1. Nature of economics & methods
Positive vs normative & \(\text{ceteris paribus}\)
Economic models & assumptions
2. Scarcity, choice & PPF
The economic problem & opportunity cost
PPF: shifts, movement & trade-offs
3. Production, specialisation & systems
Factors of production & enterprise
Specialisation, DOL & economic systems
4. Demand & consumer choice
Law of demand & shifts in \(D\)
Rational choice & marginal analysis
5. Price elasticity of demand (\(PED\))
\(PED\) formula & total revenue test
Necessity, luxury & \(\lvert PED\rvert\) inference
6. \(YED\) & \(XED\)
\(YED\): normal, inferior, luxury
\(XED\): substitutes & complements
7. Supply & \(PES\)
Supply: law, shifts & determinants
\(PES\): formula, time & mobility
8. Equilibrium & price mechanism
Market clearing: \(P_e\), shortage & surplus
Signalling, rationing & incentive
9. Indirect taxes & subsidies
Specific indirect tax (diagram)
Subsidy: \(S\) shift & wedge intuition
10. Price floors & ceilings
Minimum (floor) prices & surpluses
Maximum (ceiling) prices & shortages
11. Surplus & market shocks
Consumer & producer surplus
\(D\)/\(S\) shocks & surplus change
12. Externalities
Negative externality (\(MSC,MSB\))
Positive externality & welfare gap
13. Public goods & information
Public goods: non-rival & non-excludable
Asymmetric info; merit & demerit goods
14. Bubbles & speculation
Market bubbles: definition & drivers
Expectations, herd behaviour & policy
15. Government intervention & failure
Methods of government intervention
Government failure