AQA Unit 3 Economics: Business Economics and the Distribution of Income

notes for the AQA spec for economics: econ3.

Laid out in the order of the specification.

**JUST REALISED THAT I HAVE GOT CONFUSED WITH THE DIAGRAMES THAT SHOW ABNORMAL AND SUBNORMAL PROFITS. EVERYTHING ELSE SHOULD BE RIGHT BUT I HAVE GOT THESE DIAGRAMS THE OTHER WAY ROUND**

good luck!

HideShow resource information
Preview of AQA Unit 3 Economics: Business Economics and the Distribution of Income

First 9 words of the document:

Economics
Unit 3
Revision
1 | Page

Other pages in this set

Page 2

Preview of page 2

Here's a taster:

The
fi
rm:
Obj
ect
ives,
cost
s and
revenues
The Objectives of firms
The
mo del
s t
hat
comp r
ise
the
tr
adi
ti
onal
t
heory
of
the
fi
rm ar
e based
upon
t
he assumpti
on t
hat
fi
rms ai
m t
o maxi
mise
prof
it
s.…read more

Page 3

Preview of page 3

Here's a taster:

The Divorce of Ownership and Control
Many comp ani
es have
a di
vorce
of
ow nershi
p and
con t
rol
,
me ani
n g
the
owners
an d
those
w ho
contr
ol
the
fi
rm (mana ger
s)
a r
e di
ff
erent
groups wi
th
di
ff
erent
object
ives.…read more

Page 4

Preview of page 4

Here's a taster:

Long
run
product
ion
and
ret
urns
to
scal
e
The
law of
dimini
shi
ng r
etur
n s
is
a shor
trun l
aw which
doe s
not
operat
e i
n
t
he l
ong
run,
when a
fi
rm can
increase
the
scale
of
all
i
ts
input
s or
f
actor
s
of
pr
o duct
ion.
Retur
ns t
o scal
e onl
y happen
in
the l
ong r
un .…read more

Page 5

Preview of page 5

Here's a taster:

Fixed and variable costs, marginal, average and total costs,
shortrun and longrun costs and economies and
diseconomies scale
Shor
t
run
cost
s
I
n t
he
short
run,
a f
i
rm's t
otal
cost
s of
producti
on di
vi
d e
int
o f
ixed
costs
(
Ex amples
of
fi
xe d
costs
incl
ude t
h e
rental
cost
s of
bui
ldi
ngs
the cost
s of
l
easing
or pur
ch asi
ng capi
tal
equipment
su ch…read more

Page 6

Preview of page 6

Here's a taster:

H ence
ma rgi
nal
cost
s f
all
at
l
ow
level
s of
out
put.
But
a s
soon as
the
law of
di
min i
shi
ng r
eturns
sets
in,
each
w or
ke r
hi
red
ad ds
less
to
tot
al
output
than
the pr
evious
w or
ker
taken
o n.
Tot
al
cost
s of
pr
od uct
ion
ri
se f
aster
than
ou t
put,
l
eading
to
ri
sing
ma rgi
nal
costs.…read more

Page 7

Preview of page 7

Here's a taster:

The
d i
agram show s
how
the f
ir
m's average total cost (ATC) curve
is
ar
ri
ved
at
by adding
up the
A FC and AVC
cu r
ve s. The AT C cur
ve i
s
U shaped showing
that
average t
otal
costs
p er
un it
of
o ut
pu t
f
ir
st
fal
l
and
l
ater
ri
se as
output
is
incr
ease d.…read more

Page 8

Preview of page 8

Here's a taster:

MES
The
min i
mu m eff
ici
ent
scale
(ME S)
is
the out
put
for
a busi
ne ss
i
n
the
long
r
un where t
he
i
n t
ernal
economies of
scale
have been f
ull
y expl
oit
e d.…read more

Page 9

Preview of page 9

Here's a taster:

ME S.
With
a natur
a l
mono pol
y,
the cost
st
ructur
e i
s di
ffer
ent.
For examp l
e,
i
n i
ndustri
es where massive
ne t
w or
ks or
nati
ona l
di
str
ibut
ion channel
s are
r
equ i
red,
t
h e
overhead costs
rel
a t
ive
to
the r
unning cost
s are
li
kely
to
be
hi
gh.…read more

Page 10

Preview of page 10

Here's a taster:

Aspect
s of
t
echnol
ogy
A
p at
ent
can
be used
to
prot
ect
the
invent
ion.
I
ntel
lect
ual
pr
oper
ty
ri
ght
s
can
prot
ect
the
name ,
br
and and
tr
adema rk.…read more

Comments

davidsalter

This is a 92 page summary of the AQA unit 3 course. It starts with the theory of the firm which would be useful for all exam boards. Well written and comprehensive with required graphs as well.

izzy

AMAZING! THANK YOU!

Similar Economics resources:

See all Economics resources »See all resources »