ECONOMICS (2281): key concepts
Chapter#1: Nature of economic problem:
 Economic problem
 Scarcity of resources
 Difference between free goods and economic goods
Chapter#2: Factors of Production:
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All four FOPS
Difference between capital and consumer goods
Mobility of the FOPS
Quantity and quality of FOPS
Chapter#3: Opportunity Cost
 Definition of opportunity cost
 Influence on consumers, workers, producers and government
Chapter#4: Production Possibility curves
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Production points
Shape of PPC curve
Movement along the PPC curve
Shift in PPC curve
Consequences of a shift in PPC
Chapter#5: Macro-economics and Micro-economics
 Definition of both macro and micro economics
 Connection between micro and macro economics
 Aims of economic agents in both macro and micro level
Chapter#6: Role of Markets in Allocating Resources
 The involvement of what, how and who to produce in decisions
 Planned economy, mixed economy and market economy
 Role of price mechanism
Chapter#7: Demand
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definition
relationship with price
types of demand
determinants of change in demand
shape of demand curve
plotting graphs of both sift in demand curve and movement in demand curve
Chapter#8: Supply
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definition
relationship with price
types of supply
determinants of change in supply
shape of supply curve
plotting graphs of both sift in supply curve and movement in supply curve
Chapter#9: Price determination
 difference between equilibrium and disequilibrium
 understanding excess supply and excess demand
Chapter#10: Price changes
 Effect of changes in demand on price
 Effect of changes in supply on price
Chapter#11: Price Elasticity of Demand
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Definition and formula of calculating PED
Degrees of PED, differences in shape of PED
Determinants of PED
Effect of changes in PED
Chapter#12: Price Elasticity of Supply
 Definition and formula of calculating PES
 Degrees of PES, differences in shape of PES
 Determinants of PES
 Effect of changes in PES
Chapter 13: Market Economic System
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Features of market economic system
Importance of competition and incentives
Types of sectors
Merits and demerits of Market Economic System
3 types of efficiency and their features
Chapter#14: Market Failure
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Nature of market failure
Types of costs and benefits
Reasons of market failure
Merit and demerit goods
Public goods and private goods
Chapter#15: Mixed Economic System
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Features of a mixed economy
Maximum and minimum price
Steps govt takes to overcome market failure
Difference between privatization and nationalization
Merits of government intervention in economy
Chpter#16: Money and Banking
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Forms of money
Functions of money
Characteristics of money
Commercial banks (definition, role, importance, aims)
Central banks (definition, role, importance, aims)
Chapter#17: Households
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Reason and influence of spending
Reason and influence of savings
Relationship between income and consumption
Reason and influence of borrowing
Chapter#18: Workers
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Definition of all types of wages
Wage factors
Nonwage factors
National minimum wage
Reasons for changes in occupation
Reasons for variation in earnings
Chapter#19: Trade Unions
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Definition of trade union
Role of trade unions in an economy
Factors influencing the strengths of trade unions
Merits and de merits of trade union membership for (workers, producers, govt)
Chapter#20: Firms
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Classifying firms in terms of sectors, ownerships, size
Small firms merits and de merits
Describing the cause of the growth of firms
Advantages and disadvantages of different types of mergers
Types of Internal and external economies of scale
Chapter#21: Firms and Production
 Influence of demand on FOPS
 Reasons for having capital/labor intensive production
 Difference between productivity and production
Chapter#22: Firms, costs, revenue and objectives
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Define and calculate 6 types of costs
Interpret and draw all diagrams of costs
Total and average revenue difference
Sales affecting revenue
List and describe objectives of the firms
Chapter#23: Market Structure
 Behavior and performance of competitive markets
 Characteristics of monopoly market
 Rise and continuity of the monopoly markets
 Behavior and performance of monopoly markets
Chapter#24: The Role of Government
 Influence on local economy
 Influence on national economy
 International role of government
Chapter#25: Macro-economic Aims of Government
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The macro-economic aims
Reasons for choosing these aims
Government’s criteria for each aim
conflicts that each aim brings
Chapter#26: Fiscal Policy
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reasons for government spending
reasons for levying taxes
types pf taxes
principles of taxation
impact of taxation on consumer, producers, workers, government and
economy
 tools of fiscal policy
 types of fiscal policy and their influence on aggregate demand and macroeconomic aims
Chapter#27: Monetary Policy
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define money supply
define and explain monetary policy
analyse measures of monetary policy
effects of monetary policy aggregate demand and macro-economic aims
Chapter#28: Supply-side Policy
 definition of supply-side policy
 supply-side policy measures and their effect on macro-economic aims
Chapter#29: Economic Growth
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definition
causes and consequences of recession
causes and consequences of economic growth
effectiveness of both fiscal, monetary and supply side policies to promote
economic growth
Chapter#30: Employment and Unemployment
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difference between employment, unemployment and full employment
causes of changes in the pattern of employment
measuring unemployment
causes and types of unemployment
consequences of unemployment
effectiveness of policies to reduce unemployment
Chapter#31: Inflation and deflation
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definition of inflation and deflation
measuring inflation and deflation
causes and consequences of inflation
effectiveness of policies to control inflation
causes and consequences of deflation
effectiveness of policies to control deflation
policy conflicts
Chapter#32: Living Standards
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indicators of living standards
advantages and disadvantages of each indicator
measuring income and wealth inequality
reasons for differences of living standards and income distribution in and
between countries
chapter#33: Poverty
 difference between absolute and relative poverty
 causes of poverty and how to measure it
 policies to reduce poverty and re distribute income
Chapter#34: Population
 factors affecting the growth of population
 reasons for different rates of growth of population in different countries
 changes in the size and structure of population
Chapter#35: Differences in economic development between countries
 nature of economic development
 causes of differences in economic development between countries
 impacts of differences in economic development between countries
Chapter#36: International Specialization
 basis of specialization at national level
 advantages and disadvantages of specialization at national level
 difference between international and internal trade
Chapter#37: Free Trade and protection
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globalization
role of MNCs
benefits of free trade
Methods of protections
Reasons and consequence of protection
Chapter#38: Foreign Exchange Rates
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Definition
Fixed exchange rate and merits and demerits of it
Floating/flexible exchange rate and merits and demerits of it
Reasons for demand and supply of currency in foreign exchange market
Causes and consequences of changes in exchange rate
International competitiveness
Chapter#39: Current Account of Balance of Payment
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Structure of current account
Causes of current account surplus and current account deficit
Consequence of current account surplus and current account deficit
Policies of achieving balance of payment stability