Theme 1: Introduction to markets and market faliure

1.1 Nature of economics

• 1.1.1 Economics as a social science
• 1.1.2 Positive and normative economic statements
• 1.1.3 The economic problem
• 1.1.4 Production possibility frontiers
• 1.1.5 Specialisation and the division of labour
• 1.1.6 Free market economies, mixed economy and command economy

 

1.2 How markets work 

• 1.2.1 Rational decision making
• 1.2.2 Demand
• 1.2.3 Price, income and cross elasticities of demand
• 1.2.4 Supply
• 1.2.5 Elasticity of supply
• 1.2.6 Price determination
• 1.2.7 Price mechanism
• 1.2.8 Consumer and producer surplus
• 1.2.9 Indirect taxes and subsidies
• 1.2.10 Alternative views of consumer behaviour

 

1.3 Market faliure 

• 1.3.1 Types of market failure
• 1.3.2 Externalities
• 1.3.3 Public goods
• 1.3.4 Information gaps

 

1.4 Government intervention 

• 1.4.1 Government intervention in markets
• 1.4.2 Government failure