second messenger → activates protein kinases → glycogenolysis in liver, ↑HR, pupil dilation |
- Negative feedback (HPG axis): Hypothalamus → GnRH → Anterior pituitary → FSH/LH → gonads → sex hormones. High sex hormone → inhibits hypothalamus and pituitary → less FSH/LH
- Menstrual cycle hormonal control: Low oestrogen → FSH rises → follicle grows → oestrogen rises → LH surge → ovulation → corpus luteum → progesterone → maintains endometrium → if no pregnancy, progesterone falls → menstruation
- Contraceptive pill: high oestrogen/progesterone → negative feedback → suppresses FSH/LH → no follicle development → no ovulation
B10Kidney — Nephron Detailed Mechanism & Osmoregulation
▼| Nephron Region | Process | Detail |
|---|---|---|
| Glomerulus / Bowman's capsule | Ultrafiltration | High hydrostatic pressure forces small molecules out. Podocytes have filtration slits. Filtered: water, glucose, urea, ions, amino acids. NOT filtered: proteins, RBCs (too large) |
| Proximal convoluted tubule (PCT) | Selective reabsorption | 100% glucose reabsorbed by active transport. Most water (70%) reabsorbed by osmosis. Amino acids, vitamins. Microvilli (brush border) for large SA. Na⁺/K⁺ ATPase drives Na⁺ out → creates gradient for glucose/amino acid co-transport |
| Loop of Henle | Creates medullary gradient | Descending limb: permeable to water only → water leaves by osmosis. Ascending limb: impermeable to water; Na⁺/Cl⁻ actively pumped out → hyperosmotic medulla. Countercurrent multiplier |
| Distal convoluted tubule (DCT) | Fine adjustment | Variable reabsorption of water & ions regulated by aldosterone (Na⁺ reabsorption) and ADH |
| Collecting duct | Final water reabsorption | ADH (from posterior pituitary) → inserts aquaporins → more permeable → water reabsorbed → concentrated urine. Low ADH → dilute urine |
🫀Osmoregulation: High blood osmolarity (dehydration) → detected by osmoreceptors in hypothalamus → ADH released from posterior pituitary → collecting duct more permeable → water reabsorbed → blood osmolarity restored. Negative feedback.
B11Immune System — Detailed Cellular Mechanisms
▼- Antigen presentation: Phagocyte engulfs pathogen → displays antigen fragments on surface via MHC II proteins → recognised by T-helper cells
- T-helper cells (CD4+): activated by antigen + MHC → release cytokines (interleukins) → stimulate B-cells and cytotoxic T-cells
- B-cell activation: antigen binds B-cell receptor → T-helper cytokines also needed → B-cell divides (clonal expansion) → plasma cells (secrete antibodies) + memory B-cells
- Antibody structure: Y-shaped; 4 polypeptides (2 heavy + 2 light); variable regions (antigen binding sites) at tips — specific to one antigen; constant region — binds complement or phagocytes
- Antibody functions: agglutination (clump pathogens), opsonisation (coat pathogens for phagocytosis), neutralisation (block toxins/receptor sites), complement activation (pore formation in pathogen membrane)
- Cytotoxic T-cells (CD8+): recognise antigen + MHC I → release perforin (pores in target cell membrane) → apoptosis. Kill virus-infected cells and cancer cells
- HIV and immunosuppression: HIV infects T-helper cells (via CD4 receptor) → replicates using reverse transcriptase (RNA→DNA) → inserts into host genome → kills T-helper cells → immune system collapses → AIDS
- Monoclonal antibodies: produced by hybridoma cells (B-cell + myeloma fusion). Used in: pregnancy tests, ELISA, targeted cancer therapy (e.g. herceptin for breast cancer)
B12Cardiovascular System — Cardiac Cycle & ECG
▼| Phase | Event | Valves |
|---|---|---|
| Atrial systole | Atria contract → blood pushed into ventricles | Atrioventricular valves open; semilunar closed |
| Ventricular systole | Ventricles contract → blood pushed out to arteries | AV valves close (→ lub sound); semilunar open |
| Diastole | All chambers relax → fill with blood | Semilunar close (→ dub sound); AV valves open |
- Cardiac conduction: SAN (sinoatrial node = pacemaker) → electrical impulse spreads across atria → AVN (atrioventricular node) → Bundle of His → Purkinje fibres → ventricles contract from base upward
- ECG waves: P wave = atrial depolarisation; QRS complex = ventricular depolarisation (atrial repolarisation hidden); T wave = ventricular repolarisation. Tachycardia = fast rate; Bradycardia = slow rate; Arrhythmia = irregular
- Cardiac output: CO = Heart Rate × Stroke Volume. Normal: 70 bpm × 70 mL = 4,900 mL/min ≈ 5L/min. During exercise, both HR and SV increase
- Atherosclerosis: LDL deposits → foam cells → fibrous plaque in artery wall → narrowed lumen + loss of elasticity → increased blood pressure → increased thrombosis risk
SECTION C — REPRODUCTION & DEVELOPMENT
B13Reproduction — Gametogenesis, Fertilisation & Embryology
▼Spermatogenesis (Testes)
- Spermatogonia (2n) → mitosis → primary spermatocytes
- Meiosis I → secondary spermatocytes (n)
- Meiosis II → spermatids (n)
- Spermiogenesis → mature spermatozoa
- Testosterone required for maturation
- Sertoli cells nourish developing sperm
Oogenesis (Ovaries)
- Begins before birth — primary oocytes formed
- Arrested in Prophase I until puberty
- Each month: one follicle matures (FSH)
- Primary oocyte → secondary oocyte + polar body
- Ovulation: secondary oocyte released
- Meiosis II complete only if fertilised
- Capacitation: sperm undergo changes in female tract → able to penetrate zona pellucida
- Acrosome reaction: sperm head releases enzymes → penetrate zona pellucida of egg
- Cortical reaction: upon sperm entry → cortical granules released → zona pellucida hardens → polyspermy prevented
- Implantation: blastocyst (hollow ball of cells) implants into endometrium ~day 6. Trophoblast cells invade → begin producing hCG → maintains corpus luteum → continues progesterone production
- Placenta development: chorionic villi develop → increase SA for exchange. Intervillous space filled with maternal blood. Fetal blood stays in villi (does not mix).
B14Growth, Development & Ageing
▼- Growth measurement: height, weight, head circumference. Growth velocity = rate of change. Growth curve is sigmoidal (S-shaped): slow → rapid → plateau
- Growth phases in humans: rapid in infancy → childhood plateau → puberty growth spurt → adult plateau → gradual decline (ageing)
- Puberty: GnRH → FSH + LH → sex hormones rise → secondary sexual characteristics. Girls: breast development, menarche, pubic hair. Boys: testicular growth, voice deepening, muscle mass
- Growth hormone (GH) effects: stimulates IGF-1 production in liver → promotes bone and muscle growth. Deficiency → dwarfism; excess → gigantism (childhood) or acromegaly (adult)
- Ageing (senescence): telomere shortening with each cell division → Hayflick limit (~50 divisions). Declining tissue repair, immune function, hormone production, organ efficiency
- Menopause: decline in egg number → less oestrogen/progesterone → FSH and LH rise (no negative feedback). Hot flushes, osteoporosis risk, mood changes
SECTION D — ECOLOGY & EXPERIMENTAL SKILLS
B15Ecology — Population Dynamics & Sampling
▼- Population growth curve: Lag phase (adaptation) → Log/Exponential phase (rapid doubling) → Stationary phase (birth = death, at carrying capacity K) → Death phase
- Limiting factors: food, water, space, predation, disease, competition → prevent exponential growth indefinitely → carrying capacity
- Mark-recapture (Lincoln Index): N = (M × n) / m. Where M = marked first catch, n = second catch total, m = recaptured marked. Assumptions: marks don't affect survival, marks don't come off, closed population
- Quadrat sampling: random quadrats → count individuals → calculate mean density → extrapolate to whole area. % frequency = number of quadrats containing species ÷ total quadrats × 100
- Transect: line transect (record what touches line) or belt transect (quadrats at intervals along line). Used to study zonation (gradual change in community across environmental gradient)
- Succession: pioneer community → gradual species replacement → climax community. Primary = bare rock. Secondary = disturbed soil (faster, more fertile). Each stage changes the environment for the next
B16Biotechnology & Genetic Engineering
▼Identify target gene
→
Cut gene with restriction endonuclease
→
Cut plasmid with same enzyme
→
Sticky ends join
→
DNA ligase seals
→
Recombinant plasmid into bacterium
→
Clone bacteria → express protein
- Restriction endonucleases: cut DNA at specific recognition sequences (palindromic). Leave sticky ends (complementary single strands) that allow ligation
- PCR (Polymerase Chain Reaction): amplify tiny DNA samples. Denature (94°C), Annealing of primers (55°C), Extension by Taq polymerase (72°C). Doubles DNA each cycle → 2ⁿ copies after n cycles
- Gel electrophoresis: DNA fragments separated by size through agarose gel (electricity). Smaller fragments travel further. Used in: DNA fingerprinting, forensics, paternity testing, diagnosis of genetic diseases
- Applications: Insulin production (E. coli containing human insulin gene); GM crops (herbicide resistance, golden rice with β-carotene gene); gene therapy (replace faulty alleles)
- Ethical issues: "playing God", GMO safety, gene therapy germline concerns, DNA database privacy, genetic discrimination
B17Data Skills — Graphs, Statistics & Experimental Design
▼- Types of data: Quantitative (counts/measurements — discrete or continuous); Qualitative (categories/descriptions)
- Graph types: Bar chart (discrete/categorical data); Histogram (continuous data in class intervals — no gaps); Line graph (continuous data over time/gradient); Scatter graph (correlation between two variables)
- Calculating rate from graph: gradient of tangent at a point. Units = y-axis units / x-axis units (e.g. cm³/min)
- Mean: Σx/n. Useful but affected by outliers. Standard deviation measures spread. Large SD → data more variable
- Correlation: positive, negative, or none. Correlation ≠ causation (could be confounding variables)
- Experimental design: independent variable (IV), dependent variable (DV), controlled variables. Control experiment. Repeat to check reliability. Randomisation to remove bias
- Anomalous results: do not ignore — investigate cause, repeat measurement. May indicate systematic error in method
🫀Paper 2 exam skill: "Describe the trend" — quote specific values with units. "Suggest an explanation" — apply biology. "Evaluate the method" — identify a limitation and suggest improvement. "Calculate the rate" — show your working, include units.
B18Disease — Epidemiology & Global Health
▼- Epidemiology: study of patterns, causes, and effects of disease in populations. Key measures: incidence (new cases), prevalence (existing cases), mortality rate, morbidity
- Communicable disease transmission: direct contact, droplet, airborne, vector (Anopheles mosquito → malaria), food/water (cholera), blood/body fluid (HIV)
- Malaria: Plasmodium (protozoan parasite) → 4 species. Life cycle: sporozoites in saliva → liver cells → merozoites → RBCs (lysis causes fever cycles) → gametocytes → mosquito. Drug resistance emerging (chloroquine)
- Cancer: uncontrolled cell division due to mutations in proto-oncogenes (become oncogenes → accelerate division) and tumour suppressor genes (e.g. p53 — normally triggers apoptosis). Environmental carcinogens: UV, tobacco, asbestos, radiation
- Non-communicable diseases (NCDs): cardiovascular disease, type 2 diabetes, cancers, COPD. Lifestyle risk factors: smoking, poor diet, physical inactivity, alcohol
- Herd immunity: threshold proportion of population immune → pathogen cannot spread. Varies by disease (measles ~95%, polio ~80%). Vaccine hesitancy threatens herd immunity
🫀 Human Biology P2 — Quiz Set 1: Molecular Biology
1. During DNA replication, which enzyme unwinds the double helix by breaking hydrogen bonds?
2. A DNA sequence reads 3'-ATGCCA-5' (template strand). What is the mRNA sequence produced?
3. A deletion mutation causes a frameshift. Why does this have a more severe effect than a substitution mutation?
4. What do tRNA molecules carry to the ribosome?
5. DNA from a sample with 30% Guanine. What percentage is Adenine?
🫀 Human Biology P2 — Quiz Set 2: Physiology
6. The Bohr effect describes how increased CO₂ affects haemoglobin. What is the result?
7. Which part of the nephron actively pumps Na⁺ and Cl⁻ out to create a hyperosmotic medulla?
8. A neurone is at resting potential (−70mV). What ions rush IN during depolarisation?
9. Cardiac output = Heart Rate × Stroke Volume. If HR = 80 bpm and SV = 85 mL, what is cardiac output?
10. Which cells release perforin to kill virus-infected cells and tumours?
🫀 Human Biology P2 — Quiz Set 3: Genetics & Biotechnology
11. A dihybrid cross between AaBb × AaBb (independent assortment). What fraction of offspring will be aabb (double recessive)?
12. PCR uses Taq polymerase rather than human DNA polymerase because:
13. In gel electrophoresis, smaller DNA fragments move:
14. During meiosis, crossing over occurs during which sub-stage?
15. Lincoln Index: First catch 50 marked. Second catch 80 total, 20 marked. Estimated population size?
16. What is the respiratory quotient (RQ) when ONLY fats are being respired?
📈Paper 2 format: Data response questions requiring analysis of graphs, tables and articles. Requires evaluation, application to context, and knowledge of all theory. Always use data from the source in your answers.
SECTION A — MICROECONOMICS
E01Supply, Demand & Market Equilibrium
▼Demand shifts LEFT if:
- Income falls (normal good)
- Income rises (inferior good)
- Price of complement rises
- Price of substitute falls
- Tastes turn against good
- Population decreases
- Expected future price falls
Supply shifts LEFT if:
- Cost of production rises
- Tax on producer imposed
- Technology worsens (rare)
- Natural disaster hits production
- Workers strike / wages rise
- Competing product more profitable
Consumer surplusArea above price line, below demand curve — benefit consumers gain above what they pay
Producer surplusArea below price line, above supply curve — benefit producers gain above minimum required
EquilibriumQuantity demanded = Quantity supplied; no tendency to change
💡In Paper 2: when a diagram is needed, ALWAYS label axes (Price / Quantity), label the curves (D, S), mark equilibrium (P* and Q*), and show the NEW equilibrium after shift with an arrow. State direction of price AND quantity change.
E02Price Elasticity of Demand (PED)
▼PED formulaPED = % change in Qd ÷ % change in Price
PED = 0Perfectly inelastic (vertical demand curve)
PED between 0 and 1Inelastic demand
PED = 1Unit elastic
PED > 1Elastic demand
PED = ∞Perfectly elastic (horizontal curve)
| Determinant | Effect on PED |
|---|---|
| Number of close substitutes | More substitutes → more elastic (easier to switch) |
| Necessity vs luxury | Necessities (insulin) → inelastic; luxuries → elastic |
| Proportion of income spent | Larger proportion → more elastic |
| Time period | Longer time → more elastic (find alternatives) |
| Habit / addiction | More addictive → more inelastic |
| Brand loyalty | Strong loyalty → more inelastic |
Elastic demand (PED>1)
- Price ↑ → TR falls
- Price ↓ → TR rises
- Revenue and price move OPPOSITE
Inelastic demand (PED<1)
- Price ↑ → TR rises
- Price ↓ → TR falls
- Revenue and price move SAME way
E03Price Elasticity of Supply (PES) & Other Elasticities
▼PES formulaPES = % change in Qs ÷ % change in Price
YED formulaYED = % change in Qd ÷ % change in Income
XED formulaXED = % change in Qd of A ÷ % change in price of B
| Elasticity | Positive value means | Negative value means |
|---|---|---|
| YED (income) | Normal good (more income → more bought) | Inferior good (more income → less bought) |
| XED (cross) | Substitutes (e.g. tea & coffee) | Complements (e.g. cars & petrol) |
- Factors affecting PES: time (longer time = more elastic), spare capacity, stock levels, mobility of factors (can production switch?), nature of product (perishable = inelastic), ease of entering industry
- PES = 0: fixed supply (e.g. land, paintings). PES = ∞: can supply any amount at same price (e.g. freely reproducible digital goods)
E04Market Failure — Externalities & Public Goods
▼Negative Externality (e.g. pollution)
- SMC (social) > PMC (private)
- Market over-produces → MSC > MSB
- Welfare loss (deadweight loss) triangle
- Solutions: tax (Pigouvian), regulation, cap-and-trade
Positive Externality (e.g. education)
- MSB > MPB (social benefit higher)
- Market under-produces
- Solutions: subsidy, provision by government, regulation (minimum education)
Market failureWhen free market fails to allocate resources efficiently → misallocation
Public goodsNon-excludable + Non-rivalrous → free rider problem → market provides zero → government must provide
Merit goodsPositive externalities + under-valued by consumers (healthcare, education) → under-consumed → government provides/subsidises
Demerit goodsNegative externalities + over-valued (cigarettes, alcohol) → over-consumed → tax/ban/regulation
📈Information failure: Consumers lack full information → make wrong choices. E.g. not knowing health risks of smoking → over-consume. Government response: advertising, labelling laws, warnings.
E05Government Intervention — Taxes, Subsidies & Price Controls
▼| Intervention | Effect on Market | Intended Purpose | Unintended Consequences |
|---|---|---|---|
| Indirect tax | Supply shifts left → higher P, lower Q | Discourage consumption; raise revenue | Regressiveness (hits poor harder); black markets; business relocation |
| Subsidy | Supply shifts right → lower P, higher Q | Encourage production; reduce price | Costly for government; inefficient producers kept alive; overproduction |
| Price ceiling (max price) | Set BELOW equilibrium → excess demand (shortage) | Keep prices affordable (e.g. rent controls, food price caps) | Shortage, black markets, reduced quality, under-investment |
| Price floor (min price) | Set ABOVE equilibrium → excess supply (surplus) | Guarantee minimum income (e.g. minimum wage, CAP) | Surplus, taxpayer burden, unemployment (if min wage) |
⚠️Price ceiling BELOW equilibrium → shortage. Price floor ABOVE equilibrium → surplus. Always draw these diagrams with the control line cutting through the supply/demand curves.
E06Production, Costs & Revenue
▼Total CostTC = FC + VC
Average Total CostATC = TC ÷ Q
Marginal CostMC = ΔTC ÷ ΔQ
Total RevenueTR = P × Q
Marginal RevenueMR = ΔTR ÷ ΔQ
Profit maximisationMC = MR (producing one more unit costs = earns)
Normal profitTR = TC (just covering opportunity cost)
Supernormal profitTR > TC (above what is needed to stay in industry)
- Law of diminishing returns (short run): adding more of a variable factor (labour) to fixed capital → each extra unit adds less output (falling marginal product) → MC rises
- Economies of scale (long run): as scale of production increases → LRAC (long-run average cost) falls. Diseconomies of scale: LRAC rises beyond minimum efficient scale
E07Market Structures — Perfect Competition, Monopoly & Oligopoly
▼| Feature | Perfect Competition | Monopoly | Oligopoly |
|---|---|---|---|
| Number of firms | Very many | One | Few large firms |
| Market power | None (price taker) | Complete (price maker) | Significant |
| Product type | Homogeneous | Unique | Differentiated or homogeneous |
| Barriers to entry | None | Very high | High |
| Long-run profit | Normal profit only | Supernormal possible | Supernormal possible |
| Price behaviour | P = MC | P > MC (inefficient) | Price rigidity (kinked demand) |
| Examples | Agricultural markets | Utility companies, patents | Airlines, supermarkets, oil (OPEC) |
- Barriers to entry (monopoly): legal (patents, licences), natural (high fixed costs → natural monopoly), brand loyalty, economies of scale, exclusive contracts, resource control
- Price discrimination: monopolist charges different prices to different consumers for same product. 1st degree: charge each consumer max willingness. 2nd: volume discounts. 3rd: segment by group (students, pensioners)
- Oligopoly — Kinked demand curve: if firm raises price → rivals don't follow → elastic demand above kink. If firm lowers price → rivals follow → inelastic below kink. Result: price stability
- Collusion: firms agree to fix prices/output (cartel). Illegal in most countries but some implicit. OPEC is legal international cartel. Temptation to cheat (prisoner's dilemma)
E08Labour Market — Wages, Trade Unions & Discrimination
▼- Labour demand: derived demand (demand for labour depends on demand for its output). Factors: productivity, wage rate, price of capital (substitution effect), product demand
- Labour supply: number of workers willing and able to work at a given wage. Backward-bending supply curve: beyond a wage level, income effect > substitution effect → work less
- Wage differentials: differences in wages due to — skill (human capital), risk/unpleasantness, education/training costs, labour market power (unions), discrimination, geographic mobility, elasticity of supply
- Trade unions: collective bargaining → push wages above equilibrium → potential unemployment (surplus of labour at higher wage). Benefits: higher wages, better conditions, representation
- Minimum wage: price floor in labour market. If set above equilibrium → reduces employment (some workers priced out). May increase spending if wage rise stimulates consumption
SECTION B — MACROECONOMICS
E09National Income & Economic Growth
▼GDP (expenditure)GDP = C + I + G + (X−M)
GNP / GNIGDP + net income from abroad
Real GDPAdjusted for inflation (removes price changes)
GDP per capitaGDP ÷ population (measure of average living standards)
Economic growth% increase in real GDP over time
- Limitations of GDP as welfare measure: ignores income distribution (Gini coefficient), ignores non-market activity (home care), environmental damage, leisure time, quality of goods, underground economy
- Better measures: HDI (education + health + income), Happy Planet Index, Genuine Progress Indicator
- Business cycle: Boom (high GDP, inflation, low unemployment) → Downturn → Recession (2+ quarters falling GDP) → Trough → Recovery → Boom
- Multiplier effect: initial injection (G, I, X) → circulates through economy → final increase in GDP larger than initial injection. Multiplier = 1/(1−MPC) = 1/MPS
E10Aggregate Demand & Aggregate Supply
▼AD = C + I + G + (X−M)
- C rises if: income ↑, confidence ↑, interest rates ↓, wealth ↑
- I rises if: interest rates ↓, business confidence ↑, corporation tax ↓
- G rises if: government spending ↑ (fiscal expansion)
- X−M rises if: exchange rate falls (exports cheaper); trading partners grow
LRAS (Long-Run Aggregate Supply)
- Vertical at full employment output
- Shifts RIGHT if: more capital, labour, technology, infrastructure
- Supply-side policies improve LRAS
- Classical view: economy self-corrects to LRAS
- Keynesian: SRAS important in short run
📈AD-AS model: AD shifts right → at LRAS: only prices rise (demand-pull inflation). If AD right below LRAS: output AND price rise. SRAS shift left → stagflation (rising prices + falling output). Output gap: negative = recession; positive = overheating.
E11Inflation — Causes, Effects & Measurement
▼InflationSustained general rise in price level. Measured by CPI (Consumer Price Index)
DeflationFalling price level — can cause deflationary spiral (delay purchases → less production → unemployment)
HyperinflationExtremely rapid inflation (e.g. Zimbabwe 2008, Germany 1923)
RPIRetail Price Index — includes housing costs (mortgage interest). Usually higher than CPI
| Type | Cause | AD-AS diagram |
|---|---|---|
| Demand-pull inflation | AD rises faster than AS can respond (e.g. government spending boom, credit expansion) | AD shifts right → price level rises |
| Cost-push inflation | Supply costs rise (wages, oil price) → firms raise prices | SRAS shifts left → P rises, Y falls |
| Built-in / wage-price spiral | Workers demand higher wages to cover inflation → cost rise → more inflation | Self-reinforcing spiral |
| Monetary inflation | Too much money in economy (MV=PQ — money supply growth exceeds output growth) | AD shifts right persistently |
- Effects of inflation: erodes savings (real value falls), redistributes from creditors to debtors, hurts exporters (goods more expensive), menu costs, shoe-leather costs, uncertainty deters investment, fixed income earners lose purchasing power
- Winners from inflation: borrowers (debt real value falls), owners of physical assets (property rises), governments (tax revenues rise with nominal GDP)
E12Unemployment — Types, Causes & Consequences
▼| Type | Cause | Solution |
|---|---|---|
| Cyclical (demand-deficient) | Fall in AD → firms produce less → lay off workers. Worst in recession | Expansionary fiscal/monetary policy (↑G, ↓interest rates) |
| Structural | Industries decline (e.g. coal, manufacturing), workers' skills no longer needed. Occupational mismatch | Retraining schemes, education, relocation subsidies |
| Frictional | Between jobs (searching). Always exists in economy — natural rate of unemployment | Better job information, recruitment services |
| Seasonal | Industries with seasonal demand (agriculture, tourism, construction) | Diversification of local economy |
| Technological | Automation replaces workers | Education, retraining, new industries |
- Costs of unemployment: lost output, government cost (benefits, lost tax revenue), social costs (crime, mental health, family breakdown), hysteresis (skills atrophy over time)
- NAIRU: Non-Accelerating Inflation Rate of Unemployment — unemployment rate at which inflation is stable. Below = demand pressure → inflation; Above = slack economy
- Claimant count vs ILO measure: Claimant count = claiming unemployment benefits; ILO = actively seeking work + available (broader, internationally comparable)
E13Fiscal Policy
▼Expansionary Fiscal Policy
- ↑ Government spending (G)
- ↓ Taxes (T)
- Increases AD → ↑ output, ↑ employment
- But: may cause inflation if near full employment
- Budget deficit widens
- Used in recession
Contractionary Fiscal Policy
- ↓ Government spending (G)
- ↑ Taxes (T)
- Reduces AD → reduces inflation
- But: may cause unemployment
- Budget deficit narrows (austerity)
- Used in overheating economy
Budget deficitG > T — government spending exceeds tax revenue
Budget surplusT > G — tax revenue exceeds spending
National debtAccumulated budget deficits over time — stock (not flow)
Automatic stabilisersUnemployment benefits ↑ in recession (G↑); tax revenues fall automatically (T↓) → fiscal stimulus without active policy
Crowding outGovernment borrowing → competes for funds → interest rates rise → private investment falls
⚠️Conflicts: Expansionary fiscal policy may worsen inflation or current account. Contractionary policy may worsen unemployment. Time lags (recognition, decision, implementation, effect) reduce effectiveness.
E14Monetary Policy
▼- Monetary policy: central bank uses interest rates and money supply to influence AD. Inflation targeting (UK: Bank of England targets 2% CPI)
- Interest rate rise → borrowing more expensive → C and I fall → AD falls → inflation reduces. BUT: mortgage costs rise, exchange rate rises (hot money flows in) → exports fall
- Interest rate cut → cheaper borrowing → C and I rise → AD rises → may reduce unemployment. BUT: may fuel asset price bubbles, may cause inflation
- Quantitative easing (QE): central bank creates money and buys assets (government bonds) from banks → banks have more money to lend → credit available → AD rises. Used when interest rates already near zero (zero lower bound)
- Exchange rate channel: low interest rates → capital outflows → currency depreciates → exports cheaper → AD rises via net exports
- Limitations: liquidity trap (banks don't lend even with QE), time lags, may not work if confidence low ("pushing on a string"), global interest rate conditions constrain domestic policy
E15Supply-Side Policy
▼| Policy | How it Works | Limitation |
|---|---|---|
| Education & training | ↑ Human capital → more productive workers → LRAS shifts right | Long time lag; expensive; skills may not match market needs |
| Tax cuts (income) | ↑ Work incentive → more labour supply → ↑ productive capacity | Laffer curve — beyond a point, cuts lose revenue; benefits wealthy most |
| Deregulation | Remove barriers → ↑ competition → ↑ efficiency → lower costs | May reduce protection of consumers/workers; systemic risk (financial) |
| Privatisation | Transfer to private sector → profit motive → efficiency | Natural monopolies → worse outcomes; social goals ignored |
| R&D investment | ↑ Technology → productivity improvement → potential output rises | Uncertain outcomes; positive externality means market under-invests |
| Immigration reform | Allow skilled migrants → ↑ labour supply in shortage areas | Political constraints; possible wage depression for native workers |
📈Supply-side policies shift LRAS right (increasing productive capacity), unlike demand-side which shift AD. Supply-side reduces inflationary pressure while increasing output — they are non-inflationary growth policies.
SECTION C — INTERNATIONAL ECONOMICS
E16International Trade — Comparative Advantage & Trade Policy
▼Absolute advantageCan produce more of a good with same resources than another country
Comparative advantageCan produce at lower OPPORTUNITY COST than another country — basis for beneficial trade
Terms of TradeIndex of export prices ÷ Index of import prices × 100
📈Comparative advantage example: UK produces 1 car OR 2 tonnes wheat. Germany produces 2 cars OR 2 tonnes wheat. Germany has absolute advantage in cars (opp cost = 1T wheat). UK opp cost of car = 2T wheat. Both gain if UK specialises in wheat, Germany in cars and they trade.
| Protectionist Measure | Effect | Justification |
|---|---|---|
| Tariff (import tax) | Import price rises → domestic demand shifts to domestic producers; government revenue | Protect infant industry, reduce deficit, retaliate |
| Import quota | Physical limit on imports → shortage of imports → domestic price rises | Protect domestic jobs; national security |
| Export subsidy | Makes exports cheaper abroad → ↑ competitiveness | Support exporters; balance of payments |
| Non-tariff barriers | Safety standards, admin delays → effectively restricts imports | Disguised protectionism |
E17Balance of Payments
▼| Account | Contains | UK Example |
|---|---|---|
| Current account | Trade in goods + services + income + transfers | UK usually in deficit (imports > exports) |
| Capital account | Debt forgiveness, migrants transferring assets (small) | Small in most countries |
| Financial account | FDI, portfolio investment, reserve changes, loans | UK surplus (foreign investment in UK) |
- Current account deficit: imports > exports. Causes: strong currency (exports expensive), low competitiveness, strong domestic demand for imports, high consumer spending
- Correcting deficit: depreciation of currency (exports cheaper, imports dearer — J-curve effect), deflation (reduces income → fewer imports), supply-side policies (improve competitiveness), protectionism
- J-curve effect: currency depreciation → initially deficit worsens (contracts inelastic in short run) → then improves (demand responds) → J-shape over time
E18Exchange Rates
▼| Floating Rate | Fixed Rate | |
|---|---|---|
| How set | Market forces (supply & demand for currency) | Government/central bank pegs to another currency/gold |
| Advantages | Automatic adjustment; no foreign reserves needed; monetary policy freedom | Certainty for trade; reduces inflation; disciplines government |
| Disadvantages | Uncertainty for trade; speculation; imported inflation | Large reserves needed; loss of monetary policy; misalignment |
- Currency appreciation: exchange rate rises → exports more expensive (competitiveness falls) → imports cheaper (lower import inflation) → current account worsens
- Currency depreciation: exchange rate falls → exports cheaper → imports more expensive → current account improves (if Marshall-Lerner condition met: PEDx + PEDm > 1)
- Hot money flows: speculative financial flows chase higher interest rates → cause short-run exchange rate volatility
- Managed float: mainly market-determined but central bank intervenes to prevent extreme movements (selling/buying own currency)
E19Economic Development & Inequality
▼- Poverty: Absolute poverty (cannot afford basic necessities — World Bank: $2.15/day); Relative poverty (below average standard of living in society)
- Gini coefficient: measure of inequality. 0 = perfect equality; 1 = one person owns everything. Lorenz curve: diagonal = perfect equality; actual curve below diagonal; Gini = area between curves / total area below diagonal
- Causes of inequality: differences in skills/education, inherited wealth, discrimination, unequal asset ownership, globalisation (skilled vs unskilled), tax and benefit system design
- Policies to reduce inequality: progressive taxation, means-tested benefits, minimum wage, universal basic income, education investment, land reform, inheritance tax
- Trade-off: growth vs equality: Some inequality may incentivise enterprise and innovation (Laffer, Kuznets curve). But extreme inequality reduces social mobility, trust, political stability, aggregate demand
- Kuznets curve: as countries develop, inequality first rises then falls (inverted U). Low income: traditional → industrialisation increases inequality → post-industrial: services, redistribution → inequality falls
E20Policy Conflicts & Economic Objectives
▼| Macro Objective | Target | Conflicts With |
|---|---|---|
| Low inflation | CPI 2% (UK target) | Low unemployment (Phillips curve short-run trade-off) |
| Low unemployment | Full employment | Low inflation (if economy overheats) |
| Economic growth | Sustainable 2–3% | Environment; current account (more imports with growth); inflation |
| Current account balance | Manageable deficit/surplus | Growth (more income → more imports); inflation control (deflation worsens CA) |
| Equality | Reduce Gini | Growth incentives; efficiency; government budget |
| Environmental sustainability | Net zero emissions | Growth; employment (phasing out fossil fuels) |
📈Phillips curve: Short-run trade-off between inflation and unemployment. Expansionary policy → lower unemployment but higher inflation. Long-run Phillips curve is VERTICAL at natural rate of unemployment (NAIRU) — no long-run trade-off.
💡Paper 2 evaluation tip: Always consider "it depends on..." — the size of the multiplier, the state of the economy (recession vs boom), time period, other policies in place, PED/PES values, openness of economy, consumer confidence.
📈 Economics P2 — Quiz Set 1: Micro
1. PED = −2.5. A firm raises price by 10%. What happens to Total Revenue?
2. A price ceiling set BELOW equilibrium will cause:
3. A negative externality in production means:
4. YED = −0.8 for a good. This means the good is:
5. In a perfectly competitive market, a firm's demand curve is:
6. The profit-maximising output rule is:
📈 Economics P2 — Quiz Set 2: Macro
7. GDP = C + I + G + (X−M). If exports = $200bn and imports = $250bn, what is the net export contribution?
8. Cost-push inflation in the AD-AS model is shown by:
9. The multiplier = 1/(1−MPC). If MPC = 0.75, what is the multiplier?
10. Cutting interest rates from 5% to 3% will most likely:
11. Structural unemployment is best addressed by:
12. A country's Terms of Trade rises. This means:
📈 Economics P2 — Quiz Set 3: International & Development
13. The J-curve effect shows that after a currency depreciation:
14. A Gini coefficient of 0 represents:
15. The Phillips Curve shows a short-run trade-off between:
16. Quantitative Easing (QE) is used when:
17. Country A can produce 10 cars or 20 tonnes wheat. Country B can produce 6 cars or 30 tonnes wheat. Which country has comparative advantage in cars?
18. Supply-side policies aim primarily to: