EDEXCEL A LEVEL ECONOMICS REVISION NOTES - FULL SPECIFICATION A STAR NOTES
THEME 1: Introduction to markets and market failure
- 1.1 Nature of economics
- 1.2 How markets work
- 1.3 Market failure
- 1.4 Government intervention
THEME 3 (MICRO)
THEME 1: Introduction to markets and market failure
THEME 3 (MICRO)
1.3.1 Types of Market Failure a) Understanding Market Failure Market failure occurs when the free market fails to allocate resources efficiently, leading to a loss of economic and social welfare. b) Types of Market Failure * Externalities – Costs or benefits affecting third parties not involved in the transaction. * Under-provision
1.1.1 Economics as a social science a) Thinking like an economist: the process of developing models in economics, including the need to make assumptions b) The use of the ceteris paribus assumption in building models Ceteris Paribus: When we assume only one variable changes and all others are
3.6.1 Government intervention a) Government intervention to control mergers * The competition and Markets Authority (CMA) is the main competition regulator in the UK. They have objectives to ensure that markets remain competitive and efficient as possible. This will ensure that consumers benefit in the form of lower prices
3.5.1 Demand for Labour * The demand curve for labour shows the quantity of labour that employers would wish to hire at each possible wage rate. * When firms want to hire workers/ demand workers it is because they need them to make the goods that are demanded by customers.