The allocation of resources: how the market works; market failure
Candidates should be able to:
describe the allocation of resources in market and mixed economic systems; describe the terms primary, secondary and serivce (tertiary) sector in an economy
demonstrate the principle of equilibrium price and analyse simple market situations with changes in demand and supply
describe the causes of changes in demand and supply conditions and analyse such changes to show effects in the market
define price elasticity of demand and supply and perform simple calculations
demonstrate the usefulness of price elasticity in particular situations such as revenue changes, consumer expenditure
evaluate the merits of the market system
describe the concept of market failure and explain the reasons for its occurrence
define private and social costs and benefits and discuss conflicts of interest in relation to these costs and benefits in the short-term and long-term through studies of the following issues: