CAPE Economics Unit 1 study plan

Define scarcity, opportunity cost, and the production possibility frontier, and sketch a PPF showing shifts versus movements along the curve

Distinguish a movement along a demand curve from a shift in demand, and list at least five non-price determinants of demand

Construct a demand schedule and demand curve from given price-quantity data and state the law of demand in your own words

Explain the difference between a normal good and an inferior good, and between a substitute and a complement, with one Caribbean-relevant example each

Derive a supply schedule and curve and list the non-price determinants of supply

Calculate equilibrium price and quantity algebraically from paired linear demand and supply equations

Predict the effect of simultaneous demand and supply shifts on equilibrium price and quantity, and show each case on a diagram

Explain how a price ceiling and a price floor create shortages and surpluses, and identify who gains and loses in each case

Compute price elasticity of demand using both the point formula and the midpoint formula, and classify results as elastic, inelastic, or unit elastic

Relate elasticity to total revenue and demonstrate the link numerically with a worked schedule

Compute income elasticity and cross elasticity, and use the signs to classify goods

Compute price elasticity of supply and explain how time period affects it

Apply elasticity to a policy question such as taxing a good with inelastic demand

Define market structure and compare perfect competition, monopolistic competition, oligopoly, and monopoly on number of firms, product type, entry barriers, and price-setting power

Draw and interpret short-run and long-run equilibrium diagrams for a perfectly competitive firm and industry

Explain why a perfectly competitive firm earns only normal profit in long run equilibrium

Distinguish allocative and productive efficiency and state whether each market structure achieves them

Explain sources of monopoly power and illustrate the profit-maximising output where marginal revenue equals marginal cost

Show on a diagram how a monopolist restricts output and charges a higher price than a competitive market, and identify the deadweight loss area

Describe characteristics of oligopoly including interdependence, and explain price rigidity with reference to the kinked demand curve

Evaluate whether monopoly is always harmful, citing natural monopoly and economies of scale

Define market failure and distinguish it from government failure

Explain negative and positive externalities in production and consumption using diagrams that show the divergence between private and social cost or benefit

Explain public goods using the characteristics of non-rivalry and non-excludability, and why the free rider problem causes underprovision

Explain asymmetric information and merit and demerit goods as sources of market failure

Evaluate taxes, subsidies, regulation, tradable permits, and direct provision as remedies for market failure, stating one strength and one limitation of each

Explain how a Pigouvian tax can internalise an externality and show the effect on a diagram

Assess the problem of determining the correct size of a tax or subsidy when information is imperfect

Identify examples of government failure such as unintended consequences and administrative cost

Explain the marginal productivity theory of demand for labour and derive an individual firm's demand curve for labour

Explain how wage rates are determined in a competitive labour market and show the effect of a minimum wage on a diagram

Distinguish transfer earnings from economic rent and apply the concept to a named occupation

Explain causes of wage differentials including skill, trade union power, and labour market imperfections

Evaluate arguments for and against government redistribution through progressive taxation and transfers