Process
WJEC AS-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
Demand and Supply in Product Markets
- 9 subtopics
- 27 things to know
- AS Units 1 and 2
What Demand and Supply in Product Markets covers
Demand and Supply in Product Markets is AS content, examined in both AS Unit 1 and AS Unit 2, which each cover the full AS content. 156 recall questions across 9 subtopics.
Where it is assessed
AS Units 1 and 2
Introduction to Economic Principles and Economics in Action, both covering the full AS content.
Check the WJEC specification ↗The 9 subtopics
Each one has its own page. WJEC AS Economics students sit this topic in the first year.
- Factors influencing demand and supply in product markets: Product marketRecall questions on A product market, The objectives of economic agents and The importance of marginal utility in the derivation of demand curves.Open →
- Factors influencing demand and supply: Main influences on demand and supply in product marketsRecall questions on The main influences on demand and supply in product markets, Why demand curves normally slope downward from left to right, Why supply curves will normally slope upward from left to right.Open →
- The determination of equilibrium price: Equilibrium price and output, and disequilibriumRecall questions on Equilibrium price and output, and disequilibrium, Movements along and shifts of the demand and supply curves.Open →
- The determination of equilibrium price: How the market adjusts to a new equilibriumRecall questions on How the market adjusts to a new equilibrium.Open →
- The determination of equilibrium price: Consumer and producer surplus on the diagramRecall questions on Consumer and producer surplus on the diagram.Open →
- Consumer and producer surplusRecall questions on Consumer and producer surplus.Open →
- Price, income and cross price elasticities: Price elasticity of demandRecall questions on Price elasticity of demand.Open →
- Price, income and cross price elasticities: Income and cross price elasticity of demandRecall questions on Income and cross price elasticity of demand.Open →
- Price, income and cross price elasticities: Price elasticity of supply, uses of elasticity and tax incidenceCalculating and interpreting price elasticity of supply, how firms and government use the four elasticities, and how elasticity decides who bears an indirect tax or gains from a subsidy, with the Soft Drinks Industry Levy as a case.Open →
What you need to know
Answer each one before you reveal it.
Your recallNot started
Process
How does a market adjust to a fall in demand?
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What four types of elasticity can be calculated and interpreted using percentage change data?
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What is a product market?
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What is the primary objective that consumers are assumed to pursue in economic theory?
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What is the typical shape of a supply curve, and in which direction does it slope?
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Define equilibrium output in a competitive market.
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What information can be determined from the intersection point of demand and supply curves on a standard market diagram?
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Following an increase in demand, how does the market adjust to reach a new equilibrium?
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How is consumer surplus represented on a supply and demand diagram?
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What is significant about the combined total of consumer and producer surplus at free market equilibrium?
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What is consumer surplus?
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On a supply and demand diagram, where is consumer surplus located?
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What does price elasticity of demand (PED) measure?
Numbers
State the formula for calculating price elasticity of demand.
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What does income elasticity of demand (YED) measure?
Numbers
State the formula for calculating income elasticity of demand.
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What does price elasticity of supply (PES) measure?
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Define marginal utility.
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If the market price of a good increases significantly, what would you expect to happen to the quantity supplied, assuming a normal supply curve?
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What causes a movement along a demand curve?
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In which direction does the demand curve shift when demand decreases?
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In the consumer surplus formula, what does the 'height' of the triangle represent?
Numbers
State the formula for calculating the area of a triangle.
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What are the two components in the PED formula and what does each represent?
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Identify the numerator and denominator in the YED formula.
Numbers
State the formula for calculating price elasticity of supply.
Take Demand and Supply in Product Markets further
The same content, four other ways.
Commonly confused
Pairs that lose marks when they are blurred together.
Movement along a demand curve vs Shift of a demand curve
Movement along a demand curve: a change in the quantity bought caused by a change in the good’s own price. Shift of a demand curve: a change in the quantity bought at every price, caused by a non-price factor.
Equilibrium price vs Disequilibrium
Equilibrium price: the price at which the quantity buyers want equals the quantity sellers offer. Disequilibrium: any price at which the two quantities differ, leaving a shortage or a glut.
Price elasticity of demand vs Income elasticity of demand
Price elasticity of demand: the responsiveness of the quantity bought to a change in the price of the good. Income elasticity of demand: the responsiveness of the quantity bought to a change in consumer income.
Questions from this topic
Each one with the model answer underneath.
- 1
What is a product market?
Model answer
A market where finished goods and services are bought and sold between producers and consumers.
- 2
What is the primary objective assumed for firms in economic analysis?
Model answer
To maximise profits.
- 3
What is the primary objective that consumers are assumed to pursue in economic theory?
Model answer
Consumers are assumed to seek to maximise satisfaction or utility.
- 4
Why do economists assume that consumers aim to maximise utility when making purchasing decisions?
Model answer
This assumption provides a rational basis for predicting consumer behaviour, as it implies consumers will allocate their limited income to purchase goods and services that give them the greatest total satisfaction.
- 5
What behavioural assumption is made about both firms and consumers in standard economic analysis?
Model answer
They are assumed to behave rationally.
- 6
Define marginal utility.
Model answer
The additional satisfaction gained from consuming one more unit of a good or service.
What is inside Levo
Six ways to work the same material.
Demand and Supply in Product Markets revision questions
- Is Demand and Supply in Product Markets examined at AS in WJEC Economics?
- Yes. It sits in AS Units 1 and 2, which you take in the first year, so it is on the AS paper as well as counting towards the full A level.
- What does Demand and Supply in Product Markets cover in WJEC AS-Level Economics?
- 9 subtopics: factors influencing demand and supply in product markets: product market, factors influencing demand and supply: main influences on demand and supply in product markets, the determination of equilibrium price: equilibrium price and output, and disequilibrium, the determination of equilibrium price: how the market adjusts to a new equilibrium, the determination of equilibrium price: consumer and producer surplus on the diagram, consumer and producer surplus, price, income and cross price elasticities: price elasticity of demand, price, income and cross price elasticities: income and cross price elasticity of demand and price, income and cross price elasticities: price elasticity of supply, uses of elasticity and tax incidence. Each one has its own page with questions and model answers.
- How is Demand and Supply in Product Markets organised?
- By the WJEC 1520QS specification, subtopic by subtopic, so it matches the order you are taught it in.
Every question in Demand and Supply in Product Markets, 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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