UNIT 3: BUSINESS ECONOMICS AND THE DISTRIBUTION OF INCOME
Section Content
THE FIRM: Objectives, Costs and Revenues- The objectives of firms
- The divorce of ownership from control - The law of diminishing returns and returns to scale - Fixed and variable costs, marginal, average and total costs, short-run and long-run costs - Economies and diseconomies of scale - Technological change - Total, Average and marginal revenue COMPETITIVE MARKETS- The model of perfect competition
- Competition and the efficient allocation of resources - The dynamics of competition and competitive market processes CONCENTRATED MARKETS- Monopoly and oligopoly
- Price markers and price takers - The growth of firms - Sources of monopoly power - The model of monopoly - Collusive and non-collusive oligopoly - Interdependence in oligopolistic markets - Price discrimination - Consumer and producer surplus - Contestable and non-contestable markets - Market structure, static efficiency, dynamic efficiency and resource allocation THE LABOUR MARKET- The demand for labour and marginal productivity theory
- Influences on the supply of labour to different markets - The determination of relative wage rates and levels of employment in perfectly competitive labour markets - The determination of relative wage rates and levels of employment in imperfectly competitive labour markets - The influence of trade unions in determining wages and levels of employment - The impact of the national minimum wage - Discrimination in the labour market - The distribution of income and wealth GOVERNMENT INTERVENTION- Market failure and government failure
- Competition policy - Public ownership, privatisation, regulation and deregulation of markets - Notions of equity - The problem of poverty - Government policies to alleviate poverty and to influence the distribution of income and wealth - Cost benefit analysis |
Useful Websites- 10 suggestions on how to improve the quality of exam answers
- Suggestions on better paragraph structure to help reach the highest levels of evaluation in relevant answers - Revision notes - Revision Quizzes Useful Resources
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