AQA A-level Economics (new spec) 2-01 Decision Making and Utility

This is a Powerpoint (and accompanying Notes/Key Terms sheet) that I created for my own teaching of the new (linear) AQA A-level Economics specification (7135). As I was also using the AQA-approved textbook (Powell & Powell, 2016) the two follow a similar route through the material.

Topics covered in this Powerpoint:

4.1.2 Individual economic decision-making
4.1.2.1 Consumer behaviour
• Rational economic decision making and economic incentives.
• Utility theory: total and marginal utility, and the hypothesis of diminishing marginal utility.
• Utility maximisation.
• The importance of the margin when making choices.
• Students should appreciate that the hypothesis of diminishing marginal utility supports a downward sloping demand curve but they are not expected to understand the principle of equi-marginal utility or to use this principle to explain why there is likely to be an inverse relationship between price and quantity demanded.
4.1.2.2 Imperfect information
• The importance of information for decision-making.
• The significance of asymmetric information.
• Students should recognise that imperfect information makes it difficult for economic agents to make rational decisions and is a potential source of market failure.