Unit 1: Markets in Action

Economics as a social science: inability to conduct scientific economics experiments.

Use a - economics as a social science: inability to conduct scientific economics experiments to connect the rule to the data and decision in the question.

This matters because a - economics as a social science: inability to conduct scientific economics experiments determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - economics as a social science: inability to conduct scientific economics experiments to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - Economics as a social science: inability to conduct scientific economics experiments is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The development of models in economics based on assumptions.

Use b - development of models in economics based on assumptions to connect the rule to the data and decision in the question.

This matters because b - development of models in economics based on assumptions determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - development of models in economics based on assumptions to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - development of models in economics based on assumptions is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The use of the ceteris paribus assumption in building models and drawing conclusions based on them.

Use c - use of the ceteris paribus assumption in building models and drawing conclusions based to connect the rule to the data and decision in the question.

This matters because c - use of the ceteris paribus assumption in building models and drawing conclusions based determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply c - use of the ceteris paribus assumption in building models and drawing conclusions based to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: c - use of the ceteris paribus assumption in building models and drawing conclusions based is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The distinction between positive statements and value normative judgements on economic issues. economics.

Use a - distinction between positive statements and value normative judgements on economic to connect the rule to the data and decision in the question.

This matters because a - distinction between positive statements and value normative judgements on economic determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - distinction between positive statements and value normative judgements on economic to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - distinction between positive statements and value normative judgements on economic is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The role of value judgements in influencing economic decision making and policy.

Use b - role of value judgements in influencing economic decision making and policy to connect the rule to the data and decision in the question.

This matters because b - role of value judgements in influencing economic decision making and policy determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - role of value judgements in influencing economic decision making and policy to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - role of value judgements in influencing economic decision making and policy is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The problem of unlimited wants and finite resources.

Use a - problem of unlimited wants and finite resources to connect the rule to the data and decision in the question.

This matters because a - problem of unlimited wants and finite resources determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - problem of unlimited wants and finite resources to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - problem of unlimited wants and finite resources is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The distinction between renewable and non-renewable resources.

Use b - distinction between renewable and non-renewable resources to connect the rule to the data and decision in the question.

This matters because b - distinction between renewable and non-renewable resources determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - distinction between renewable and non-renewable resources to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - distinction between renewable and non-renewable resources is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The link between scarcity and opportunity cost.

Use c - link between scarcity and opportunity cost to connect the rule to the data and decision in the question.

This matters because c - link between scarcity and opportunity cost determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply c - link between scarcity and opportunity cost to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: c - link between scarcity and opportunity cost is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The distinction between free goods and economic goods.

Use d - distinction between free goods and economic goods to connect the rule to the data and decision in the question.

This matters because d - distinction between free goods and economic goods determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply d - distinction between free goods and economic goods to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: d - distinction between free goods and economic goods is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The use of production possibility frontiers to depict: possibility; the maximum productive potential of an economy frontiers; efficient or inefficient allocation of resources; possible and unobtainable production; opportunity cost (using marginal analysis); economic growth and decline.

Use a - use of production possibility frontiers to depict: possibility • the maximum productive to connect the rule to the data and decision in the question.

This matters because a - use of production possibility frontiers to depict: possibility • the maximum productive determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - use of production possibility frontiers to depict: possibility • the maximum productive to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - use of production possibility frontiers to depict: possibility • the maximum productive is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The distinction between movements along, and shifts in, production possibility frontiers, and their possible causes.

Use b - distinction between movements along, and shifts in, production possibility frontiers, to connect the rule to the data and decision in the question.

This matters because b - distinction between movements along, and shifts in, production possibility frontiers, determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - distinction between movements along, and shifts in, production possibility frontiers, to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - distinction between movements along, and shifts in, production possibility frontiers, is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The distinction between capital goods and consumer goods.

Use c - distinction between capital goods and consumer goods to connect the rule to the data and decision in the question.

This matters because c - distinction between capital goods and consumer goods determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply c - distinction between capital goods and consumer goods to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: c - distinction between capital goods and consumer goods is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The significance of capital goods for productivity and economic growth.

Use d - significance of capital goods for productivity and economic growth to connect the rule to the data and decision in the question.

This matters because d - significance of capital goods for productivity and economic growth determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply d - significance of capital goods for productivity and economic growth to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: d - significance of capital goods for productivity and economic growth is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The advantages and disadvantages of specialisation and the the role of money division of labour in organising production; Adam Smith's views and financial on the division of labour. markets.

Use a - advantages and disadvantages of specialisation and the the role of money division of to connect the rule to the data and decision in the question.

This matters because a - advantages and disadvantages of specialisation and the the role of money division of determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - advantages and disadvantages of specialisation and the the role of money division of to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - advantages and disadvantages of specialisation and the the role of money division of is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The function of money as a medium of exchange, a measure and store of value, and a method of deferred payment; the significance of these functions for specialisation.

Use b - function of money as a medium of exchange, a measure and store of value, and a method to connect the rule to the data and decision in the question.

This matters because b - function of money as a medium of exchange, a measure and store of value, and a method determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - function of money as a medium of exchange, a measure and store of value, and a method to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - function of money as a medium of exchange, a measure and store of value, and a method is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The role of financial markets:; to facilitate saving; to make funds available to businesses and individuals; to facilitate the exchange of goods and services; to provide forward markets in commodities and currencies; to provide a market for equities.

Use c - role of financial markets: • to facilitate saving • to make funds available to to connect the rule to the data and decision in the question.

This matters because c - role of financial markets: • to facilitate saving • to make funds available to determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply c - role of financial markets: • to facilitate saving • to make funds available to to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: c - role of financial markets: • to facilitate saving • to make funds available to is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The distinction between free market, mixed and command mixed and economies. command.

Use a - distinction between free market, mixed and command mixed and economies. command to connect the rule to the data and decision in the question.

This matters because a - distinction between free market, mixed and command mixed and economies. command determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - distinction between free market, mixed and command mixed and economies. command to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - distinction between free market, mixed and command mixed and economies. command is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The advantages and disadvantages of free market and command economies economies.

Use b - advantages and disadvantages of free market and command economies economies to connect the rule to the data and decision in the question.

This matters because b - advantages and disadvantages of free market and command economies economies determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - advantages and disadvantages of free market and command economies economies to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - advantages and disadvantages of free market and command economies economies is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The role of the state in a mixed economy.

Use c - role of the state in a mixed economy to connect the rule to the data and decision in the question.

This matters because c - role of the state in a mixed economy determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply c - role of the state in a mixed economy to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: c - role of the state in a mixed economy is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The assumption of rationality in decision making: consumers aim decision making to maximise utility by making rational choices; firms aim to maximise profits.

Use a - assumption of rationality in decision making: consumers aim decision making to maximise to connect the rule to the data and decision in the question.

This matters because a - assumption of rationality in decision making: consumers aim decision making to maximise determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - assumption of rationality in decision making: consumers aim decision making to maximise to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - assumption of rationality in decision making: consumers aim decision making to maximise is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Reasons why consumers may not aim to maximise utility:; the influence of other people's behaviour (herding); habitual behaviour; inertia; poor computational skills; the need to feel valued; framing and bias.

Use b - reasons why consumers may not aim to maximise utility: • the influence of other to connect the rule to the data and decision in the question.

This matters because b - reasons why consumers may not aim to maximise utility: • the influence of other determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - reasons why consumers may not aim to maximise utility: • the influence of other to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - Reasons why consumers may not aim to maximise utility: • the influence of other is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The concept of 'demand'.

Use a - concept of 'demand' to connect the rule to the data and decision in the question.

This matters because a - concept of 'demand' determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - concept of 'demand' to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - concept of 'demand' is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The distinction between movements along a demand curve and shifts of a demand curve.

Use b - distinction between movements along a demand curve and shifts of a demand curve to connect the rule to the data and decision in the question.

This matters because b - distinction between movements along a demand curve and shifts of a demand curve determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - distinction between movements along a demand curve and shifts of a demand curve to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - distinction between movements along a demand curve and shifts of a demand curve is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The concept of diminishing marginal utility and its significance for the shape of the individual demand curve.

Use c - concept of diminishing marginal utility and its significance for the shape of the to connect the rule to the data and decision in the question.

This matters because c - concept of diminishing marginal utility and its significance for the shape of the determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply c - concept of diminishing marginal utility and its significance for the shape of the to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: c - concept of diminishing marginal utility and its significance for the shape of the is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Factors that may cause a shift in the demand curve:; changes in the price of substitutes or complementary goods; changes in real income; changes in tastes; changes in size and age distribution of the population; advertising.

Use d - factors that may cause a shift in the demand curve: • changes in the price of to connect the rule to the data and decision in the question.

This matters because d - factors that may cause a shift in the demand curve: • changes in the price of determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply d - factors that may cause a shift in the demand curve: • changes in the price of to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: d - Factors that may cause a shift in the demand curve: • changes in the price of is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The concepts of 'price', 'income' and 'cross-elasticities of cross-elasticities demand'. of demand.

Use a - concepts of 'price', 'income' and 'cross-elasticities of cross-elasticities demand'. of to connect the rule to the data and decision in the question.

This matters because a - concepts of 'price', 'income' and 'cross-elasticities of cross-elasticities demand'. of determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - concepts of 'price', 'income' and 'cross-elasticities of cross-elasticities demand'. of to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - concepts of 'price', 'income' and 'cross-elasticities of cross-elasticities demand'. of is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

How to use formulae to calculate price, income and cross-elasticities of demand.

Use b - use formulae to calculate price, income and cross-elasticities of demand to connect the rule to the data and decision in the question.

This matters because b - use formulae to calculate price, income and cross-elasticities of demand determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - use formulae to calculate price, income and cross-elasticities of demand to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: use the formula and units given in the question, show the substitution and interpret the result; the calculation alone is not the conclusion.

Interpretation of numerical values of price elasticity of demand:; perfectly price elastic demand; price elastic demand; unitary price elastic demand; price inelastic demand; perfectly price inelastic demand.

Use c - interpretation of numerical values of price elasticity of demand: • perfectly price to connect the rule to the data and decision in the question.

This matters because c - interpretation of numerical values of price elasticity of demand: • perfectly price determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply c - interpretation of numerical values of price elasticity of demand: • perfectly price to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: c - Interpretation of numerical values of price elasticity of demand: • perfectly price is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The factors influencing price elasticity of demand:; availability of substitutes; branding; percentage of total expenditure; addictiveness of product; durability of product.

Use d - factors influencing price elasticity of demand: • availability of substitutes • to connect the rule to the data and decision in the question.

This matters because d - factors influencing price elasticity of demand: • availability of substitutes • determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply d - factors influencing price elasticity of demand: • availability of substitutes • to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: d - factors influencing price elasticity of demand: • availability of substitutes • is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

How to calculate total revenue.

Use e - calculate total revenue to connect the rule to the data and decision in the question.

This matters because e - calculate total revenue determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply e - calculate total revenue to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: e - calculate total revenue is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

How price elasticity of demand varies along a straight line demand curve.

Use f - price elasticity of demand varies along a straight line demand curve to connect the rule to the data and decision in the question.

This matters because f - price elasticity of demand varies along a straight line demand curve determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply f - price elasticity of demand varies along a straight line demand curve to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: f - price elasticity of demand varies along a straight line demand curve is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The relationship between price elasticity of demand and total cross-elasticities revenue. of demand.

Use g - relationship between price elasticity of demand and total cross-elasticities revenue. to connect the rule to the data and decision in the question.

This matters because g - relationship between price elasticity of demand and total cross-elasticities revenue. determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply g - relationship between price elasticity of demand and total cross-elasticities revenue. to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: g - relationship between price elasticity of demand and total cross-elasticities revenue. is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Interpretation of numerical values of income elasticity of (continued) demand:; perfectly income elastic demand; income elastic demand; income inelastic demand; perfectly income inelastic demand; the distinction between normal goods and inferior goods.

Use h - interpretation of numerical values of income elasticity of (continued) demand: • to connect the rule to the data and decision in the question.

This matters because h - interpretation of numerical values of income elasticity of (continued) demand: • determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply h - interpretation of numerical values of income elasticity of (continued) demand: • to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: h - Interpretation of numerical values of income elasticity of (continued) demand: • is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Interpretation of numerical values of cross elasticity of demand. Significance for the degree to which goods are:; substitutes; complements; unrelated.

Use i - interpretation of numerical values of cross elasticity of demand. significance for the to connect the rule to the data and decision in the question.

This matters because i - interpretation of numerical values of cross elasticity of demand. significance for the determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply i - interpretation of numerical values of cross elasticity of demand. significance for the to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: i - Interpretation of numerical values of cross elasticity of demand. Significance for the is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The significance of price, income and cross-elasticities of demand for firms, consumers and the government.

Use j - significance of price, income and cross-elasticities of demand for firms, consumers and to connect the rule to the data and decision in the question.

This matters because j - significance of price, income and cross-elasticities of demand for firms, consumers and determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply j - significance of price, income and cross-elasticities of demand for firms, consumers and to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: j - significance of price, income and cross-elasticities of demand for firms, consumers and is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The concept of 'supply'.

Use a - concept of 'supply' to connect the rule to the data and decision in the question.

This matters because a - concept of 'supply' determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - concept of 'supply' to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - concept of 'supply' is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The distinction between movements along a supply curve and shifts of a supply curve.

Use b - distinction between movements along a supply curve and shifts of a supply curve to connect the rule to the data and decision in the question.

This matters because b - distinction between movements along a supply curve and shifts of a supply curve determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - distinction between movements along a supply curve and shifts of a supply curve to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - distinction between movements along a supply curve and shifts of a supply curve is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Factors that may cause a shift in the supply curve:; changes in the costs of production; the introduction of new technology; indirect taxes (specific and ad valorem); government subsidies; natural disasters.

Use c - factors that may cause a shift in the supply curve: • changes in the costs of to connect the rule to the data and decision in the question.

This matters because c - factors that may cause a shift in the supply curve: • changes in the costs of determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply c - factors that may cause a shift in the supply curve: • changes in the costs of to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: c - Factors that may cause a shift in the supply curve: • changes in the costs of is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The concept of 'price elasticity of supply'. supply.

Use a - concept of 'price elasticity of supply'. supply to connect the rule to the data and decision in the question.

This matters because a - concept of 'price elasticity of supply'. supply determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - concept of 'price elasticity of supply'. supply to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - concept of 'price elasticity of supply'. supply is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Calculation and interpretation of numerical values of price elasticity of supply:; perfectly elastic supply; elastic supply; unitary elastic supply; inelastic supply; perfectly inelastic supply.

Use b - calculation and interpretation of numerical values of price elasticity of supply: • to connect the rule to the data and decision in the question.

This matters because b - calculation and interpretation of numerical values of price elasticity of supply: • determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - calculation and interpretation of numerical values of price elasticity of supply: • to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - Calculation and interpretation of numerical values of price elasticity of supply: • is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Factors that influence price elasticity of supply:; the time period; availability of stock/perishability; mobility of factors of production; legal constraints; capacity.

Use c - factors that influence price elasticity of supply: • the time period • availability of to connect the rule to the data and decision in the question.

This matters because c - factors that influence price elasticity of supply: • the time period • availability of determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply c - factors that influence price elasticity of supply: • the time period • availability of to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: c - Factors that influence price elasticity of supply: • the time period • availability of is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The distinction between the short run and long run in economics and its significance for price elasticity of supply.

Use d - distinction between the short run and long run in economics and its significance for to connect the rule to the data and decision in the question.

This matters because d - distinction between the short run and long run in economics and its significance for determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply d - distinction between the short run and long run in economics and its significance for to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: d - distinction between the short run and long run in economics and its significance for is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Equilibrium price and quantity, and how they are determined. market.

Use a - equilibrium price and quantity, and how they are determined. market to connect the rule to the data and decision in the question.

This matters because a - equilibrium price and quantity, and how they are determined. market determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - equilibrium price and quantity, and how they are determined. market to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - Equilibrium price and quantity, and how they are determined. market is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Causes of changes in the equilibrium price and quantity as a equilibrium result of shifts in demand and supply curves.

Use b - causes of changes in the equilibrium price and quantity as a equilibrium result of to connect the rule to the data and decision in the question.

This matters because b - causes of changes in the equilibrium price and quantity as a equilibrium result of determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - causes of changes in the equilibrium price and quantity as a equilibrium result of to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - Causes of changes in the equilibrium price and quantity as a equilibrium result of is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The operation of market forces to eliminate excess demand and excess supply.

Use c - operation of market forces to eliminate excess demand and excess supply to connect the rule to the data and decision in the question.

This matters because c - operation of market forces to eliminate excess demand and excess supply determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply c - operation of market forces to eliminate excess demand and excess supply to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: c - operation of market forces to eliminate excess demand and excess supply is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The distinction between consumer and producer surplus. producer surplus.

Use a - distinction between consumer and producer surplus. producer surplus to connect the rule to the data and decision in the question.

This matters because a - distinction between consumer and producer surplus. producer surplus determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - distinction between consumer and producer surplus. producer surplus to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - distinction between consumer and producer surplus. producer surplus is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

How changes in demand or supply might affect consumer and producer surplus.

Use b - changes in demand or supply might affect consumer and producer surplus to connect the rule to the data and decision in the question.

This matters because b - changes in demand or supply might affect consumer and producer surplus determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - changes in demand or supply might affect consumer and producer surplus to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - changes in demand or supply might affect consumer and producer surplus is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The rationing, incentive and signalling functions of the price price mechanism mechanism for allocating scarce resources.

Use a - rationing, incentive and signalling functions of the price price mechanism mechanism to connect the rule to the data and decision in the question.

This matters because a - rationing, incentive and signalling functions of the price price mechanism mechanism determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - rationing, incentive and signalling functions of the price price mechanism mechanism to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - rationing, incentive and signalling functions of the price price mechanism mechanism is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The price mechanism in the context of different types of markets, including local, national and global markets.

Use b - price mechanism in the context of different types of markets, including local, national to connect the rule to the data and decision in the question.

This matters because b - price mechanism in the context of different types of markets, including local, national determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - price mechanism in the context of different types of markets, including local, national to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - price mechanism in the context of different types of markets, including local, national is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The impact of indirect taxes on consumers, producers and the subsidies government.

Use a - impact of indirect taxes on consumers, producers and the subsidies government to connect the rule to the data and decision in the question.

This matters because a - impact of indirect taxes on consumers, producers and the subsidies government determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - impact of indirect taxes on consumers, producers and the subsidies government to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - impact of indirect taxes on consumers, producers and the subsidies government is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The incidence of indirect taxes on consumers and producers.

Use b - incidence of indirect taxes on consumers and producers to connect the rule to the data and decision in the question.

This matters because b - incidence of indirect taxes on consumers and producers determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - incidence of indirect taxes on consumers and producers to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - incidence of indirect taxes on consumers and producers is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The impact of subsidies on consumers, producers and the government.

Use c - impact of subsidies on consumers, producers and the government to connect the rule to the data and decision in the question.

This matters because c - impact of subsidies on consumers, producers and the government determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply c - impact of subsidies on consumers, producers and the government to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: c - impact of subsidies on consumers, producers and the government is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The incidence of subsidies on consumers and producers.

Use d - incidence of subsidies on consumers and producers to connect the rule to the data and decision in the question.

This matters because d - incidence of subsidies on consumers and producers determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply d - incidence of subsidies on consumers and producers to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: d - incidence of subsidies on consumers and producers is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Why market failure occurs: too much or too little of a good is failure produced and/or consumed compared to the socially optimal level of output.

Use a - why market failure occurs: too much or too little of a good is failure produced and/or to connect the rule to the data and decision in the question.

This matters because a - why market failure occurs: too much or too little of a good is failure produced and/or determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - why market failure occurs: too much or too little of a good is failure produced and/or to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - Why market failure occurs: too much or too little of a good is failure produced and/or is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Sources of market failure:; externalities; the free-rider problem; non-provision of public goods; imperfect market information; moral hazard; speculation and market bubbles.

Use b - sources of market failure: • externalities • the free-rider problem; non-provision of to connect the rule to the data and decision in the question.

This matters because b - sources of market failure: • externalities • the free-rider problem; non-provision of determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - sources of market failure: • externalities • the free-rider problem; non-provision of to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - Sources of market failure: • externalities • the free-rider problem; non-provision of is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The distinction between private benefits, external benefits and negative social benefits. externalities.

Use a - distinction between private benefits, external benefits and negative social benefits. to connect the rule to the data and decision in the question.

This matters because a - distinction between private benefits, external benefits and negative social benefits. determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - distinction between private benefits, external benefits and negative social benefits. to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - distinction between private benefits, external benefits and negative social benefits. is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The distinction between private costs, external costs and social costs.

Use b - distinction between private costs, external costs and social costs to connect the rule to the data and decision in the question.

This matters because b - distinction between private costs, external costs and social costs determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - distinction between private costs, external costs and social costs to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - distinction between private costs, external costs and social costs is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The distinction between:; external benefits of production; external benefits of consumption; external costs of production; external costs of consumption.

Use c - distinction between: • external benefits of production • external benefits of to connect the rule to the data and decision in the question.

This matters because c - distinction between: • external benefits of production • external benefits of determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply c - distinction between: • external benefits of production • external benefits of to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: c - distinction between: • external benefits of production • external benefits of is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The use of diagrams, using marginal analysis, to illustrate:; the external benefits from consumption; the external costs from production; the distinction between the market and social optimum positions; identification of the welfare loss or gain areas.

Use d - use of diagrams, using marginal analysis, to illustrate: • the external benefits from to connect the rule to the data and decision in the question.

This matters because d - use of diagrams, using marginal analysis, to illustrate: • the external benefits from determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply d - use of diagrams, using marginal analysis, to illustrate: • the external benefits from to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: d - use of diagrams, using marginal analysis, to illustrate: • the external benefits from is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The impact of externalities in various contexts:; transport; health; education; environment; financial.

Use e - impact of externalities in various contexts: • transport • health • education • to connect the rule to the data and decision in the question.

This matters because e - impact of externalities in various contexts: • transport • health • education • determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply e - impact of externalities in various contexts: • transport • health • education • to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: e - impact of externalities in various contexts: • transport • health • education • is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The distinction between public and private goods: public goods; private goods: rival and excludable; public goods: non-rival and non-excludable.

Use a - distinction between public and private goods: public goods • private goods: rival and to connect the rule to the data and decision in the question.

This matters because a - distinction between public and private goods: public goods • private goods: rival and determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - distinction between public and private goods: public goods • private goods: rival and to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - distinction between public and private goods: public goods • private goods: rival and is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Why public goods may not be provided by the private sector making reference to the free-rider problem.

Use b - why public goods may not be provided by the private sector making reference to the to connect the rule to the data and decision in the question.

This matters because b - why public goods may not be provided by the private sector making reference to the determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - why public goods may not be provided by the private sector making reference to the to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - Why public goods may not be provided by the private sector making reference to the is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The distinction between symmetric and asymmetric information. information.

Use a - distinction between symmetric and asymmetric information. information to connect the rule to the data and decision in the question.

This matters because a - distinction between symmetric and asymmetric information. information determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - distinction between symmetric and asymmetric information. information to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - distinction between symmetric and asymmetric information. information is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The significance of information gaps.

Use b - significance of information gaps to connect the rule to the data and decision in the question.

This matters because b - significance of information gaps determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - significance of information gaps to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - significance of information gaps is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

How imperfect market information may lead to a misallocation of resources in various contexts:; healthcare; education; pensions; insurance.

Use c - imperfect market information may lead to a misallocation of resources in various to connect the rule to the data and decision in the question.

This matters because c - imperfect market information may lead to a misallocation of resources in various determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply c - imperfect market information may lead to a misallocation of resources in various to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: c - imperfect market information may lead to a misallocation of resources in various is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

How moral hazard can occur.

Use a - moral hazard can occur to connect the rule to the data and decision in the question.

This matters because a - moral hazard can occur determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - moral hazard can occur to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - moral hazard can occur is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The impact of moral hazard on consumers, producers, workers and governments in:; insurance; banking.

Use b - impact of moral hazard on consumers, producers, workers and governments in: • insurance to connect the rule to the data and decision in the question.

This matters because b - impact of moral hazard on consumers, producers, workers and governments in: • insurance determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - impact of moral hazard on consumers, producers, workers and governments in: • insurance to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - impact of moral hazard on consumers, producers, workers and governments in: • insurance is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

How market bubbles may arise. market bubbles.

Use a - market bubbles may arise. market bubbles to connect the rule to the data and decision in the question.

This matters because a - market bubbles may arise. market bubbles determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - market bubbles may arise. market bubbles to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - market bubbles may arise. market bubbles is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The impact of market bubbles on consumers, producers, workers and governments in various contexts:; housing; stocks and shares.

Use b - impact of market bubbles on consumers, producers, workers and governments in various to connect the rule to the data and decision in the question.

This matters because b - impact of market bubbles on consumers, producers, workers and governments in various determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - impact of market bubbles on consumers, producers, workers and governments in various to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - impact of market bubbles on consumers, producers, workers and governments in various is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

The purpose of government intervention, including reference to methods of market failure. government.

Use a - purpose of government intervention, including reference to methods of market failure. to connect the rule to the data and decision in the question.

This matters because a - purpose of government intervention, including reference to methods of market failure. determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - purpose of government intervention, including reference to methods of market failure. to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - purpose of government intervention, including reference to methods of market failure. is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Methods of intervention: intervention; indirect taxation (ad valorem and specific); subsidies; maximum and minimum (guaranteed) prices.; tradeable pollution permits; extension of property rights; state provision; regulation; provision of information.

Use b - methods of intervention: intervention • indirect taxation (ad valorem and specific) • to connect the rule to the data and decision in the question.

This matters because b - methods of intervention: intervention • indirect taxation (ad valorem and specific) • determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - methods of intervention: intervention • indirect taxation (ad valorem and specific) • to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - Methods of intervention: intervention • indirect taxation (ad valorem and specific) • is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Contexts in which governments may intervene:; health; housing; education; transport; environment; energy; agriculture; commodities.

Use c - contexts in which governments may intervene: • health • housing • education • transport to connect the rule to the data and decision in the question.

This matters because c - contexts in which governments may intervene: • health • housing • education • transport determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply c - contexts in which governments may intervene: • health • housing • education • transport to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: c - Contexts in which governments may intervene: • health • housing • education • transport is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

'Government failure' as intervention that results in a net welfare failure loss.

Use a - 'government failure' as intervention that results in a net welfare failure loss to connect the rule to the data and decision in the question.

This matters because a - 'government failure' as intervention that results in a net welfare failure loss determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - 'government failure' as intervention that results in a net welfare failure loss to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - 'Government failure' as intervention that results in a net welfare failure loss is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Causes of government failure include information gaps, lack of incentives, unintended consequences, excessive administrative costs and moral hazard.

Use b - causes of government failure to connect the rule to the data and decision in the question.

This matters because b - causes of government failure determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - causes of government failure to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - Causes of government failure is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.