This opening chapter sets the scene by introducing vou to some key ideas and identifving the scone of economic analysis.

Land, labour, capital and enterprise can be directed toward countless activities, yet at any given moment only one set of choices can be implemented. Resource allocation is the process by which a society decides how to deploy its productive assets across those alternatives.

The demand curve offers a compact way to depict this relationship and to separate movements caused by price changes from shifts caused by other influences.

In thinking about supply, attention switches to firms (businesses), as it is firms that take decisions about how much outout to sunoly to the market

The previous chapters introduced the notions of demand and supply, and it is now time to bring these two curves together in order to meet the key concept of market equilibrium. The model can then be further developed to see how it provides insights into how markets operate.

Whether the changes in demand and supply are reflected in price or in quantity depends upon the extent to which demand and supply are sensitive to the change in market conditions.

Every decision about using scarce resources is made at the margin, which means the chooser weighs the extra benefit from a tiny increase in an activity against the extra cost that the same increase brings.

Markets do not always allocate resources effectively to meet the needs of society, creating a situation of market failure.

Markets fail when information is unequal. From dentists and insurers to second-hand cars and pensions, information gaps distort choices, misprice risk, and waste resources. Closing those gaps is the only way efficiency can return.

This chapter investigates how governments may intervene to influence markets. In this chapter, we focus on the ways in which governments may intervene to influence how markets work.

Firms need to make decisions about output and price. This chapter examines some of the key concepts needed to analyze the behavior of firms, and the following chapter considers the objectives that firms may choose to pursue.

This chapter explores business objectives and underlying theories that explain how firms take decisions.

This chapter introduces the concept of various market structures, and explores the most competitive market structure, perfect competition.

This chapter explores the monopoly market structure.

This chapter explores and evaluates the monopolistic competition market structure.

This chapter explores and evaluates the oligopoly market structure.

This chapter explores the concept of contestable markets. It has been argued that in some markets, in order to prevent the entry of new firms, the existing firm would have to charge such a low price that it would be unable to reap any supernormal profits at all.

This chapter explores the idea of a labor market and how wages are determined.

This chapter explores how individuals choose to supply labor.