Unit 1 of Economics (syllabus: Module I — nature and significance of economics and its relevance to law; micro and macro; positive and normative; demand, elasticity and supply; market structures; circular flow; national income and its measures; trade cycles). Below: what the unit covers, the provisions it turns on, and the cases an examiner expects you to name.
What this unit covers
- What exactly does Robbins's definition of economics assert, and what follows from it?
- When does the law of demand fail, and what is the difference between a movement and a shift?
- How is price elasticity of demand measured, and why does the answer change with the direction of travel?
- What happens when a statute fixes a price above or below the equilibrium?
- Why is a monopolist inefficient, and why is there no supply curve outside perfect competition?
- Why are oligopoly prices rigid, and why is rigidity not proof of a cartel?
- How does the ladder of national income aggregates work, and what does each adjustment do?
Treat that list as a self-test: recite each topic's rule from memory before you open its cases.
Provisions
- Robbins's definition: economics studies human behaviour as a relationship between ends and scarce means which have alternative uses, s. Definitions of economics
- Law of demand: other things equal, quantity demanded varies inversely with price, s. Law of demand, its assumptions and exceptions
- Price elasticity of demand = percentage change in quantity demanded ÷ percentage change in price, s. Elasticity of demand — kinds, degrees, methods and determinants
- Economic Survey on price support; market equilibrium where quantity demanded equals quantity supplied, s. Equilibrium price; price ceiling and price floor
- Competition Act, 2002, s. 4
- Competition Act, 2002, s. 3(3)
- MOSPI national accounts concepts, s. National income aggregates and their measurement
Leading cases
- Lionel Robbins
- Law of demand and its exceptions; Giffen's observation of the Irish famine of 1845
- Price elasticity of demand: kinds
- Standard microeconomic analysis
- No leading judgment is prescribed for this provision in this course.
- Ministry of Statistics and Programme Implementation on Gross Value Added