A2 ECONOMICS: BUSINESS ECONOMICS AND THE DISTRIBUTION OF INCOME

92 page A2 Economics Revision Guide:
Costs of production
Marginal and average costs / Law of diminishing marginal returns
Cost curve / The long run / Returns to scale / The long run cost curve
Economies of scale / External economies of scale / Minimum efficient scale
Diseconomies of scale / Revenue / Revenue curves
Formulas for calculating costs and revenues / Profit maximisation
Sales revenue maximisation / Sales volume maximisation
The divorce of ownership and control / Evaluation of business objectives
Market structures / Perfect competition
Diagrams for perfect competition / Long run equilibrium – From supernormal profit to normal profit / From loss to normal profit
Productive and allocative efficiency on a diagram / The demand and supply curve
The shutdown point / Consumer surplus
Monopoly / Origins/source of monopoly power
Evaluation of monopolies / Diagram for a monopoly firm
Comparison with perfect competition / The deadweight welfare loss diagram
Natural monopolies / Exploitation under natural monopoly
Evaluation of natural monopolies / Price discrimination
First degree price discrimination / Second degree price discrimination
Third degree price discrimination / Evaluation of price discrimination
Oligopoly / The kinked demand curve (interdependence – 1) / Collusion
Evaluation - Why do cartels fail? / Evaluation of cartels
Contestable markets / Privatisation and deregulation
Arguments for PPP / Arguments against PPP / Evaluation of privatisation
Evaluation of deregulation / Internal markets / Competition policy
Evaluation of competition policy / Industry regulators
Price regulation / Market failure
Environmental market failure / Methods of government intervention
Regulation and legislation / Taxation / Emissions trading
Property rights / Positive externalities – AS recap / Merit goods – AS recap
Demerit goods – AS recap / Public goods – AS recap / Government failure
Why does government failure occur? / Examples of government failure?
The Labour market / Marginal Revenue Productivity Theory
Elasticity of demand for labour / Supply of labour / Elasticity of supply for labour
Backward bending labour supply curve / Imperfections in the real world
Trade Unions / Monopsony / Evaluation of unions / Discrimination in the labour market
Income wealth and poverty / The Lorenz curve
Policies to tackle inequality and the uneven distribution of income and wealth
Absolute poverty / Relative poverty / The poverty trap
Evaluation / Horizontal and vertical equity / Cost Benefit Analysis
Evaluation / Market structures – Overview