The candidate should be able to:

1. distinguish among types of markets;

2. explain the principles of demand and supply;

3. describe causes of shifts in and movements along demand and supply curves;

4. describe the process of aggregating demand and supply curves;

5. describe the concept of equilibrium (partial and general), and mechanisms by which markets achieve equilibrium;

6. distinguish between stable and unstable equilibria, including price bubbles, and identify instances of such equilibria;

7. calculate and interpret individual and aggregate demand, and inverse demand and supply functions, and interpret individual and aggregate demand and supply curves;

8. calculate and interpret the amount of excess demand or excess supply associated with a non-equilibrium price;

9. describe types of auctions and calculate the winning price(s) of an auction;

10. calculate and interpret consumer surplus, producer surplus, and total surplus;

11. describe how government regulation and intervention affect demand and supply;

12. forecast the effect of the introduction and the removal of a market interference (e.g., a price floor or ceiling) on price and quantity;

13. calculate and interpret price, income, and cross-price elasticities of demand and describe factors that affect each measure.