Economics A

    Pearson Edexcel
    A-Level

    Specification: 9EC0

    The PEARSON-EDEXCEL A-Level Economics A specification covers 88 topics with 297 learning objectives (9EC0). Use the topic browser below to explore subtopics, exam tips, common mistakes, and key terminology for each area of the course.

    Starting Pearson Edexcel A-Level Economics A this term? The whole specification is below, unit by unit.

    This subject will help you develop key knowledge and skills required for exam success.

    88

    Topics

    297

    Objectives

    0

    Exam Tips

    0

    Pitfalls

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    About Pearson Edexcel A-Level Economics A

    Pearson Edexcel A-Level Economics A is a rigorous and engaging course that explores how individuals, firms, and governments make decisions about scarce resources. You will study both microeconomics and macroeconomics, developing a critical understanding of market forces, government intervention, and the global economy. The specification is structured into four themes: Theme 1 (Introduction to markets and market failure), Theme 2 (The UK economy - performance and policies), Theme 3 (Business behaviour and the labour market), and Theme 4 (A global perspective).

    The course emphasises real-world application, encouraging you to use economic models and theories to analyse current issues such as inflation, unemployment, inequality, and climate change. You will build skills in data interpretation, essay writing, and evaluation, all of which are essential for the exams. The A-Level is linear, meaning you will sit all exams at the end of your two-year course, with opportunities to explore both core and optional topics in depth.

    Assessment Structure

    The Pearson Edexcel A-Level Economics A is assessed through three written exams, each worth 33.3% of the final grade. Paper 1 (Markets and business behaviour) covers Themes 1 and 3, Paper 2 (The national and global economy) covers Themes 2 and 4, and Paper 3 (Microeconomics and macroeconomics) draws on all four themes. Each paper is 2 hours long and contains a mix of multiple-choice, short-answer, data-response, and essay questions. Papers 1 and 2 include a 25-mark essay, while Paper 3 includes a 30-mark essay. There is no coursework; all assessment is exam-based.

    Why Choose Pearson Edexcel?

    • Edexcel offers a clear and logical structure with four distinct themes, making it easy to see how micro and macro concepts connect and progress over the two years.
    • The exams include a variety of question types, from multiple-choice to extended essays, allowing you to demonstrate a range of skills and reducing reliance on a single assessment style.
    • Edexcel provides a wealth of support materials, including past papers, mark schemes, and exemplar answers, which are invaluable for revision and exam preparation.

    Frequently Asked Questions

    Specification Topics

    88 topics

    Economics as a social science

    b) The use of the ceteris paribus assumption in building models, c) The inability in economics to make scientific experiments, a) Thinking like an economist: the process of developing models in economics, including the need to make assumptions

    3 objectives3 subtopics

    Positive and normative economic statements

    b) The role of value judgements in influencing economic decision making and policy, a) Distinction between positive and normative economic statements

    2 objectives2 subtopics

    The economic problem

    b) The distinction between renewable and non-renewable resources, a) The problem of scarcity – where there are unlimited wants and finite resources, c) The importance of opportunity costs to economic agents (consumers, producers and government)

    3 objectives3 subtopics

    Production possibility frontiers

    a) The use of production possibility frontiers to depict: o the maximum productive potential of an economy o opportunity cost (through marginal analysis) o economic growth or decline o efficient or inefficient allocation of resources o possible and unobtainable production, b) The distinction between movements along and shifts in production possibility curves, considering the possible causes for such changes, c) The distinction between capital and consumer goods

    3 objectives3 subtopics

    Specialisation and the division of labour

    c) The advantages and disadvantages of specialising in the production of goods and services to trade, a) Specialisation and the division of labour: reference to Adam Smith, d) The functions of money (as a medium of exchange, a measure of value, a store of value, a method of deferred payment) +1 more

    4 objectives4 subtopics

    Free market economies, mixed economy and command economy

    c) The role of the state in a mixed economy, a) The distinction between free market, mixed and command economies: reference to Adam Smith, Friedrich Hayek and Karl Marx, b) The advantages and disadvantages of a free market economy and a command economy

    3 objectives3 subtopics

    Rational decision making

    a) The underlying assumptions of rational economic decision making: o consumers aim to maximise utility o firms aim to maximise profits

    1 objectives

    Alternative views of consumer behaviour

    a) The reasons why consumers may not behave rationally: o consideration of the influence of other people's behaviour o the importance of habitual behaviour o consumer weakness at computation

    1 objectives

    Demand

    a) The distinction between movements along a demand curve and shifts of a demand curve, b) The factors that may cause a shift in the demand curve (the conditions of demand), c) The concept of diminishing marginal utility and how this influences the shape of the demand curve

    3 objectives3 subtopics

    Price, income and cross elasticities of demand

    b) Use formulae to calculate price, income and cross elasticities of demand, e) The significance of elasticities of demand to firms and government in terms of: o the imposition of indirect taxes and subsidies o changes in real income o changes in the prices of substitute and complementary goods, c) Interpret numerical values of o price elasticity of demand: unitary elastic, perfectly and relatively elastic, and perfectly and relatively inelastic o income elasticity of demand: inferior, normal and luxury goods; relatively elastic and relatively inelastic o cross elasticity of demand: substitutes, complementary and unrelated goods +3 more

    6 objectives6 subtopics

    Supply

    b) The factors that may cause a shift in the supply curve (the conditions of supply), a) The distinction between movements along a supply curve and shifts of a supply curve

    2 objectives2 subtopics

    Elasticity of supply

    b) Use formula to calculate price elasticity of supply, a) Understanding of price elasticity of supply, d) Factors that influence price elasticity of supply +2 more

    5 objectives5 subtopics

    Price determination

    c) The operation of market forces to eliminate excess demand and excess supply, d) The use of supply and demand diagrams to show how shifts in demand and supply curves cause the equilibrium price and quantity to change in real-world situations, a) Equilibrium price and quantity and how they are determined +1 more

    4 objectives4 subtopics

    Price mechanism

    b) The price mechanism in the context of different types of markets, including local, national and global markets, a) Functions of the price mechanism to allocate resources: o rationing o incentive o signalling

    2 objectives2 subtopics

    Consumer and producer surplus

    a) The distinction between consumer and producer surplus, c) How changes in supply and demand might affect consumer and producer surplus, b) The use of supply and demand diagrams to illustrate consumer and producer surplus

    3 objectives3 subtopics

    Indirect taxes and subsidies

    a) Supply and demand analysis, elasticities, and: o the impact of indirect taxes on consumers, producers and government o the incidence of indirect taxes on consumers and producers o the impact of subsidies on consumers, producers and government o the area that represents the producer subsidy and consumer subsidy

    1 objectives

    Types of market failure

    a) Understanding of market failure, b) Types of market failure o externalities o under-provision of public goods o information gaps

    2 objectives2 subtopics

    Externalities

    e) The impact on economic agents of externalities and government intervention in various markets, b) Distinction between private benefits, external benefits and social benefits, a) Distinction between private costs, external costs and social costs +2 more

    5 objectives5 subtopics

    Public goods

    a) Distinction between public and private goods using the concepts of non-rivalry and non-excludability, b) Why public goods may not be provided by the private sector: the free rider problem

    2 objectives2 subtopics

    Information gaps

    a) The distinction between symmetric and asymmetric information, b) How imperfect market information may lead to a misallocation of resources

    2 objectives2 subtopics

    Government intervention in markets

    b) Other methods of government intervention: o trade pollution permits o state provision of public goods o provision of information o regulation, a) Purpose of intervention with reference to market failure and using diagrams in various contexts: o indirect taxation (ad valorem and specific) o subsidies o maximum and minimum prices

    2 objectives2 subtopics

    Government failure

    b) Causes of government failure: o distortion of price signals o unintended consequences o excessive administrative costs o information gaps, a) Understanding of government failure as intervention that results in a net welfare loss, c) Government failure in various markets

    3 objectives3 subtopics

    Economic growth

    a) Rates of change of real Gross Domestic Product (GDP) as a measure of economic growth, d) Comparison of rates of growth between countries and over time, f) The limitations of using GDP to compare living standards between countries and over time +4 more

    7 objectives7 subtopics

    Inflation

    e) Causes of inflation: o demand pull o cost push o growth of the money supply, a) Understanding of: o inflation o deflation o disinflation, c) The limitations of CPI in measuring the rate of inflation +3 more

    6 objectives6 subtopics

    Employment and unemployment

    d) The causes of unemployment: o structural unemployment o frictional unemployment o seasonal unemployment o demand deficiency and cyclical unemployment o real wage inflexibility, e) The significance of migration and skills for employment and unemployment, b) The distinction between unemployment and under-employment +3 more

    6 objectives6 subtopics

    Balance of payments

    d) The interconnectedness of economies through international trade, a) Components of the balance of payments, with particular reference to the current account, and the balance of trade in goods and services, b) Current account deficits and surpluses +5 more

    8 objectives8 subtopics

    The characteristics of AD

    b) The relative importance of the components of AD, a) Components of AD: C+I+G+(X-M), d) The distinction between a movement along, and a shift of, the AD curve +1 more

    4 objectives4 subtopics

    Consumption (C)

    c) Other influences on consumer spending: o interest rates o consumer confidence o wealth effects, b) An understanding of the relationship between savings and consumption, a) Disposable income and its influence on consumer spending

    3 objectives3 subtopics

    Investment (I)

    b) Influences on investment: o the rate of economic growth o business expectations and confidence o Keynes and ‘animal spirits’ o demand for exports o interest rates o access to credit o the influence of government and regulations, a) Distinction between gross and net investment

    2 objectives2 subtopics

    Government expenditure (G)

    a) The main influences on government expenditure: o the trade cycle o fiscal policy

    1 objectives

    Net trade (X-M)

    a) The main influences on the (net) trade balance: o real income o exchange rates o state of the world economy o degree of protectionism o non-price factors

    1 objectives

    The characteristics of AS

    c) The relationship between short-run AS and long-run AS, a) The AS curve, b) The distinction between movement along, and a shift of, the AS curve

    3 objectives3 subtopics

    Short-run AS

    a) Factors influencing short-run AS: o changes in costs of raw materials and energy o changes in exchange rates o changes in tax rates

    1 objectives

    Long-run AS

    a) Different shapes of the long-run AS curve: o Keynesian o classical, b) Factors influencing long-run AS: o technological advances o changes in relative productivity o changes in education and skills o changes in government regulations o demographic changes and migration o competition policy

    2 objectives2 subtopics

    National income

    a) The circular flow of income, b) The distinction between income and wealth

    2 objectives2 subtopics

    Injections and withdrawals

    a) The impact of injections into, and withdrawals from, the circular flow of income

    1 objectives

    Equilibrium levels of real national output

    a) The concept of equilibrium real national output, b) The use of AD/AS diagrams to show how shifts in AD or AS cause changes in the equilibrium price level and real national output

    2 objectives2 subtopics

    The multiplier

    b) The multiplier process, e) Calculations of the multiplier using the formulae 1/(1-MPC) and 1/MPW, where MPW=MPS+MPT+MPM, d) Understanding of marginal propensities and their effects on the multiplier: o the marginal propensity to consume (MPC) o the marginal propensity to save (MPS) o the marginal propensity to tax (MPT) o the marginal propensity to import (MPM) +3 more

    6 objectives6 subtopics

    Causes of growth

    b) The distinction between actual and potential growth, a) Factors which could cause economic growth, c) The importance of international trade for (export-led) economic growth

    3 objectives3 subtopics

    Output gaps

    c) Use of an AD/AS diagram to illustrate an output gap (level of spare capacity) in an economy, a) Distinction between actual growth rates and long-term trends in growth rates, b) Understanding of positive and negative output gaps and the difficulties of measurement

    3 objectives3 subtopics

    Trade (business) cycle

    b) Characteristics of a boom, a) Understanding of the trade (business) cycle, c) Characteristics of a recession

    3 objectives3 subtopics

    The impact of economic growth

    a) The benefits and costs of economic growth and the impact on: o consumers o firms o the government o current and future living standards

    1 objectives

    Possible macroeconomic objectives

    f) Protection of the environment, c) Low and stable rate of inflation, d) Balance of payments equilibrium on current account +4 more

    7 objectives7 subtopics

    Demand-side policies

    i) Strengths and weaknesses of demand-side policies, h) Awareness of demand-side policies in the Great Depression and the Global Financial Crisis of 2008 o different interpretations o policy responses in the US and UK, e) Distinction between, and examples of, direct and indirect taxation +6 more

    9 objectives9 subtopics

    Supply-side policies

    b) Market-based and interventionist policies: o to increase incentives o to promote competition o to reform the labour market o to improve skills and quality of the labour force o to improve infrastructure, c) Use of AD/AS diagrams to illustrate supply-side policies, d) Strengths and weaknesses of supply-side policies +1 more

    4 objectives4 subtopics

    Conflicts and trade- offs between objectives and policies

    b) Short-run Phillips curve, a) Potential conflicts and trade-offs between the macroeconomic objectives, c) Potential policy conflicts and trade-offs

    3 objectives3 subtopics

    Sizes and types of firms

    c) Distinction between public and private sector organisations, d) Distinction between profit and not-for-profit organisations, a) Reasons why some firms tend to remain small and why others grow +1 more

    4 objectives4 subtopics

    Business growth

    a) How businesses grow: o organic growth o forward and backward vertical integration o horizontal integration o conglomerate integration, b) Advantages and disadvantages of: o organic growth o vertical integration o horizontal integration o conglomerate integration, c) Constraints on business growth: o size of the market o access to finance o owner objectives o regulation

    3 objectives3 subtopics

    Demergers

    b) Impact of demergers on businesses, workers and consumers, a) Reasons for demergers

    2 objectives2 subtopics

    Business objectives

    a) Different business objectives and reasons for them: o profit maximisation o revenue maximisation o sales maximisation o satisficing, b) Diagrams and formulae to illustrate the different business objectives: o profit maximisation o revenue maximisation o sales maximisation

    2 objectives2 subtopics

    Revenue

    b) Price elasticity of demand and its relationship to revenue concepts (calculation required), a) Formulae to calculate and understand the relationship between: o total revenue o average revenue o marginal revenue

    2 objectives2 subtopics

    Costs

    b) Derivation of short-run cost curves from the assumption of diminishing marginal productivity, c) Relationship between short-run and long-run average cost curves, a) Formulae to calculate and understand the relationship between: o total cost o total fixed cost o total variable cost o average (total) cost o average fixed cost o average variable cost o marginal cost

    3 objectives3 subtopics

    Economies and diseconomies of scale

    b) Minimum efficient scale, a) Types of economies and diseconomies of scale, c) Distinction between internal and external economies of scale

    3 objectives3 subtopics

    Normal profits, supernormal profits and losses

    c) Short-run and long-run shut-down points: diagrammatic analysis, a) Condition for profit maximisation, b) Normal profit, supernormal profit and losses

    3 objectives3 subtopics

    Efficiency

    b) Productive efficiency, c) Dynamic efficiency, e) Efficiency/inefficiency in different market structures +2 more

    5 objectives5 subtopics

    Perfect competition

    c) Diagrammatic analysis, b) Profit maximising equilibrium in the short run and long run, a) Characteristics of perfect competition

    3 objectives3 subtopics

    Monopolistic competition

    c) Diagrammatic analysis, a) Characteristics of monopolistically competitive markets, b) Profit maximising equilibrium in the short run and long run

    3 objectives3 subtopics

    Oligopoly

    f) Types of price competition: o price wars o predatory pricing o limit pricing, e) Simple game theory: the prisoner's dilemma in a simple two firm/two outcome model, g) Types of non-price competition +4 more

    7 objectives7 subtopics

    Monopoly

    a) Characteristics of monopoly, c) Diagrammatic analysis, b) Profit maximising equilibrium +3 more

    6 objectives6 subtopics

    Monopsony

    b) Costs and benefits of a monopsony to firms, consumers, employees and suppliers, a) Characteristics and conditions for a monopsony to operate

    2 objectives2 subtopics

    Contestability

    a) Characteristics of contestable markets, d) Sunk costs and the degree of contestability, b) Implications of contestable markets for the behaviour of firms +1 more

    4 objectives4 subtopics

    Demand for labour

    a) Factors that influence the demand for labour, b) Demand for labour as a derived demand

    2 objectives2 subtopics

    Supply of labour

    b) Market failure in labour markets: the geographical and occupational mobility and immobility of labour, a) Factors that influence the supply of labour to a particular occupation

    2 objectives2 subtopics

    Wage determination in competitive and non-competitive markets

    b) Understanding of current labour market issues, a) Diagrammatic analysis of labour market equilibrium, d) The significance of the elasticity of demand for labour and the elasticity of supply of labour +1 more

    4 objectives4 subtopics

    Government intervention

    c) Government intervention to promote competition and contestability: o enhancing competition between firms through promotion of small business o deregulation o competitive tendering for government contracts o privatisation, b) Government intervention to control monopolies: o price regulation o profit regulation o quality standards o performance targets, a) Government intervention to control mergers +1 more

    4 objectives4 subtopics

    The impact of government intervention

    b) Limits to government intervention: o regulatory capture o asymmetric information, a) The impact of government intervention on: o prices o profit o efficiency o quality o choice

    2 objectives2 subtopics

    Globalisation

    c) Impacts of globalisation and global companies on individual countries, governments, producers and consumers, workers and the environment, b) Factors contributing to globalisation in the last 50 years, a) Characteristics of globalisation

    3 objectives3 subtopics

    Specialisation and trade

    b) Advantages and disadvantages of specialisation and trade in an international context, a) Absolute and comparative advantage (numerical and diagrammatic): assumptions and limitations relating to the theory of comparative advantage

    2 objectives2 subtopics

    Pattern of trade

    a) Factors influencing the pattern of trade between countries and changes in trade flows between countries: o comparative advantage o impact of emerging economies o growth of trading blocs and bilateral trading agreements o changes in relative exchange rates

    1 objectives

    Terms of trade

    a) Calculation of terms of trade, b) Factors influencing a country's terms of trade, c) Impact of changes in a country's terms of trade

    3 objectives3 subtopics

    Trading blocs and the World Trade Organisation (WTO)

    b) Costs and benefits of regional trade agreements, d) Possible conflicts between regional trade agreements and the WTO, c) Role of the WTO in trade liberalisation +1 more

    4 objectives4 subtopics

    Restrictions on free trade

    a) Reasons for restrictions on free trade, c) Impact of protectionist policies on consumers, producers, governments, living standards, equality, b) Types of restrictions on trade: o tariffs o quotas o subsidies to domestic producers o non-tariff barriers

    3 objectives3 subtopics

    Exchange rates

    d) Factors influencing floating exchange rates, e) Government intervention in currency markets through foreign currency transactions and the use of interest rates, f) Competitive devaluation/depreciation and its consequences +4 more

    7 objectives7 subtopics

    International competitiveness

    b) Factors influencing international competitiveness, a) Measures of international competitiveness: o relative unit labour costs o relative export prices, c) Significance of international competitiveness: o benefits of being internationally competitive o problems of being internationally uncompetitive

    3 objectives3 subtopics

    Absolute and relative poverty

    b) Measures of absolute poverty and relative poverty, c) Causes of changes in absolute poverty and relative poverty, a) Distinction between absolute poverty and relative poverty

    3 objectives3 subtopics

    Inequality

    c) Causes of income and wealth inequality within countries and between countries, e) Significance of capitalism for inequality, a) Distinction between wealth and income inequality +2 more

    5 objectives5 subtopics

    Measures of development

    b) The advantages and limitations of using the HDI to compare levels of development between countries and over time, a) The three dimensions of the Human Development Index (HDI) (education, health and living standards) and how they are measured and combined, c) Other indicators of development

    3 objectives3 subtopics

    Factors influencing growth and development

    a) Impact of economic factors in different countries: o primary product dependency o volatility of commodity prices o savings gap: Harrod-Domar model o foreign currency gap o capital flight o demographic factors o debt o access to credit and banking o infrastructure o education/skills o absence of property rights, b) Impact of non-economic factors in different countries

    2 objectives2 subtopics

    Strategies influencing growth and development

    c) Other strategies: o industrialisation: the Lewis model o development of tourism o development of primary industries o Fairtrade schemes o aid o debt relief, b) Interventionist strategies: o development of human capital o protectionism o managed exchange rates o infrastructure development o promoting joint ventures with global companies o buffer stock schemes, a) Market-orientated strategies: o trade liberalisation o promotion of FDI o removal of government subsidies o floating exchange rate systems o microfinance schemes o privatisation +1 more

    4 objectives4 subtopics

    Role of financial markets

    e) To provide a market for equities, c) To facilitate the exchange of goods and services, d) To provide forward markets in currencies and commodities +2 more

    5 objectives5 subtopics

    Market failure in the financial sector

    a) Consideration of: o asymmetric information o externalities o moral hazard o speculation and market bubbles o market rigging

    1 objectives

    Role of central banks

    a) Key functions of central banks: o implementation of monetary policy o banker to the government o banker to the banks – lender of last resort o role in regulation of the banking industry

    1 objectives

    Public expenditure

    a) Distinction between capital expenditure, current expenditure and transfer payments, c) The significance of differing levels of public expenditure as a proportion of GDP on: o productivity and growth o living standards o crowding out o level of taxation o equality, b) Reasons for the changing size and composition of public expenditure in a global context

    3 objectives3 subtopics

    Taxation

    a) Distinction between progressive, proportional and regressive taxes, b) The economic effects of changes in direct and indirect tax rates on other variables: o incentives to work o tax revenues: the Laffer curve o income distribution o real output and employment o the price level o the trade balance o FDI flows

    2 objectives2 subtopics

    Public sector finances

    f) The significance of the size of fiscal deficits and national debts, b) Distinction between a fiscal deficit and the national debt, a) Distinction between automatic stabilisers and discretionary fiscal policy +3 more

    6 objectives6 subtopics

    Macroeconomic policies in a global context

    c) Measures to control global companies' (transnationals') operations: o the regulation of transfer pricing o limits to government ability to control global companies, b) Use and impact of macroeconomic policies to respond to external shocks to the global economy, d) Problems facing policymakers when applying policies: o inaccurate information o risks and uncertainties o inability to control external shocks +1 more

    4 objectives4 subtopics

    Appendix 3: Quantitative skills

    QS 9: interpret, apply and analyse information in written, graphical tabular and numerical forms, QS 12: understand the meaning of seasonally adjusted figures, QS 11: understand composite indicators +9 more

    12 objectives12 subtopics

    Assessment Objectives

    AO3: Analyse issues within economics, showing an understanding of their impact on economic agents, AO1: Demonstrate knowledge of terms/concepts and theories/models to show an understanding of the behaviour of economic agents and how they are affected by and respond to economic issues, AO4: Evaluate economic arguments and use qualitative and quantitative evidence to support informed judgements relating to economic issues +1 more

    4 objectives4 subtopics

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