1. Introduction to Markets & Market Failure

1.1 Nature of Economics

1.1.1 Economics as a Social Science

1.1.2 Positive & Normative Economic Statements

1.1.3 The Economic Problem

1.1.4 Production Possibility Frontiers

1.1.5 Specialisation & 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 & 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 Producer & Consumer Surplus

1.2.9 Indirect Taxes and Subsidies

1.2.10 Alternative Views of Consumer Behaviour

1.3 Market Failure

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

2. The UK Economy – Performance & Policies

2.1 Measures of Economic Performance

2.1.1 Economic Growth

2.1.2 Inflation

2.1.3 Employment & Unemployment

2.1.4 Balance of Payments

2.2 Aggregate Demand (AD)

2.2.1 The Characteristics of AD

2.2.2 Consumption (C)

2.2.3 Investment (I)

2.2.4 Government Expenditure (G)

2.2.5 Net Trade (X-M)

2.3 Aggregate Supply (AS)

2.3.1 Characteristics of AS

2.3.2 Short-run AS

2.3.3 Long-run AS

2.4 National Income

2.4.1 National Income

2.4.2 Injections & Withdrawals

2.4.3 Equilibrium Levels of Real National Output

2.4.4 The Multiplier

2.5 Economic Growth

2.5.1 Causes of Growth

2.5.2 Output Gaps

2.5.3 Trade (Business) Cycle

2.5.4 The Impact of Economic Growth

2.6 Macroeconomic Objectives & Policies

2.6.1 Possible Macroeconomic Objectives

2.6.2 Demand-side Policies

2.6.3 Supply-side Policies

2.6.4 Conflicts & Trade-offs Between Objectives & Policies

3. Business Behaviour & The Labour Market

3.1 Business Growth

3.1.1 Size & Types of Firms

3.1.2 Business Growth

3.1.3 Demergers

3.2 Business Objectives

3.2.1 Business Objectives

3.3 Revenues, Costs & Profits

3.3.1 Revenue

3.3.2 Costs

3.3.3 Economies & Diseconomies of Scale

3.3.4 Normal Profits, Supernormal Profits & Losses

3.4 Market Structures

3.4.1 Efficiency

3.4.2 Perfect Competition

3.4.3 Monopolistic Competition

3.4.4 Oligopoly

3.4.5 Monopoly

3.4.6 Monopsony

3.4.7 Contestability

3.5 Labour Market

3.5.1 Demand for Labour

3.5.2 Supply of Labour

3.5.3 Wage Determination in Competitive & Non-competitive Markets

3.6 Government Intervention

3.6.1 Government Intervention

3.6.2 The Impact of Government Intervention

4. A Global Perspective

4.1 International Economics

4.1.1 Globalisation

4.1.2 Specialisation & Trade

4.1.3 Pattern of Trade

4.1.4 Terms of Trade

4.1.5 Trading Blocs & the World Trade Organisation (WTO)

4.1.6 Restrictions on Free Trade

4.1.7 Balance of Payments

4.1.8 Exchange Rates

4.1.9 International Competitiveness

4.2 Poverty & Inequality

4.2.1 Absolute & Relative Poverty

4.2.2 Inequality

4.3 Emerging & Developing Economies

4.3.1 Measures of Development

4.3.2 Factors Influencing Growth & Development

4.3.3 Strategies Influencing Growth & Development

4.4 The Financial Sector

4.4.1 Role of Financial Markets

4.4.2 Market Failure in the Financial Sector

4.4.3 Role of Central Banks

4.5 Role of the State in the Macroeconomy

4.5.1 Public Expenditure

4.5.2 Taxation

4.5.3 Public Sector Finances

4.5.4 Macroeconomic Policies in a Global Context