Skills You Need To Demonstrate (Cambridge (CIE) IGCSE Economics): Revision Note

An introduction to the skills

• The IGCSE Economics exams test three key skills:

• You will use these skills across both papers, but they are most heavily rewarded in Paper 2, where written explanations, diagrams and data analysis are required

• The exams assess your ability to:

  • Recall definitions and core economic concepts

  • Apply concepts to real-world contexts

  • Analyse diagrams, tables and written scenarios

  • Perform simple calculations

  • Explain cause–effect relationships

  • Make reasoned, balanced economic judgements

• Each of these skills must be demonstrated clearly and separately in longer answers

AO1 Knowledge and Understanding

• AO1 is the foundation of every Economics question

  • To score well in other skills, AO1 must be secure

• You gain AO1 marks for:

  • Recognising, recalling and stating key economics terms

  • Giving precise definitions (e.g., opportunity cost, inflation, PED)

  • Identifying characteristics, causes, features or effects

  • Selecting the correct formula for a calculation

  • Drawing accurate, fully labelled diagrams

  • Using appropriate terminology (scarcity, equilibrium, elasticity, productivity etc)

• Economic diagrams fall under AO1 only when they are drawn and labelled correctly

AO2 Analysis

• AO2 tests your ability to use economic concepts to explain real-world situations, and to show cause-effect relationships

  • AO2 is the skill used most frequently in 4-mark and 6-mark questions

• You gain AO2 analysis marks for:

  • Making developed explanations rather than simple statements

  • Showing chains of reasoning (“because… therefore… leading to…”)

  • Applying economics to:

    • data extracts

    • context paragraphs

    • diagrams

  • Using diagrams to support an explanation (e.g., explaining why a curve shifts)

  • Interpreting data from tables, charts or numerical information

  • Explaining why an event occurs or how one variable affects another

AO2 using diagrams

• When diagrams appear in Paper 2, AO2 marks are awarded for:

  • Explaining what the diagram shows

  • Explaining the economic reasoning behind a shift or movement

  • Linking the diagram to the context of the question

• The diagram itself is AO1, but the explanation of it is AO2

AO3 Evaluation

• AO3 is tested only in Paper 2, usually in 8-mark “Discuss” questions

• Evaluation means making:

  • Judgements

  • Comparisons

  • Trade-offs

  • Balanced reasoning

  • Considerations of “it depends” factors

  • Short-run vs long-run differences

  • Contextual decisions

• In the official Cambridge mark scheme, AO3 is credited through “levels of response”

• In Save My Exams resources, AO3 is made clearer using the defined-mark structure - where students develop two arguments on each side

• You gain AO3 marks for:

  • Considering both sides of an economic issue

  • Judging which side is stronger and why

  • Referencing context (where relevant)

  • Recognising limitations of arguments

  • Showing conditions under which a policy or outcome may change

• There is no need to write a full conclusion

Putting the skills together

• In most longer Paper 2 answers, you are expected to use two or more skills in the same response:

  • AO1 provides the definition, diagram or basic concept

  • AO2 develops explanations and shows cause–effect

  • AO3 weighs arguments and makes judgements

• For example, in an 8-mark “Discuss” question:

  • AO1 = the economic concepts used

  • AO2 = the two developed explanations on each side

  • AO3 = the balanced discussion across both sides

• Correctly combining the skills leads to full marks