The exam focuses on microeconomic principles, market mechanisms, and government interventions. Topics include price elasticity, externalities, economies of scale, and resource allocation through the price mechanism. Analytical tasks address the impact of subsidies, indirect taxation, and production externalities on markets. Section B evaluates real-world applications, such as water resource management and alcohol pricing strategies, focusing on market efficiency, regulation, and policy impacts. Quantitative reasoning involves elasticity calculations, cost-benefit analysis, and diagrammatic evaluations. The exam emphasizes evaluating market failures, public goods provision, and the effectiveness of interventions in addressing economic inefficiencies and promoting equity.