Exam Weighting: About 12–15% of the total exam.

What You’ll Learn:

• Scarcity, resource allocation, and the economic problem of unlimited wants vs limited means.

• The production possibilities curve (PPC) — drawing, interpreting, and shifting.

• Calculating opportunity cost from PPC data or comparative-advantage tables.

• Absolute vs comparative advantage and the logic of specialisation and trade.

• Economic systems — market, command, mixed — and how they answer the three fundamental questions.

• The circular flow model connecting households, firms, and factor/product markets.

Exam Weighting: About 20–25% of the total exam.

What You’ll Learn:

• The law of demand — factors that shift the demand curve vs movements along it.

• The law of supply — factors that shift the supply curve vs movements along it.

• Market equilibrium — finding and interpreting price and quantity at the intersection of supply and demand.

• The effects of government intervention — price ceilings (shortages), price floors (surpluses), and their efficiency consequences.

• Elasticity — price elasticity of demand (PED), price elasticity of supply (PES), cross-price elasticity, and income elasticity.

• Consumer surplus, producer surplus, and total welfare at equilibrium.

• The impact of taxes and subsidies on equilibrium price, quantity, surplus, and deadweight loss.

Exam Weighting: About 22–25% of the total exam.

What You’ll Learn:

• Production in the short run — total product, marginal product, and diminishing marginal returns.

• Short-run cost curves — total fixed cost, total variable cost, total cost, marginal cost, average total cost, and average variable cost.

• The relationships between cost curves — why MC intersects ATC and AVC at their minimum points.

• The perfectly competitive firm: price taker, MR = P = demand curve.

• Profit maximisation in perfect competition: produce where MR = MC.

• Short-run outcomes — economic profit, loss, shutdown decision — and how to identify each graphically.

• Long-run equilibrium in perfect competition — zero economic profit, P = ATC = minimum.

Exam Weighting: About 15–22% of the total exam.

What You’ll Learn:

• The monopoly model — barriers to entry, downward-sloping demand, MR below price.

• Profit maximisation for a monopolist: produce where MR = MC, charge the demand price.

• Identifying economic profit, loss, or breakeven for a monopoly graphically.

• Deadweight loss under monopoly — why monopolies are allocatively inefficient.

• Price discrimination — types, conditions for profitability, and its welfare effects.

• Monopolistic competition — many firms, differentiated products, free entry; short-run profit and long-run zero economic profit.

• Oligopoly — interdependence, game theory basics, the prisoner's dilemma, and collusion vs. competition.

Exam Weighting: About 10–13% of the total exam.

What You’ll Learn:

• Derived demand — why firms demand resources based on the products those resources help produce.

• The labour market — wage determination under competitive conditions.

• Marginal revenue product (MRP) as the firm's demand for labour.

• Profit-maximising hiring: employ labour until MRP = wage.

• Monopsony — a single buyer of labour; lower wages, lower employment, deadweight loss.

• The market for capital and land — applying the factor market model to non-labour inputs.

• Income distribution and the functional distribution of income.

Exam Weighting: About 8–13% of the total exam.

What You’ll Learn:

• Externalities — positive and negative externalities in both production and consumption.

• The social optimum vs. private market equilibrium — how externalities cause over- or underproduction.

• Government corrections for externalities: taxes (Pigouvian), subsidies, regulations, and tradeable permits.

• Public goods — non-excludable, non-rival; the free-rider problem and why markets underprovide them.

• Common resources and the tragedy of the commons.

• Asymmetric information — moral hazard, adverse selection, and government responses.

• Income inequality — causes, measurement (Lorenz curve, Gini coefficient), and redistribution policies.