Microeconomics Theory
KNOWLEDGE EXPECTED OF: QAFP® Professionals
Highest Knowledge Level: Awareness
Knowledge Levels and Associated Verbs
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Awareness
The state of being aware that something exists / to have familiarity with a particular activity or subject
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Understanding
To comprehend the general relationship of particulars / to have an expertise with how something works
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Application
Ability to put information to use / to use knowledge for relevant, practical purposes
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Evaluation
To judge or conclude by utilizing data / a systematic determination of something’s worth or significance
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Define
To state exactly the meaning of
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Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
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Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
|
Determine
To ascertain / to come to a decision, such as by investigation or reasoning
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Compare
To note the similarities and differences between two or more things
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Estimate
To determine an approximate value for
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Calculate
To find the value using mathematics
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Convert
To change from one form or purpose to another
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Evaluate
To reach a conclusion or make a through careful study
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Interpret
To give the meaning of / to construe or understand / to translate orally
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Hold cursor over or click on each term to read its definition.
- Define microeconomics.
- Identify how the price paid for a good, service or other asset is determined (through demand and supply).
- Define demand.
- Identify determinants of demand, such as:
- Price of goods or services
- Price of related goods or services (substitutes or complementary goods and services)
- Consumer income or wealth
- Consumer expectations of future prices, income or wealth
- Consumer behaviour
- Number of consumers
- Price elasticity
- Identify the expected effect on demand of a change in each determinant of demand.
- Identify the effect of taxation on demand.
- Define supply.
- Identify determinants of supply, such as:
- Price of goods or services
- Cost of producing goods or services
- Price of related goods or services (substitute or complementary goods and services)
- Producer expectations of the future prices of goods or services
- Number of sellers
- Identify the expected effect on supply of a change in each determinant of supply.
- Identify the effect of taxation on supply.
- Define market equilibrium.
- Identify how market equilibrium is achieved.
- Identify the effect of a change in demand or supply on market equilibrium.
KNOWLEDGE EXPECTED OF: CFP® Professionals
Highest Knowledge Level: Understanding
Knowledge Levels and Associated Verbs
|
Awareness
The state of being aware that something exists / to have familiarity with a particular activity or subject
|
Understanding
To comprehend the general relationship of particulars / to have an expertise with how something works
|
Application
Ability to put information to use / to use knowledge for relevant, practical purposes
|
Evaluation
To judge or conclude by utilizing data / a systematic determination of something’s worth or significance
|
||||||
|---|---|---|---|---|---|---|---|---|---|
|
Define
To state exactly the meaning of
|
Identify
To be aware of / to recognize and correctly name / to locate an appropriate resource
|
Explain
To make clear the meaning of / to describe something in more detail or reveal relevant facts or ideas related to it
|
Determine
To ascertain / to come to a decision, such as by investigation or reasoning
|
Compare
To note the similarities and differences between two or more things
|
Estimate
To determine an approximate value for
|
Calculate
To find the value using mathematics
|
Convert
To change from one form or purpose to another
|
Evaluate
To reach a conclusion or make a through careful study
|
Interpret
To give the meaning of / to construe or understand / to translate orally
|
Hold cursor over or click on each term to read its definition.
- Define microeconomics.
- Define demand.
- Define supply.
- Define market equilibrium.
Additional Knowledge Expected of CFP Professionals
- Explain how the price paid for a good, service or other asset is determined (through demand and supply).
- Explain determinants of demand, such as:
- Price of goods or services
- Price of related goods or services (substitutes or complementary goods and services)
- Consumer income or wealth
- Consumer expectations of future prices, income or wealth
- Consumer behaviour
- Number of consumers
- Price elasticity
- Explain the expected effect on demand of a change in each determinant of demand.
- Explain the effect of taxation on demand.
- Explain determinants of supply, such as:
- Price of goods or services
- Cost of producing goods or services
- Price of related goods or services (substitute or complementary goods and services)
- Producer expectations of the future prices of goods or services
- Number of sellers
- Explain the expected effect on supply of a change in each determinant of supply.
- Explain the effect of taxation on supply.
- Explain how market equilibrium is achieved.
- Explain the effect of a change in demand or supply on market equilibrium.
- Define arbitrage.
- Explain the role of arbitrage in achieving market equilibrium.