Key term
WJEC A-Level Economics 1520QS
Scarcity and Choice
Topic overviewScarcity, choice and opportunity costProduction possibility frontiers (PPFs): Production possibility frontier diagrams to depict choiceProduction possibility frontiers (PPFs): Factors which may shift the PPF inwards or outwardsSpecialisation, division of labour and exchange: Advantages and disadvantages of specialisationSpecialisation, division of labour and exchange: Productivity
Demand and Supply in Product Markets
Topic overviewFactors influencing demand and supply in product markets: Product marketFactors influencing demand and supply: Main influences on demand and supply in product marketsThe determination of equilibrium price: Equilibrium price and output, and disequilibriumThe determination of equilibrium price: How the market adjusts to a new equilibriumThe determination of equilibrium price: Consumer and producer surplus on the diagramConsumer and producer surplusPrice, income and cross price elasticities: Price elasticity of demandPrice, income and cross price elasticities: Income and cross price elasticity of demandPrice, income and cross price elasticities: Price elasticity of supply, uses of elasticity and tax incidence
Demand and Supply in Labour Markets
Topic overviewWage determination: Demand for labour as a derived demandWage determination: Equilibrium wage rate and shifts in labour demand and supplyWage determination: Elasticity of demand for labour and Elasticity of supply of labourWage determination: Causes of wage differentials, Effects of wage differentials, and wages in WalesLabour market issues: Factors which affect flexibility in labour marketsLabour market issues: Effects of the statutory national minimum wage on labour marketsLabour market issues: Impact of migration on labour markets
Resource Allocation
Market Failure
Topic overviewUnderstanding market failure: Market failureUnderstanding market failure: Public goods, Merit and demerit goodsUnderstanding market failure: ExternalitiesUnderstanding market failure: Externalities of consumption and monopoly powerUnderstanding market failure: Information asymmetries and gaps, Income inequalityUnderstanding market failure: Volatile prices and externality diagramsWhy and how governments intervene in markets: Reasons for government intervention in marketsWhy and how governments intervene in markets: Maximum prices, road pricing, pollution permits and other interventionsWhy and how governments intervene in markets: Evaluating government interventionThe effects of government intervention: Government intervention can create distortions in marketsThe effects of government intervention: Reasons for government failure
Macroeconomic Theory (AS)
Topic overviewThe circular flow of income model: Flows in the circular flow modelThe circular flow of income model: Injections into and withdrawals from the circular flowThe circular flow of income model: Model to explain the concept of national income equilibriumThe units of aggregate demand (AD): Units of aggregate demand: consumptionThe units of aggregate demand (AD): Factors affecting consumption and investment, and the AD curveThe AD function: Why an AD function will slope downward from left to rightThe AD function: Changes in the unitsThe aggregate supply (AS) function: Shape of the Keynesian long run aggregate supply curveThe aggregate supply (AS) function: Factors which might result in a shift in LRASAD/AS analysis
Government Policy Objectives
Topic overviewEconomic growth: Actual and potential growth, output gaps and the business cycleEconomic growth: Benefits of economic growth for households, government and firmsEconomic growth: Illustrating growth on PPF and AD/AS diagramsUnemployment (AS): Measurement and typesUnemployment (AS): CostsUnemployment (AS): Causes
Policy Instruments (AS)
Topic overviewFiscal policy: FrameworkFiscal policy: Direct and indirect taxes and demand side fiscal policyFiscal policy: Automatic stabilisers, time lags and the Laffer curveMonetary policy: Bank of England and the Monetary Policy Committee, Inflation targetMonetary policy: Bank Rate and the transmission mechanismExchange rates and exchange rate policy: Exchange rates in a free marketExchange rates and exchange rate policy: Exchange rate policySupply side policies: Aims of supply side policiesSupply side policies: Market-based supply side policies and Limitations of supply side policies
International Trade (AS)
Costs, Revenues and Profits
Topic overviewCosts, revenues and profits: Law of diminishing returnsCosts, revenues and profits: Product, total and average costsCosts, revenues and profits: Total, average and marginal values for revenue and costsCosts, revenues and profits: Internal and external economies and diseconomies of scaleCosts, revenues and profits: Concept of profit maximisationThe growth of firms: How and why firms might growThe growth of firms: Types of integration/ mergersEfficiency
Market Structures
Topic overviewBackground to market structuresBusiness objectivesPerfect competition: Perfect competition and its underpinning assumptionsPerfect competition: Efficiency of perfectly competitive marketsMonopolistic competitionMonopoly: Monopoly and its underpinning assumptionsMonopoly: Comparing monopoly with perfect competitionMonopoly: Potential costs and benefits of monopolyOligopoly: Main features of oligopolistic markets and the concept of interdependenceOligopoly: Potential costs and benefits of oligopolyCompetition policy: Why governments are concerned about monopoly powerCompetition policy: Benefits and limits of competitionPrivatisation: Way in which privatisation may increase competitionPrivatisation: Effects of privatisation on competition
Macroeconomic Theory (A2)
Macroeconomic Objectives (A2)
Topic overviewEconomic growth: Actual vs potential economic growth and Causes of growthEconomic growth: Benefits and costs of growthUnemployment (A2): Measurement and typesUnemployment (A2): Costs, measurement and the Phillips curveUnemployment (A2): CausesInflation and deflation: Measurement and calculationInflation and deflation: CausesInflation and deflation: CostsInflation and deflation: DeflationThe balance of payments: Current account imbalances: causesThe balance of payments: Current account imbalances: impactsThe balance of payments: Solutions to current account deficits
Policy Instruments (A2)
Topic overviewControl of the national (public sector) debt: CausesControl of the national (public sector) debt: ImplicationsThe operation of monetary policy: Interest rates and how quantitative easing worksThe operation of monetary policy: Effects and criticisms of quantitative easingThe operation of monetary policy: Quantitative tightening, Funding for Lending and the financial sectorMonetary stability: Asset bubbles and financial crisesFinancial stability
International Trade (A2)
Topic overviewAdvantages and disadvantages of free trade: Advantages of free tradeAdvantages and disadvantages of free trade: Disadvantages of free tradeProtectionism: Free trade compared with protectionist measuresProtectionism: Key methods of protectionismGlobalisation: What globalisation is and what drives it, Benefits of globalisationGlobalisation: Costs of globalisation and Evaluating the net impact of globalisationTrade and the UK: Absolute and comparative advantage, Terms of trade and the gains from tradeTrade and the UK: Disadvantages of international tradeTrade and the UK: Methods of protectionTrade and the UK: Arguments for and against protectionismTrade and the UK: World Trade Organisation and globalisationTrade and the UK: UK’s major export sectors and an integrated world economy
Non-UK Economies
Economic Development
Topic overviewMeasurement: What is meant by economic development and how it is measuredMeasurement: Human development index, More indirect indicators such as access to health and educationObstacles: Why LEDCs may face difficulties in competing with MEDCsObstacles: Relevant obstaclesSolutions: Liberalisation as a route to development, Aid and debt reliefSolutions: Foreign direct investment and trade strategies
Market Structures
- 14 subtopics
- 42 things to know
- A2 Units 3 and 4
What Market Structures covers
Market Structures is A2 content, examined in both A2 Unit 3 and A2 Unit 4, which each cover all A level content. 200 recall questions across 14 subtopics.
Where it is assessed
A2 Units 3 and 4
Exploring Economic Behaviour and Evaluating Economic Models and Policies, both covering all A level content.
Check the WJEC specification ↗The 14 subtopics
Each one has its own page.
- Background to market structuresRecall questions on contestability, structural barriers to entry, behavioural barriers to entry and limit pricing an example of.Open →
- Business objectivesRecall questions on profit maximisation as a business objective, market share maximisation, survival as a business objective, community objectives for a business and principal-agent problem.Open →
- Perfect competition: Perfect competition and its underpinning assumptionsRecall questions on Perfect competition and its underpinning assumptions, Short run and long run equilibrium for the firm and the industry.Open →
- Perfect competition: Efficiency of perfectly competitive marketsRecall questions on The efficiency of perfectly competitive markets.Open →
- Monopolistic competitionRecall questions on monopolistic competition, productive efficiency and excess capacity in monopolistic competition.Open →
- Monopoly: Monopoly and its underpinning assumptionsRecall questions on Monopoly and its underpinning assumptions.Open →
- Monopoly: Comparing monopoly with perfect competitionRecall questions on Comparing monopoly with perfect competition.Open →
- Monopoly: Potential costs and benefits of monopolyRecall questions on The potential costs and benefits of monopoly.Open →
- Oligopoly: Main features of oligopolistic markets and the concept of interdependenceRecall questions on The main features of oligopolistic markets and the concept of interdependence, Oligopolistic markets may be characterised by price and non-price competition.Open →
- Oligopoly: Potential costs and benefits of oligopolyRecall questions on The potential costs and benefits of oligopoly, Game theory to evaluate interdependent behaviour in oligopolistic markets.Open →
- Competition policy: Why governments are concerned about monopoly powerRecall questions on Why governments are concerned about monopoly power and The role of the competition authorities.Open →
- Competition policy: Benefits and limits of competitionRecall questions on The benefits and limits of competition, Privatisation and its effects, Public-private partnerships, deregulation and renationalisation.Open →
- Privatisation: Way in which privatisation may increase competitionRecall questions on The way in which privatisation may increase competition.Open →
- Privatisation: Effects of privatisation on competitionRecall questions on The effects of privatisation on competition, efficiency, prices and the whole economy.Open →
What you need to know
Answer each one before you reveal it.
Your recallNot started
Process
Explain the process by which short-run supernormal profits are eliminated in perfect competition.
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What happens in a perfectly competitive industry where firms are making losses?
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State the full long-run equilibrium condition for a firm in perfect competition.
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Give three reasons why perfect competition is rarely, if ever, found in real markets.
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Name the three degrees of price discrimination and state what distinguishes each.
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What is one key factor that determines market structure?
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Besides the number of firms, what other factor determines market structure?
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Define profit maximisation as a business objective.
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What is revenue maximisation as a business objective, and at what point does it occur?
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Is allocative efficiency achieved in monopolistic competition? Explain why.
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What condition must be satisfied for allocative efficiency to occur?
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What is a pure monopoly?
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On what assumptions does the monopoly model rest?
Numbers
A monopolist maximises profit at 500 units, charging £20 per unit, with an average total cost of £14. Calculate its supernormal profit.
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Under third-degree price discrimination, which group is charged the higher price and why?
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Give two ways in which price discrimination can benefit consumers.
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What is an oligopoly?
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What does interdependence mean in the context of an oligopoly?
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What does a concentration ratio measure?
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What does a higher concentration ratio indicate about a market?
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Why are governments concerned that monopolies may charge higher prices than firms in competitive markets?
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How might monopoly power affect the quantity of goods produced and the range available to consumers?
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State four benefits that competition can bring to an economy.
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Why might competition not always be desirable in industries with significant economies of scale?
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What is privatisation?
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What does the sale of government shares in nationalised industries involve?
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When might privatisation result in higher prices?
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What are the potential economy-wide efficiency benefits of privatisation?
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Define contestability.
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Define market share maximisation.
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How does the industry demand curve differ from the demand curve facing one firm in perfect competition?
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Is productive efficiency achieved in monopolistic competition? Explain why.
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Why does the assumption of high barriers to entry matter so much in the monopoly model?
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How do a monopolist's price and output compare with those of a perfectly competitive industry facing the same costs?
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Define natural monopoly.
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If one firm in an oligopoly cuts its price, what is the likely response of rivals and why?
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Why might oligopolistic firms be well-placed to invest in innovation?
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What form of inefficiency arises when a monopolist sets price above marginal cost?
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Why is contestability considered desirable even when actual competition is limited?
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What are public-private partnerships?
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What negative impacts on the wider economy might privatisation cause?
Take Market Structures further
The same content, four other ways.
Questions from this topic
Each one with the model answer underneath.
- 1
What is one key factor that determines market structure?
Model answer
The number of firms operating in the market.
- 2
Besides the number of firms, what other factor determines market structure?
Model answer
The ability of firms to enter and exit markets freely, known as contestability.
- 3
Define contestability.
Model answer
Contestability refers to the ease with which firms can enter and exit a market.
- 4
How can the degree of contestability in a market be influenced externally?
Model answer
Regulators can affect the degree of contestability in a market through their policies and interventions.
- 5
What are structural barriers to entry?
Model answer
Structural barriers to entry are inherent characteristics of the market that make entry difficult, such as high start-up costs.
- 6
Why might high start-up costs deter potential entrants to a market?
Model answer
High start-up costs require significant initial capital investment, making it difficult for new firms to enter and compete with established firms.
What is inside Levo
Six ways to work the same material.
Market Structures revision questions
- What does Market Structures cover in WJEC A-Level Economics?
- 14 subtopics: background to market structures, business objectives, perfect competition: perfect competition and its underpinning assumptions, perfect competition: efficiency of perfectly competitive markets, monopolistic competition, monopoly: monopoly and its underpinning assumptions, monopoly: comparing monopoly with perfect competition, monopoly: potential costs and benefits of monopoly, oligopoly: main features of oligopolistic markets and the concept of interdependence, oligopoly: potential costs and benefits of oligopoly, competition policy: why governments are concerned about monopoly power, competition policy: benefits and limits of competition, privatisation: way in which privatisation may increase competition and privatisation: effects of privatisation on competition. Each one has its own page with questions and model answers.
- How is Market Structures organised?
- By the WJEC 1520QS specification, subtopic by subtopic, so it matches the order you are taught it in.
Every question in Market Structures, on a schedule.
Attempt a question from memory, write the correct version, then attempt it again. Levo records the jump between your first attempt and your last, and brings each question back on the day you are due to forget it.
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