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Microeconomics – Year 1 ............................................................................................................... 3
Economics as a Social Science .................................................................................................................. 3
Positive and Normative Statements ........................................................................................................ 4
The Economic Problem ............................................................................................................................. 5
Specialisation and the Division of Labour................................................................................................ 6
Public Goods ........................................................................................................................................... 10
Free Market, Mixed and Command Economies .................................................................................... 13
Price, Income and Cross Elasticities of Demand .................................................................................... 17
Consumer and Producer Surplus ............................................................................................................ 23
Indirect Taxes and Subsidies .................................................................................................................. 27
Market Failure and Externalities ............................................................................................................ 35
Behavioural Economic Policies ............................................................................................................... 44
Information Gaps .................................................................................................................................... 48
Government Failure ................................................................................................................................ 53
Microeconomics – Year 2 ............................................................................................................. 58
Sizes and Types of Firms ......................................................................................................................... 58
Business Growth ..................................................................................................................................... 60
Revenue................................................................................................................................................... 64
Costs ........................................................................................................................................................ 69
Perfect Competition ............................................................................................................................... 74
Monopoly ................................................................................................................................................ 79
Monopolistic Competition...................................................................................................................... 85
Oligopoly ................................................................................................................................................. 90
Price Discrimination ................................................................................................................................ 98
Business Objectives .............................................................................................................................. 103
Monopsony ........................................................................................................................................... 108
Labour Demand..................................................................................................................................... 110
Labour Supply ....................................................................................................................................... 116
Minimum Wage .................................................................................................................................... 122
Macroeconomics – Year 1 .......................................................................................................... 129
The Circular Flow of Income ................................................................................................................. 129
Inflation ................................................................................................................................................. 133
Aggregate Demand ............................................................................................................................... 139
Aggregate Supply .................................................................................................................................. 143
The Multiplier and Output Gaps .......................................................................................................... 150
Monetary Policy .................................................................................................................................... 157
Fiscal Policy ........................................................................................................................................... 162
Supply Side Policies .............................................................................................................................. 167
Conflicts and Tradeoffs Between Objectives and Policies .................................................................. 173
Macroeconomics – Year 2 .......................................................................................................... 177
Specialisation and Trade....................................................................................................................... 177
Restrictions on Free Trade.................................................................................................................... 185
Balance of Payments ............................................................................................................................ 192
Exchange Rates ..................................................................................................................................... 199
Monetary Union.................................................................................................................................... 205
Inequality .............................................................................................................................................. 209
Factors Influencing Growth and Development ................................................................................... 214
Development Strategies Part 2: Other Strategies ............................................................................... 220
Role of Financial Markets ..................................................................................................................... 225
Market Failure in the Financial Sector ................................................................................................. 229
Financial Market Regulation ................................................................................................................ 232