Micro Economics As Level Book 3

TABLE OF CONTENTS

UNIT 1 THEORY OF CONSUMER BEHAVIOUR

CARDINAL APPROACH

Law of Diminishing Marginal Utility:

Law of Equi-marginal Utility

ORDINAL APPROACH:

Budget line

Indifference Curves

Consumer Equilibrium through the Ordinal Approach:

PAST PAPER QUESTIONS

UNIT 2 PRODUCTION AND COST

THE LAW OF DIMINISHING RETURNS (LAW OF VARIABLE PROPORTIONS):

LEAST-COST INPUTS COMBINATION IN THE LONG RUN:

ISOCOST AND ISOQUANT APPROACH:

SCALE OF PRODUCTION AND RETURNS TO SCALE:

SHORT-RUN COSTS:

RELATIONSHIP BETWEEN SHORT-RUN COSTS & LAW OF DIMINISHING RETURNS

ECONOMIES AND DISECONOMIES OF SCALE:

SMALL FIRMS:

PAST PAPER QUESTIONS

UNIT 3 RULES OF FIRM’S BEHAVIOUR

1 ECONOMIC THEORY OF PROFIT MAXIMIZATION

2 BUSINESS CONTINUITY RULES

3 TYPES OF PROFITS

PAST PAPER QUESTIONS

UNIT 4 PERFECT COMPETITION

PRICE AND OUTPUT DETERMINATION IN SHORT RUN

SHORT-RUN PRICE AND OUTPUT DETERMINATION:

Types and Determination of Profit

The Shutdown case of a perfectly competitive firm

Derivation of the supply curve of a perfectly competitive industry in the short run

PRICE AND OUTPUT DETERMINATION IN LONG RUN

IS PERFECT COMPETITION A REALISTIC MODEL?

UNIT 5 MONOPOLY

PRICE AND OUTPUT DETERMINATION IN SHORT RUN

Types of profits:(Micro Economics As Level book 3)

Types of losses

PRICE AND OUTPUT DETERMINATION IN LONG RUN

BARRIERS TO ENTRY

UNIT 6 MONOPOLISTIC COMPETITION

PRICE AND OUTPUT DETERMINATION IN SHORT RUN

PRICE AND OUTPUT DETERMINATION IN LONG RUN

UNIT 7 OLIGOPOLY

PRICE AND OUTPUT DETERMINATION IN OLIGOPOLY

Kinked Demand Curve

Price Leadership

Cartel:

Game Theory

MERGER AND INTEGRATION (MCQS ONLY)

UNIT 8 COMPARISON OF MARKET STRUCTURES

UNIT 9 OBJECTIVES, DISCRIMINATION,& CONTESTABILITY

OBJECTIVES OF FIRMS

PRICE DISCRIMINATION

CONTESTABLE MARKETS

THEORY OF EXCESS CAPACITY

PAST PAPER QUESTIONS

UNIT 10 ECONOMIC EFFICIENCY AND MARKET FAILURE

PRODUCTIVE EFFICIENCY (PE)

ALLOCATIVE EFFICIENCY (AE)

MARKET FAILURE:

1-allocation of resources:

2-allocation of resources:

3 Markets of Public Goods:

4 knowledge

5 immobility

6 termism

(Micro Economics As Level book 3)

GOVERNMENT MICROECONOMIC OBJECTIVES:

POLICIES TO CORRECT MARKET FAILURE OF NEGATIVE EXTERNALITIES AND DEMERIT GOODS

1 Taxes

2 and Regulation

3 bodies

4 in property rights

5 of Information

6 Permits

POLICIES TO CORRECT MARKET FAILURE OF POSITIVE EXTERNALITIES AND MERIT GOODS

1

2 and Regulation

3 of Information

4 Direct Provision of Goods and Services

POLICIES TO CORRECT MARKET FAILURE OF PUBLIC GOODS

POLICIES TO CORRECT THE MARKET FAILURE OF IMPERFECT MARKETS

COST-BENEFIT ANALYSIS (CBA):

ARE MONOPOLIES ALWAYS BAD FOR CONSUMERS?

PAST PAPERS QUESTIONS

UNIT 11 LABOUR MARKET

THE SUPPLY CURVE

1 Curve for an Individual Worker

2 Market Supply Curve for Labour

3 of Labour for a Perfectly Competitive Firm:

4 of Labour in a Monopsony

5 of labour with a Trade Union:

DEMAND FOR LABOUR OR MARGINAL REVENUE PRODUCT (MRP) THEORY:

WAGE DETERMINATION IN PERFECT MARKET

MONOPSONY

TRADE UNION

WAGE DIFFERENTIALS

TRANSFER EARNINGS& ECONOMIC RENT

PAST PAPER QUESTIONS

UNIT 12 INEQUALITY AND POLICIES TO REDISTRIBUTE INCOME

MEASURING INEQUALITY

1 curve

2 coefficient

3 curve

GOVERNMENT POLICIES TO REDISTRIBUTE INCOME AND WEALTH

1 benefits (transfer payments)

2 the tax system

3 policies