Definition of the mixed economic system. Government intervention to address market failure. Definitions, drawing and interpretation of appropriate diagrams showing the effects of three government microeconomic policy measures: maximum and minimum prices in product, labour and foreign exchange markets; indirect taxation; and subsidies. The implications of other government microeconomic policy measures: regulation; privatisation and nationalisation; and direct provision of goods. The effectiveness of government intervention in overcoming the drawbacks of a market economic system.

Factors affecting an individual’s choice of occupation – wage and non-wage factors. The influences of demand and supply, relative bargaining power and government policy, including minimum wage. How changes in demand and supply, relative bargaining strengths, discrimination and government policy can all influence differences in earnings between workers whether they are: skilled/unskilled; primary/secondary/tertiary; male/female; private sector/public sector. Definition, drawing and interpretation of diagrams that illustrate the effects of changes in demand and supply in the labour market. Advantages and disadvantages for workers, firms and the economy.