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AQA A-level Economics

Individuals, firms, markets and market failure (4.1)

The Ceteris modules for AQA A-level economics, Individuals, firms, markets and market failure (4.1), listed under each specification section. Each module teaches one idea, with questions through the page.

4.1.1 Economic methodology and the economic problem

Scarcity and choiceSay why every choice means giving something upConcept · 7 min · FreeOpportunity costSay what a choice costs, not just what it costs in moneyConcept · 6 minThe production possibility frontierRead a PPF and say what a point inside it meansDiagram · 7 minPositive and normative statementsTell a positive statement from a normative oneTell them apart · 6 minFactors of productionSort an input into the right factor of productionTell them apart · 6 min

4.1.2 Individual economic decision making

Do people actually decide rationally?Weigh the case each way on the rational-choice assumptionDebate · 7 minAsymmetric informationSay what asymmetric information is and how it breaks a marketConcept · 6 min

4.1.3 Price determination in a competitive market

DemandTell demand from quantity demandedConcept · 6 min · FreeSupplyTell supply from quantity suppliedConcept · 6 minHow a market finds its priceExplain how a market moves to its equilibrium priceHow it works · 6 minA shift in demandTell a shift in demand from a movement along the curveDiagram · 7 minA shift in supplyTell a shift in supply from a movement along the curveDiagram · 8 minElastic and inelastic demandTell elastic demand from inelastic demandTell them apart · 6 minCalculating price elasticity of demandWork out a price elasticity of demand from two percentagesCalculation · 6 minPrice elasticity of supplySay what makes a supply elastic or inelasticConcept · 7 minIncome and cross elasticityTell a normal good from an inferior one, and a substitute from a complementTell them apart · 7 min

4.1.4 Production, costs and revenue

Specialisation and the division of labourSay what specialisation is and why it raises outputConcept · 6 minFixed and variable costsSort a cost into fixed or variableTell them apart · 6 min · FreeAverage and marginal costWork out average and marginal cost from a total cost tableCalculation · 7 minEconomies of scaleSay what economies of scale are and name their sourcesConcept · 7 minTotal, average and marginal revenueWork out the three revenue measures from a demand scheduleCalculation · 7 minNormal and supernormal profitTell normal profit from supernormal profitTell them apart · 6 min

4.1.5 Perfect competition, imperfectly competitive markets and monopoly

Consumer and producer surplusRead consumer and producer surplus off a diagramDiagram · 6 minPerfect competitionSay what makes a market perfectly competitiveConcept · 7 minHow a monopoly formsName the barriers to entry that create a monopolyConcept · 7 minMonopolistic competition and oligopolyTell the four market structures apartTell them apart · 6 minPrice discriminationSay what price discrimination is and what it needs to workConcept · 8 min

4.1.6 The labour market

The demand for labourSay why the demand for labour is derived demandConcept · 7 min · FreeThe supply of labourSay what moves the supply of labour to an occupationConcept · 7 minHow a wage is set in a competitive marketExplain how demand and supply settle a wageHow it works · 6 minWhy wages differ between jobsExplain why two jobs in one economy pay differentlyHow it works · 7 minMonopsonySay what a monopsony is and what it does to the wageConcept · 7 minDo trade unions raise wages?Weigh the case each way on union wage bargainingDebate · 6 minDoes a minimum wage cost jobs?Weigh the case each way on whether a minimum wage costs jobsDebate · 6 minDoes discrimination survive a competitive market?Weigh the case each way on labour-market discriminationDebate · 6 min

4.1.7 The distribution of income and wealth: poverty and inequality

Absolute and relative povertyTell absolute poverty from relative povertyTell them apart · 6 minThe Lorenz curve and the Gini coefficientRead inequality off a Lorenz curve and say what a Gini number meansCalculation · 7 min

4.1.8 The market mechanism, market failure and government intervention in markets

Market, command and mixed economiesTell the three ways an economy can allocate resourcesTell them apart · 7 minWhat a price does: rationing, signalling, incentiveExplain the three jobs a price does in a marketHow it works · 6 minPublic goodsTell a public good from a private oneConcept · 6 min · FreeNegative externalitiesShow why a market over-produces when there is an external costDiagram · 8 minPositive externalitiesShow why a market under-produces when there is an external benefitDiagram · 7 minMerit and demerit goodsTell a merit good from a demerit good, and both from a public goodTell them apart · 7 minAsymmetric informationSay what asymmetric information is and how it breaks a marketConcept · 6 minAn indirect tax on a diagramShow what an indirect tax does to price and quantityDiagram · 7 minSubsidiesShow what a subsidy does to price and quantityDiagram · 7 minPrice ceilings and price floorsSay what a binding ceiling or floor does to a marketDiagram · 6 minTradable pollution permitsWeigh permits against a tax as a way of cutting pollutionDebate · 6 minGovernment failureSay what government failure is and name the forms it takesConcept · 7 minIs competition policy worth it?Weigh the case each way on breaking up a large firmDebate · 6 min