SHS 2 Economics
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TOPICS
Price theory (Demand Analysis)
- Price and value
- Importance of prices
- Definition of demand
- Difference between demand, wants and effective demand
- Classification of demand (individual/household, market/aggregate demand)
- Law of demand
- Relationship between price and quantity (Demand schedule, demand curve and demand function)
- Nature and characteristics of normal demand curve
- Reasons behind the download sloping demand curve
- Factors affecting demand
- Abnormal/ exceptional demand and curve
- Reasons/situations for abnormal demand curves
- Types of demand (competitive, joint, derived and composite)
- Change in demand and change in quantity demanded
- Factors affecting changes in demand
- Revision question
Elasticity of demand
- Definition of elasticity of demand
- classification of elasticity of demand (price elasticity of demand, cross elasticity of demand, income elasticity of demand )
- price elasticity of demand
- cross elasticity of demand
- income elasticity of demand
Supply analysis
- definition of supply
- classification of supply
- law of supply
- relationship between price and quantity supplied (supply schedule, supply curve and supply function)
- changes in supply and changes in quantity supply
- types of supply
- factors affecting supply
- exceptional supply curve
- revision questions
Elasticity of supply
- definition of elasticity of supply
- types of elasticity of supply
- importance
Theory of price determination
- Concept of market
- Price determination under free and regulated markets
- Price determination in a free market
- Equilibrium price and quantity in the product and factor markets
- Definition of equilibrium price and quantity
- Price mechanism(price system)
- Functions/advantages of price mechanism
- Disadvantages of price mechanism
- How market price is determined in a market economy
- Tabular, graphical and functional determination
- Effects of tax on equilibrium price and quantity
- Effects of subsidy on equilibrium price and quantity
- Price determination in a regulated market
- Reasons for price control
- Types of price controls/regulations (maximum, minimum and minimum wage)
- Maximum price control
- Effects of price ceiling
- Reasons/importance of price ceiling
- How to make price ceiling policy effective
- Minimum price control
- Effects of minimum price control
- Reasons/importance of minimum price control
- How to price floor policy effective
- Minimum wage legislation
- Reasons/importance of minimum wage effective
- Effects of minimum wage
- How to make minimum wage policy wage
- General effects of government price legislation
- Review questions
Theory of consumer behavior
- Introduction
- Concept of utility
- Terms relating to the theory of utility (marginal utility, total utility and average utility)
- The law of diminishing marginal utility
- Relationship between marginal utility, average utility and total utility
- Relation between marginal utility, price and quantity demanded of a commodity
- Theories used in explaining the behavior of a consumers
- The cardinal utility theory
- Analysis marginal utility theory
- Equilibrium of consumer or utility maximization
- Conditions for determining consumer equilibrium (utility maximization)
- Paradox of value
- Weakness/limitations/criticism of marginal utility theory
- Consumer surplus analysis
- Substitution and income effects
- Example and revision questions
Theory of production
- Concept of production
- Definition
- Examples of production
- Production efficiency
- Technical efficiency
- Economic efficiency
- Time periods in production
- Production analysis in the short-run
- Law of diminishing marginal returns (law of variable proportion)
- Assumptions of the law of diminishing marginal returns
- Stages of production
- Relationship involving MP, TP and AP
- Economic importance of the law of diminishing marginal returns
- Long-run production theory
- Law of returns to scale
- Economics of scale
- Scale of production
- Labour intensive method of production
- Capital intensive of production
- Advantages and disadvantages of capital intensive method of production
- Worked examples
- Revision questions
Theory of cost
- Meaning of cost of production
- Definition of cost
- Terminologies used in cost theory
- Economist’s and accountant’s view cost
- Short-run cost concepts and their constructions (curves)
- Relationship of various cost curves
- Why the short-run marginal cost curve is U-shaped
- The long-run average cost (LRAC) analysis
- Derivation of the average long-run average cost curve
- Why the long-run average cost curve is U-shaped
- Revision questions
The theory of the firm or market structures
- Introduction
- Difference a firm and an industry
- Criteria for distinguishing market structures
- Types of market structures
- Some important concepts
- Meaning of term equilibrium
- Determination of profit maximization output level
- Profit and types of profit
- Perfect competition
- Characteristics of perfect competition
- Determination of price and output under perfect competition
- Short-run equilibrium of perfectly competitive firm
- Long-run equilibrium
- Monopoly
- Relevant previous knowledge
- Definition
- Characteristics of a monopoly firm
- Difference between monopoly and monopolist
- Sources of monopoly power
- The power of the monopoly
- Why government sometimes promote monopoly power
- Demand and revenue concepts
- The demand curve under monopoly
- Definition and relationships
- Equilibrium analysis
- Short run equilibrium analysis
- The state or the government can control monopoly power
- Long-run equilibrium analysis
- The relationship between price, marginal cost and average cost
- Terms relating to monopoly analysis
- Consumer sovereignty
- Price discrimination
- Types of price description
- Trial questions
Course Features
- Lectures 29
- Quizzes 1
- Skill level SHS 2
- Language English
- Students 130
- Assessments Yes
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PRICE THEORY
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ELASTICITY OF DEMAND
-
THE THEORY OF CONSUMER BEHAVIOR
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THE THEORY OF PRODUCTION
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THE THEORY OF COST AND REVENUE
-
THE THEORY OF THE FIRM
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The theory of the firm or market structures