Candidates must be able to demonstrate apt knowledge of the following topics in micro-economic decision makers.

TopicCandidates should be able to:
Money & Banking• analyse the forms, functions and characteristics of money
• evaluate the role and importance of central banks and commercial banks for
government, producers and consumers
Households• evaluate the influences of spending, saving and borrowing including income, the rate of
interest and confidence between different households and over time
Workers• evaluate the factors affecting an individual’s choice of occupation
• analyse how wages are determined including the influences of demand and supply,
relative bargaining power and government policy
• evaluate the reasons for differences in earnings including differences in demand and
supply, relative bargaining strength, discrimination and government policy
• evaluate the advantages and disadvantages of division of labour for workers, firms and
the economy
Trade Unions• define a trade union
• analyse the role of trade unions in the economy including engaging in collective
bargaining on wages, working hours and working conditions, protecting employment
and influencing government policy
• analyse the factors influencing the strength of trade unions
• evaluate the advantages and disadvantages of trade union activity from the viewpoint
of workers, firms and the government
Firms• classify firms in terms of primary/secondary/tertiary sectors, private/public sector and the relative size
• evaluate the advantages and disadvantages of small firms and reasons for their
existence
• analyse the causes and forms of the growth of firms
• evaluate the advantages and disadvantages of different types of mergers: horizontal,
vertical and conglomerate
• evaluate how internal and external economies and diseconomies of scale can affect a
firm/industry as the scale of production changes
Firms & Production• evaluate the influences on demand for factors of production including demand for
the product, the price of different factors of production, their availability and their
productivity
• evaluate the reasons for adopting labour-intensive and capital-intensive production
and their advantages and disadvantages
• explain the difference between and influences on production and productivity
Firms’ Costs, Revenue &
Objectives
• define total cost, average total cost, fixed cost, variable cost, average fixed cost and
average variable cost
• calculate total cost, average total cost, fixed cost, variable cost, average fixed cost and
average variable cost
• draw and interpret diagrams that show how changes in output affect costs of
production
• define total revenue and average revenue
• calculate total revenue and average revenue
• analyse the influence of sales on revenue
• evaluate the objectives of firms including survival, social welfare, profit maximisation
and growth
Market Structure• evaluate the effect of a high number of firms on price, quality, choice and profit
• analyse the characteristics of monopoly
• evaluate the advantages and disadvantages of monopoly