1. Basic economic ideas and resource allocation

1.1 Scarcity, choice and opportunity cost

1.2 Economic methodology

1.3 Factors of production

1.4 Resource allocation in different economic systems

1.5 Production possibility curves

1.6 Classification of goods and services

2. The price system and the microeconomy

2.1 Demand and supply curves

2.2 Price elasticity, income elasticity and cross elasticity of demand

2.3 Price elasticity of supply

2.4 The interaction of demand and supply

2.5 Consumer and producer surplus

3. Government microeconomy intervention

3.1 Reasons for government intervention in markets

3.2 Methods and effects of government intervention in markets

3.3 Addressing income and wealth inequality

4. The Macroeconomy

4.1 National income statistics

4.2 Introduction to the circular flow of income

4.3 Aggregate Demand and Aggregate Supply analysis

4.4 Economic growth

4.5 Unemployment

4.6 Price stability

5. Government macroeconomic intervention

5.1 Government macroeconomic policy objectives

5.2 Fiscal policy

5.3 Monetary policy

5.4 Supply-side policy

6. International economic issues

6.1 The reasons for international trade

6.2 Protectionism

6.3 Current account of the balance of payments

6.4 Exchange rates

6.5 Policies to correct imbalances in the current account of the balance of payments

7. The price system and the microeconomy

7.1 Utility

7.2 Indifference curves and budget lines

7.3 Efficiency and market failure

7.4 Private costs and benefits, externalities and social costs and benefits

7.5 Types of cost, revenue and profit, short-run and long-run production

7.6 Different market structures

7.7 Growth and survival of firms

7.8 Differing objectives and policies of firms

8. Government microeconomic intervention

8.1 Government policies to achieve efficient resource allocation and correct market failure

8.2 Equity and redistribution of income and wealth

8.3 Labour market forces and government intervention

9. The macroeconomy

9.1 The circular flow of income

9.2 Economic growth and sustainability

9.3 Employment/unemployment

9.4 Money and banking

10. Government macroeconomic intervention

10.1 Government macroeconomic policy objectives

10.2 Links between macroeconomic problems and their interrelatedness

10.3 Effectiveness of policy options to meet all macroeconomic objectives

11. International economic issues

11.1 Policies to correct disequilibrium in the balance of payments

11.2 Exchange rates

11.3 Economic development

11.4 Characteristics of countries at different levels of development

11.5 Relationship between countries at different levels of development

11.6 Globalisation

A-Level CAIE Economics/Notes/7. The price system and the microeconomy

A-Level CAIE Economics 7. The price system and the microeconomy Notes

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