Cambridge (CIE) O Level Economics specification (2281)
Understanding the exam specification is key to doing well in your Cambridge (CIE) O Level Economics exam. It lays out exactly what you need to learn, how you'll be assessed, and what skills the examiners seek. Whether you're working through the course for the first time or revising for your final exams, the specification helps you stay focused and confident in your preparation.
We've included helpful revision tools to support you in putting the specification into practice. Wherever you're starting from, you'll find everything you need to feel prepared, from the official specification to high-quality resources designed to help you succeed.
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In the next section, you'll find a simplified summary of the official Cambridge (CIE) O Level Economics specification, along with a breakdown of key topics, assessment structure, and useful study resources. We've also included links to topic-level guides and revision tools to help you put the specification into practice.
Contents
Disclaimer
This page includes a summary of the official Cambridge (CIE) O Level Economics (2281) specification, provided to support your revision. While we've made every effort to ensure accuracy, Save My Exams is not affiliated with the awarding body.
For the most complete and up-to-date information, we strongly recommend consulting the official Cambridge (CIE) specification PDF.
Specification overview
Cambridge O Level Economics develops learners' understanding of economic theory, principles, and terminology, focusing on real-world applications and decision-making. The course equips students with skills in economic numeracy, analysis, and critical evaluation, enabling them to apply economic knowledge to contemporary issues affecting individuals, businesses, governments, and the global economy. It encourages logical expression of ideas, the use of data interpretation, and informed decision-making while providing a solid foundation for further studies or careers in economics and related fields.
Subject content breakdown
1 The basic economic problem
- Finite resources vs unlimited wants; economic and free goods.
- Factors of production: definitions, mobility, quantity, and quality.
- Opportunity cost and its influence on decision-making.
- Production possibility curves: definitions, movements, shifts.
2 The allocation of resources
- Microeconomics vs macroeconomics.
- The market system, price mechanism, resource allocation decisions.
- Demand: definition, diagrams, conditions affecting demand.
- Supply: definition, diagrams, conditions affecting supply.
- Price determination: market equilibrium and disequilibrium.
- Causes and consequences of price changes.
- Price elasticity of demand: calculation, determinants, significance.
- Price elasticity of supply: calculation, determinants, significance.
- Market economic system: advantages and disadvantages.
- Market failure: causes, consequences, key terms (public/merit/demerit goods, externalities).
- Mixed economic system: government intervention, policy measures, effectiveness.
3 Microeconomic decision makers
- Money and banking: forms, functions, roles of central and commercial banks.
- Households: influences on spending, saving, borrowing.
- Workers: occupation choice, wage determination, earnings differences, division of labour.
- Trade unions: role, advantages, disadvantages, influence on policy.
- Firms: classification, small firms, growth causes, mergers, economies/diseconomies of scale.
- Firms and production: demand for factors, production methods, productivity.
- Firms' costs, revenue, objectives: cost/revenue calculations, diagrams, firm aims.
- Market structure: competitive markets and monopolies.
4 Government and the macroeconomy
- Role of government at various levels.
- Macroeconomic aims and conflicts.
- Fiscal policy: government budget, spending, taxation, classification, impact, measures.
- Monetary policy: money supply, policy measures, effects.
- Supply-side policy: definition, measures, impact.
- Economic growth: definition, measurement, recession causes, consequences, policies.
- Employment/unemployment: definitions, patterns, measurement, causes, consequences, policies.
- Inflation/deflation: definitions, measurement, causes, consequences, control policies.
5 Economic development
- Living standards: indicators (GDP per capita, HDI), comparisons.
- Poverty: definitions, causes, alleviation policies.
- Population: factors affecting growth, effects on countries, demographic changes.
- Differences in economic development: causes, impacts between countries.
6 International trade and globalisation
- International specialisation: benefits and drawbacks.
- Globalisation, free trade, protectionism: MNCs, trade benefits, protection methods, reasons, consequences.
- Foreign exchange rates: determination, fluctuations, consequences, floating vs fixed systems.
- Balance of payments: structure, causes of deficits/surpluses, impacts, stabilisation policies.
Assessment structure
Paper 1: Multiple Choice
- 45 minutes, 30 marks, 30% of total.
- 30 compulsory questions covering all syllabus sections.
- Includes calculation-based questions.
- Assesses knowledge, understanding, and analysis (AO1, AO2).
Paper 2: Structured Questions
- 2 hours 15 minutes, 90 marks, 70% of total.
- Section A: One compulsory 30-mark question based on unseen source material.
- Section B: Three questions from a choice of four, each worth 20 marks.
- Questions may require short and extended responses, diagrams, and calculations.
Assesses knowledge, understanding, analysis, and evaluation (AO1, AO2, AO3).
Command words include: Analyse, Calculate, Define, Describe, Discuss, Explain, Give, Identify, State.
Assessment Objective Weightings:
- AO1 Knowledge and Understanding: 40%
- AO2 Analysis: 40%
- AO3 Evaluation: 20%
Key tips for success
Doing well in your Cambridge (CIE) O Level Economics isn't just about how much you study, but how you study. Here are a few proven tips to help you stay on track
- Start with a clear plan: Break the subject into topics and create a revision schedule that allows enough time for each. Start early to avoid last-minute stress.
- Focus on understanding, not memorising: Use our revision notes to build a strong foundation in each topic, making sure you actually understand the material.
- Practise regularly: Attempt past papers to familiarise yourself with the exam format and timing. Mark your answers to see how close you are to full marks.
- Be strategic with your revision: Use exam questions by topic to focus on weaker areas, and flashcards to reinforce important facts and terminology.
- Learn from mistakes: Whether it's from mock exams or practice questions, spend time reviewing what went wrong and why. This helps prevent repeat mistakes in the real exam.
- Stay balanced: Don't forget to take regular breaks, eat well, and get enough sleep, a healthy routine makes revision much more effective.
With the right approach and consistent practice, you'll build confidence and improve your chances of exam success.
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