The purpose of this section is to identify and explain the importance of markets and the role played by demand and supply. The roles played by consumers, producers and the government in different market structures are highlighted. The failures of a market system are identified and possible solutions are examined.
The concepts learned here have links with other areas of the economics syllabus; for example, elasticity has many applications in different areas of international trade and development.
Section 1: Microeconomics
1.1 Competitive markets: demand and supply (some topics HL only)
1.3 Government intervention (some topics HL extension, plus one topic HL only)
1.4 Market failure (some topics HL only)
1.5 Theory of the firm and market structures (HL only)