Knowledge Map - Microeconomics

Block Topic AP IB A Level

Scarcity, choice and opportunity cost
Markets and Competition Scarcity The nature of markets
Positive and normative statements
The law of demand
The demand curve
Demand The non-price determinants of demand (factors that change
Demand and Demand Curve Demand and supply curves
Changes in Factor Demand demand or shift the demand curve)
Movements along and shifts of the demand curve
Linear demand functions (equations), demand schedules and graphs
The law of supply
The supply curve
Supply The non-price determinants of supply (factors that change supply
Supply and Supply Curve Demand and supply curves
Changes in Factor Supply or shift the supply curve)
Movements along and shifts of the supply curve
Linear supply functions, equations and graphs
Market Equilibrium and Consumer and Producer Surplus Equilibrium and changes to equilibrium
Interaction of demand and supply
Equilibrium (Comparative Static Analysis) Market Equilibrium, Disequilibrium and Changes in Calculating and illustrating equilibrium using linear equations
Market equilibrium and disequilibrium
Equilibrium Resource allocation
How Market Price elasticity of demand and its determinants
Works Applications of price elasticity of demand
Cross price elasticity of demand and its determinants
Price Elasticity of Demand Price elasticity, income elasticity and cross-
Applications of cross price elasticity of demand
Elasticity and its Application Price Elasticity of Supply elasticities of demand
Income elasticity of demand and its determinants
Other Elasticities Price elasticity of supply
Applications of income elasticity of demand
Price elasticity of supply and its determinants
Applications of price elasticity of supply
Price ceilings (maximum prices): rationale, consequences and
examples
Controls on Prices (Ceiling and Floor) Maximum and minimum prices
Price floors (minimum prices): rationale, consequences and
examples
Consumer surplus
Consumer Surplus and Producer Surplus Market Equilibrium and Consumer and Producer Surplus Consumer and producer surplus
Producer surplus
Taxes (direct and indirect)
Subsidies
Market Efficiency, Market Failure
Socially Efficient and Inefficient Market Outcomes Market failure as a failure to allocate resources efficiently Transfer payments
and Deadweight Loss
Direct provision of goods and services
Nationalisation and privatisation
Efficient resource allocation
Resource Allocation and Economic Systems The meaning of externalities
Externalities and market failure
Socially Efficient and Inefficient Market Outcomes Negative externalities of production and consumption
Externalities and Market Inefficiency Policies to achieve efficient resource allocation and
Cost-Benefit Analysis Positive externalities of production and consumption
correct market failure
Externalities Asymmetric information
Social costs and benefits; cost-benefit analysis
The Economics of Public Goods and Common Resources Public and Private Goods Common access resources and the threat to sustainability Classification of goods and services
Public Sector Specific (fixed amount) taxes and ad valorem (percentage) taxes and
Taxes and Equity & Taxes and Efficiency their impact on markets
Tax incidence and price elasticity of demand and supply
The Effects of Government Intervention in Markets
Government Intervention The Effects of Government Intervention in Different
Market Structures
Factors of production
Production Possibilities Production Possibilities Curve Production in the short run: the law of diminishing returns
Production possibility curves
The Production Function Costs of production: economic costs Resource allocation in different economic systems
The Cost of Production
Short-Run Production Costs Costs of production in the short run and issues of transition
Firm Behavior and Long-Run Production Costs
the Organization Production in the long run: returns to scaleCosts of production in Types of cost, revenue and profit, short-run and
Long-run Cost Firms’ Short-Run Decisions to Produce and Long-Run
of Industry the long run long-run production
Decisions to Enter or Exit a Market
Total revenue, average revenue and marginal revenue
Types of Profit Economic profit (sometimes known as abnormal profit) and normal Types of cost, revenue and profit, short-run and
Profit Maximization of the Firm
Profit-Maximizing Behavior in Perfectly profit (zero economic profit occurring at the break- even point) long-run production
Profit maximization
Assumptions of the model
Revenue curves
Introduction of Competitive Market Perfect Competition Profit maximization in the short run Different market structures
Profit maximization in the long run
Efficiency
Assumptions of the model
Barriers to entry
Revenue curves
Natural monopoly
Introduction of Monopoly Monopoly Monopoly and efficiency Different market structures
Policies to regulate monopoly power
The advantages and disadvantages of monopoly compared with
perfect competition
Price discrimination
Market Structure
Abuse of monopoly power
Assumptions of the model
Revenue curves
Profit maximization in the short run
Introduction of Monopolistic Competition Monopolistic Competition Profit maximization in the long run Different market structures
Non-price competition
Monopolistic competition and efficiency
Monopolistic competition compared with perfect competition and
monopoly
Assumptions of the model
Open/formal collusion
Introduction of Oligopoly Oligopoly and Game Theory Tacit/informal collusion Different market structures
Non-collusive oligopoly
Game theory

Demand and Supply of Labor Introduction to Factor Market The labour market

Changes in the Labor Market Equilibrium

Economics of Profit-Maximizing Behavior in Perfectly Competitive
Equilibrium in the Labor Market Factor Markets The labour market
Labor Markets
Monopsonistic Markets

Earnings and Discrimination Factor Markets The labour market

Constraints, Preference and Optimization Marginal Analysis and Consumer Choice Rational consumer choice Consumer behaviour

Theory of
Consumer Choice Behavioural economics—limitations of the assumptions of rational
Asymmetric Information and Behavioral consumer choice Aspects of behavioural economic theory
Economics Behavioural economics in action Behavioural economics and economic policy
Asymmetric information
Knowledge Map - Macroeconomics
Block Topic AP IB A Level
The Economy’s Income and Expenditure The circular flow of income model The circular flow of income
The Circular Flow and GDP Measures of economic activity: gross domestic product (GDP), and gross national product (GNP) or gross
Real v. Nominal GDP national income (GNI)
Economic growth, economic development and sustainability
GDP and Economic Growth Limitations of GDP The meaning of economic growth
National income statistics
Measuring of a Economic Growth Causes of economic growth
Nation’s Income and the Public Policy and Economic Growth Consequences of economic growth
Cost of Living The meaning of inflation, disinflation and deflation
Consequences of inflation
Price Indices and Inflation Inflation
CPI and Inflation Consequences of deflation
Costs of Inflation Policies to correct inflation and deflation
Types and causes of inflation
Possible relationships between unemployment and inflation
The meaning of equity in the distribution of income
Distribution of Income Inequality Indicators of income equality/inequality
The Real Economy
Poverty
in the Long-run
Market and Walfare The meaning of unemployment
Labour market forces and government intervention
Unemployment Unemployment Consequences of unemployment
Employment/unemployment
Types and causes of unemployment
Money supply (theory)
IS - LM Model Multipliers
The demand for money and interest rate determination
The AD curve
Aggregate Demand (AD)
Aggregate Demand and its Curve The components of AD Aggregate Demand (AD) and Aggregate Supply (AS) analysis
Equilibrium in the Aggregate Demand– Aggregate Supply (AD–AS) Model
The determinants of AD or causes of shifts in the AD curve
Short-run Economic
Short-Run Aggregate Supply (SRAS)
Fluctuations The meaning of aggregate supply
Long-Run Aggregate Supply (LRAS)
Aggregate Supply and its Curve Alternative views of aggregate supply Aggregate Demand (AD) and Aggregate Supply (AS) analysis
Changes in the AD–AS Model in the Short Run
Shifting the aggregate supply curve over the long term
Equilibrium in the Aggregate Demand– Aggregate Supply (AD–AS) Model
Economic Fluctuations Business Cycles Short-term fluctuations and long-term trend
The Phillips Curve The Phillips Curve Inter-connectedness of problems
Sources of government revenue
Fiscal Policy
Types of government expenditures
Fiscal and Monetary Policy Actions in the Short Run Types of policy: fiscal policy, monetary policy, and supply side policy
Fiscal Policy Fiscal policy and short-term demand management
Government Deficits and the National Debt Effectiveness of policy options to meet all macroeconomic objectives
Fiscal policy and its impact on potential output
Crowding Out
Evaluation of fiscal policy
The Money Market
Definition, Measurement, and Functions of Money
Interest rate determination and the role of a central bank
Banking and the Expansion of the Money Supply
Monetary policy and short-term demand management Types of policy: fiscal policy, monetary policy, and supply side policy
Monetary Policy The Loanable Funds Market
Monetary policy and inflation targeting Effectiveness of policy options to meet all macroeconomic objectives
Monetary Policy
Evaluation of monetary policy
Macroeconomics policy Money Growth and Inflation
Fiscal and Monetary Policy Actions in the Short Run
Supply-side policies and the economy
Investment in human capital
Investment in new technology
Investment in infrastructure
Types of policy: fiscal policy, monetary policy, and supply side policy
Supply Side Policy Industrial policies
Effectiveness of policy options to meet all macroeconomic objectives
Policies to encourage competition
Labour market reforms
Incentive-related policies
The strengths and weaknesses of supply- side policies
Knowledge Map - International Economics and Current Event

Block Topic AP IB A Level

The meaning of the terms of trade
Measurement
Terms The terms of trade
Causes of changes in the terms of trade
Consequences of changes in the terms of trade
Comparative Advantage and Trade
The benefits of trade
International trade Comparative Advantage and Gains from Trade Principles of absolute and comparative advantage
Absolute and comparative advantage
International Trade and Public Policy
International Conditions on the Foreign Exchange Market Types of trade protection
Restrictions on free trade Protectionism
Trading Changes in the Foreign Exchange Market and Net Exports Arguments for and against trade protection (arguments against and for free trade)
The meaning of the balance of payments
The components of the balance of payments accounts
The relationships between the accounts
Balance of payments
The balance of payments Balance of Payments Accounts The relationship between the current account and the exchange rate
Policies to correct balance of payments disequilibrium
Implications of a persistent current account deficit
Methods to correct a persistent current account deficit
The relationship between the current account and the exchange rate
Determination of freely floating exchange rates
Exchange Rates
Real and Nominal Exchange Rate Causes of changes in the exchange rate Exchange rates
The Foreign Exchange Market
The effects of exchange rate changes
Exchange Rate
Fixed exchange rates
Effect of Changes in Policies and Economic Conditions on
How Policies and Events Affect an Open Economy Managed exchange rates (managed float)
the Foreign Exchange Market
Evaluation of different exchange rate systems
The meaning of FDI and MNCs
Foreign Direct Investment (FDI) Real Interest Rates and International Capital Flows Policies towards developing economies; policies of trade and aid
Advantages and disadvantages of FDI for economically less developed countries
International
Classifications and types of aid
Economics
Foreign Aid and Multilateral Development Assistance Evaluation of foreign aid Policies towards developing economies; policies of trade and aid
The roles of the International Monetary Fund (IMF) and the World Bank