QuestionQuestionConceptConceptDocumentDocument

3. Microeconomic decision-makers

Start with Concept to understand a topic, then use Question Bank to check what you know.

7 topics · 21 learning objectives

Your progress

Sign in to see your mastery and mistakes.

  1. 3.1. Money and banking

    1. 3.1.1Money

      • forms, functions and characteristics of money

    2. 3.1.2Banking

      • role and importance of central banks • role and importance of commercial banks

  2. 3.2. Households

    1. 3.2.1

      • income • rate of interest • confidence • age • culture

  3. 3.3. Workers

    1. 3.3.1Factors affecting an individual’s choice of occupation

      • wage and non-wage factors

    2. 3.3.2Wage determination

      • influences of the demand for labour and the supply of labour • trade unions and their relative bargaining power • government policy, including national minimum wage (NMW) • drawing and interpretation of diagrams that illustrate the effects of: • changes in demand and supply in the labour market • national minimum wages

    3. 3.3.3Reasons for differences in wages

      • reasons for differences: • demand for and supply of labour • relative bargaining strengths • discrimination, e.g. male/female • government policy • how these reasons influence the wages of workers, depending on: • level of skills of workers • economic sector workers operate in: primary/secondary/tertiary • discrimination between workers, e.g. male/female • whether the worker is working in the private sector or public sector

    4. 3.3.4Mobility of labour

      • causes of changes in the occupational and geographical mobility of labour • consequences of changes in the occupational and geographical mobility of labour

    5. 3.3.5Division of labour

      • definition of division of labour (worker specialisation) • advantages and disadvantages of division of labour

  4. 3.4. Firms

    1. 3.4.1Different types of firms

      • primary/secondary/tertiary sector firms • private sector/public sector firms • advantages and disadvantages of small and large firms

    2. 3.4.2Mergers

      • definitions, examples, advantages and disadvantages of different types of mergers: horizontal, vertical and conglomerate

    3. 3.4.3Economies and diseconomies of scale

      • how internal and external economies and diseconomies of scale can affect a firm/industry as the scale of production changes • drawing and interpretation of average total cost (ATC) diagrams to illustrate economies and diseconomies of scale

  5. 3.5. Firms and production

    1. 3.5.1Demand for factors of production

      • influences to include demand for the product, the price of different factors of production, their availability and their productivity

    2. 3.5.2Labour-intensive and capital-intensive production

      • reasons for adopting the different forms of production • advantages and disadvantages of the different forms of production

    3. 3.5.3Production and productivity

      • the difference between production and productivity • influences on production and productivity • effects of changes in investment on productivity

  6. 3.6. Firms’ costs, revenue and objectives

    1. 3.6.1Definitions of costs of production

      • total cost (TC), average total cost (ATC), fixed cost (FC), average fixed cost (AFC), variable cost (VC), average variable cost (AVC)

    2. 3.6.2Calculation of costs of production

      • calculation of TC, ATC, FC, AFC, VC and AVC • drawing and interpretation of diagrams that show how changes in output affect costs of production

    3. 3.6.3Definition of revenue

      • definitions of total revenue (TR) and average revenue (AR)

    4. 3.6.4Calculation of revenue

      • calculation of TR and AR • the influence of sales on revenue

    5. 3.6.5Objectives of firms

      • survival, social welfare, profit maximisation and growth

  7. 3.7. Types of markets

    1. 3.7.1Competitive markets

      • characteristics, advantages and disadvantages of competitive markets • effect of having a high number of firms on price, quality, choice, profit Note: diagrams / perfect or imperfect competition theory are not required.

    2. 3.7.2Monopoly markets

      • characteristics, advantages and disadvantages of monopoly markets • effect of having only one firm on price, quality, choice, profit Note: diagrams are not required.