Economics B

    Pearson Edexcel
    A-Level

    Specification: 9EB0

    The PEARSON-EDEXCEL A-Level Economics B specification covers 88 topics with 332 learning objectives (9EB0). 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 B 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

    332

    Objectives

    0

    Exam Tips

    0

    Pitfalls

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    Key Features

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    About Pearson Edexcel A-Level Economics B

    Pearson Edexcel A-Level Economics B is a theme-based course that explores how markets, the economy, and government policy interact in the real world. You will study four core themes: markets, consumers and firms; the wider economic environment; the global economy; and making markets work. The specification emphasises the application of economic theory to current issues, helping you understand the decisions made by consumers, businesses, and governments.

    The course is structured to develop your analytical and evaluative skills, with a strong focus on using economic models and data to support arguments. You will examine topics such as competition, inequality, globalisation, and environmental sustainability. The qualification is linear, meaning you will sit all exams at the end of your two-year study, and it is assessed entirely through written examinations.

    Assessment Structure

    This qualification is assessed through three written exam papers, each worth 33.3% of the final grade. Paper 1 (Markets, Consumers and Firms) is 2 hours and 30 minutes and includes multiple-choice, short-answer, and extended-writing questions. Paper 2 (The Wider Economic Environment) is also 2 hours and 30 minutes and follows a similar format. Paper 3 (The Global Economy) is 2 hours and 30 minutes and includes a pre-released context and extended essays. All papers are marked out of 100, giving a total of 300 marks for the A-Level.

    Why Choose Pearson Edexcel?

    • Edexcel Economics B is highly relevant to real-world issues, with a focus on current economic events and data, making it engaging for students who want to understand the economy beyond theory.
    • The course offers a clear and logical structure through its four themes, allowing students to build their knowledge progressively and apply it to different contexts.
    • Edexcel provides a wide range of support materials, including past papers, mark schemes, and examiner reports, which are invaluable for exam preparation and understanding assessment requirements.

    Frequently Asked Questions

    Specification Topics

    88 topics

    The economic problem

    a) The problem of scarcity (where there are unlimited wants and finite resources), c) The importance of opportunity costs to consumers, producers and government, b) Choices and potential trade-offs

    3 objectives3 subtopics

    Business objectives

    b) Other objectives: o survival o market share o cost efficiency o return on investment o employee welfare o customer satisfaction o social objectives, a) Different business objectives and reasons for them: o profit maximisation o sales maximisation o satisficing

    2 objectives2 subtopics

    Stakeholders (economic agents) and their objectives

    b) Stakeholder objectives, a) Stakeholders (economic agents), c) Stakeholder conflicts +1 more

    4 objectives4 subtopics

    Role of an entrepreneur in the economy

    c) Selling the output for more than the cost of the inputs (adding value), b) Making decisions to operate, expand and develop a business, a) Creative destruction (organising factors of production to create and set up an enterprise)

    3 objectives3 subtopics

    Entrepreneurial motives

    a) Profit as an incentive, b) Non-financial motives: ethical stance, social entrepreneurship, independence, home working

    2 objectives2 subtopics

    Factors of production

    b) Capital, land and labour: o premises o equipment o raw materials o managers and employees, a) Enterprise

    2 objectives2 subtopics

    Specialisation

    a) Division of labour: advantages and disadvantages to employers and employees, b) Specialisation: advantages and disadvantages to the firm

    2 objectives2 subtopics

    The wider economic environment

    a) Implications for firms of changes in: o interest rates o exchange rates o taxation o unemployment o inflation

    1 objectives

    Demand

    a) Consumer objectives and decisions, c) The distinction between movements along a demand curve and shifts of a demand curve, d) The factors that may cause a shift in the demand curve: o changes in the prices of substitutes and complementary goods o changes in real incomes o changes in tastes and fashions o advertising and branding o changes in size and age distribution of the population +1 more

    4 objectives4 subtopics

    Supply

    d) The factors that may cause a shift in the supply curve: o changes in the costs of production o the introduction of new technology o indirect taxes o subsidies o changes in the number of firms in an industry o external shocks, b) The supply curve, a) Producer objectives and decisions +1 more

    4 objectives4 subtopics

    Price determination

    b) The use of supply and demand diagrams to depict excess supply and excess demand, d) The use of the supply and demand model 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 +2 more

    5 objectives5 subtopics

    Price mechanism

    b) How firms respond to a change in demand, a) Functions of the price mechanism to allocate resources: rationing, incentives, signalling, d) Potential market growth +1 more

    4 objectives4 subtopics

    Understanding the consumer

    b) Limitations of market research, sample size and bias, c) Categorising consumers: market segmentation, a) Primary and secondary market research data (quantitative and qualitative) used to quantify likely demand and gain insight into consumer behaviour

    3 objectives3 subtopics

    The competition

    a) Market positioning: market mapping and market maps, e) How firms decide on price and level of output, c) Product differentiation +3 more

    6 objectives6 subtopics

    Role of banks in the economy

    b) Role of banks in providing credit, c) Interest rates and collateral, a) Channelling savings towards investment

    3 objectives3 subtopics

    Risk and liability

    a) The meaning of risk, b) Implications of limited and unlimited liability

    2 objectives2 subtopics

    Types and sources of credit and the impact of credit within the economy

    a) Types of credit: o loans o overdrafts o trade credit, b) Sources of credit: o banks o other firms, d) Other sources of finance: o owner’s capital: personal savings o retained profit o sale of assets o individual investors o online collaborative funding +2 more

    5 objectives5 subtopics

    Market failure and externalities

    e) Weaknesses of the market economy: some markets fail because of the existence of external costs, leading to under/over production or consumption, a) Private costs, external costs and social costs, d) Strength of the market economy: markets work well when the private and social benefits exceed (or are equal to) the private and social costs +2 more

    5 objectives5 subtopics

    Government intervention and failure

    b) Methods of government intervention: o regulation o legislation o indirect taxation o grants and subsidies o voluntary agreements, a) Purpose of intervention with reference to market failure in various contexts, c) Causes of government failure: o distortion of price signals o unintended consequences o excessive administrative costs o information gaps +1 more

    4 objectives4 subtopics

    Revenue and costs

    a) Calculation of sales volume and sales revenue, c) Calculation of percentage change, b) Calculation of average, fixed, variable and total costs

    3 objectives3 subtopics

    The relationship between revenue and costs

    a) Contribution: selling price – variable cost per unit, b) Break-even point: total fixed costs + total variable costs = total sales revenue, d) Margin of safety +2 more

    5 objectives5 subtopics

    Profit and loss

    a) Profit as an incentive in a competitive market: market entry and exit, e) How firms increase profit, c) Statement of comprehensive income (profit and loss account) +2 more

    5 objectives5 subtopics

    Business survival and cash flow

    c) Forecasting and interpreting cash flow, a) Distinction between profit and cash flow, d) Use of a cash-flow forecast to identify credit requirements and minimise risk +1 more

    4 objectives4 subtopics

    Growth

    a) Objectives of growth: o to achieve economies of scale (internal and external) o increased market power over consumers and suppliers o increased market share and brand recognition o increased profitability, c) The role of corporate culture, b) Problems arising from growth: o diseconomies of scale o internal communication o potential skills shortages

    3 objectives3 subtopics

    Methods of growth

    b) Horizontal, vertical and conglomerate integration, a) Organic and inorganic growth

    2 objectives2 subtopics

    Research and development (R&D) and innovation

    d) Role of state funding, a) Competitive advantage through innovation, e) Product life cycle and extension strategies +2 more

    5 objectives5 subtopics

    How the digital economy affects markets and firms

    d) Impact on markets and firms: o impact on costs, prices, profit and loss o firm creation and destruction in a new business environment, a) Market information in the digital economy: o price comparison sites o viral marketing o social media, c) The demand-side: o satisfying consumers with the long tail o wider geographical markets +1 more

    4 objectives4 subtopics

    How small firms compete

    a) Small-firm survival in competitive markets: o product differentiation and unique selling points (USPs) o flexibility in responding to customer needs o customer service o targeting niche markets o achieving competitive advantage through relationships with stakeholders

    1 objectives

    Price elasticity of demand (PED)

    c) Interpretation of numerical values of price elasticity of demand, a) The significance of price elasticity of demand to firms (in both niche and mass markets) in terms of implications for pricing, e) The relationship between price elasticity of demand and total revenue +2 more

    5 objectives5 subtopics

    Competing on price

    a) Pricing strategies: o cost plus (calculating mark up on unit cost) o price skimming o penetration o predatory o competitive o psychological, b) Factors that determine the most appropriate pricing strategy for a particular situation: o number of USPs/amount of differentiation o price elasticity of demand o amount of competition o strength of brand o stage in the product life cycle o costs and the need to make a profit, c) Changes in pricing to reflect social trends (online sales and price comparison sites)

    3 objectives3 subtopics

    Types of non-price competition

    b) Devising appropriate marketing approaches, a) The impact of marketing on the demand curve: o product differentiation o advertising and other promotional methods o distribution methods

    2 objectives2 subtopics

    Income elasticity of demand (YED)

    c) Interpretation of numerical values of income elasticity of demand, a) The significance of income elasticity of demand to firms, b) Calculation of income elasticity of demand +1 more

    4 objectives4 subtopics

    Productivity

    a) Productivity (output per unit of input in a given time period): o factors influencing productivity o link between productivity and competitiveness o productivity and wages o productivity and economic growth, b) Distinction between labour and capital intensive production

    2 objectives2 subtopics

    Capacity utilisation

    d) Ways of improving capacity utilisation, c) Implications of under- and over-utilisation of capacity, b) Capacity utilisation: o current output (divided by) maximum possible output (as a percentage) +1 more

    4 objectives4 subtopics

    Efficiency and competitiveness using lean production

    a) Quality: control, assurance, Total Quality Management (TQM), d) Competitive advantage from lean production, b) Continuous improvement (Kaizen) +1 more

    4 objectives4 subtopics

    Impact on costs and sales revenue

    a) Impact on average costs, c) Competitive advantage of short product development lead times, b) Minimising waste of resources

    3 objectives3 subtopics

    Globalisation

    b) Factors contributing to globalisation in the last 50 years: o trade liberalisation o capital market liberalisation o political change resulting in the opening up of China and the former Soviet Union o reduced cost of transport and communications o increased significance of global (transnational) companies, a) Characteristics of globalisation: o increased investment flows o world trade rising as a proportion of world Gross Domestic Product (GDP) o increased migration

    2 objectives2 subtopics

    Developed, emerging and developing economies

    b) Indicators of growth: o GDP per capita o literacy o health o Human Development Index (HDI), a) Growth rate of the UK and BRIC (Brazil, Russia, India and China) economies since 2000, d) Mean and median incomes +1 more

    4 objectives4 subtopics

    International trade

    b) Trading blocs, e) Impact of cheap imports on standards of living, d) Imports and exports: visibles and invisibles +2 more

    5 objectives5 subtopics

    Exchange rates

    d) Interpretation of effective exchange rates, a) Changes in exchange rates, b) Impact of changing exchange rates on firms +1 more

    4 objectives4 subtopics

    The economic cycle

    b) Characteristics of a boom, c) Characteristics of a recession, a) Understanding of the economic cycle +1 more

    4 objectives4 subtopics

    Circular flow of income, expenditure and output

    b) The impact of injections into and withdrawals from the circular flow of income, d) Factors influencing AS: o changes in the cost of inputs and resources o changes in productivity, c) Factors influencing AD: components C + I + G + (X-M) +1 more

    4 objectives4 subtopics

    Inflation

    a) Inflation, deflation and disinflation, c) Real and nominal values, constant and current prices, b) Interpret price indices (RPI and CPI) and the rate of inflation +3 more

    6 objectives6 subtopics

    Employment and unemployment

    d) The impact of unemployment on firms and individuals, a) Employment, underemployment and unemployment, b) Measures of unemployment: o the claimant count o the International Labour Organisation (ILO) measure +1 more

    4 objectives4 subtopics

    Possible macroeconomic objectives

    b) Low unemployment, d) Balance of payments equilibrium on current account, a) Economic growth +1 more

    4 objectives4 subtopics

    Policy instruments

    d) Exchange rate policy: o floating rate, c) Supply-side policies: o taxes, benefits, education and training, grants and subsidies infrastructure, a) Fiscal policy: o adjusting levels of government spending and taxation to affect aggregate demand +2 more

    5 objectives5 subtopics

    Potential policy conflicts and trade-offs

    b) Economic growth and negative externalities, d) How different macroeconomic perspectives influence policy decisions, c) The issues governments face in managing the macro- economy +2 more

    5 objectives5 subtopics

    Growing economies

    e) Calculating and interpreting index numbers, b) Implications of economic growth for individuals and firms: o trade and rationalisation opportunities for firms o shifting employment patterns, d) Conversion of nominal to real values +2 more

    5 objectives5 subtopics

    Trade and growth

    b) The role of specialisation and increasing specialisation by country, c) Trade liberalisation and economic growth, d) Foreign direct investment (FDI) and link to growth +1 more

    4 objectives4 subtopics

    Trading blocs

    a) Trade creation and trade diversion, c) Impact on firms of trading blocs, b) Expansion of trading blocs: o EU and the single market o ASEAN o NAFTA +1 more

    4 objectives4 subtopics

    Trade policy and trade negotiations

    a) Protectionism: o tariffs and import quotas (with diagrammatic representation) o other trade barriers o government legislation and domestic subsidies, b) International trade negotiations: o role of G20 o role of international institutions (World Trade Organisation (WTO), International Monetary Fund (IMF), World Bank) o bilateral trading agreements

    2 objectives2 subtopics

    Exchange rate changes

    a) Impact of changes in exchange rates and the possible effects on: o the current account and the balance of payments o economic growth; firms o employment/unemployment o the rate of inflation o FDI flows, b) The Eurozone

    2 objectives2 subtopics

    Conditions that prompt trade

    c) Possibility of offshoring and outsourcing, b) Pull factors: o economies of scale o risk spreading, a) Push factors: o saturated markets o competition +2 more

    5 objectives5 subtopics

    Assessing the potential of different economies

    b) Factors influencing the location of production sites: o costs of production o skills and availability of labour force o infrastructure o location in trade bloc o government incentives o ease of doing business o political stability o natural resources o likely return on investment, a) Factors influencing expansion into a market: o levels and growth of disposable income o ease of doing business o infrastructure o political stability o exchange rate

    2 objectives2 subtopics

    Responding to global demand

    a) Globalisation vs glocalisation, b) Different approaches to global markets: o domestic/ethnocentric o mixed/geocentric o international/polycentric, c) Price and non-price competition in global markets o adapting marketing strategies for global markets +1 more

    4 objectives4 subtopics

    Demand-side factors in global markets

    c) How firms respond to these demand-side factors o adapting marketing strategies for niche and mass markets, b) Information and communication factors: o language, unintended meanings, inappropriate/inaccurate translations, a) Cultural/social factors: o cultural differences o different tastes

    3 objectives3 subtopics

    The impact of multinational corporations (MNCs)

    a) Impact of MNCs on the local economy: o local labour, wages, working conditions and job creation o local firms o the local community and environment, b) Impact of MNCs on the national economy: o economic growth o FDI flows o balance of payments o technology and skills transfer o consumers o business culture o tax revenues and transfer pricing

    2 objectives2 subtopics

    Ethical issues

    a) Stakeholder conflicts, e) Marketing considerations: o misleading product labelling o inappropriate promotional activities, b) Pay and working conditions +2 more

    5 objectives5 subtopics

    Controlling MNCs

    a) Factors to consider: o political influence o legal control o pressure groups o social media, b) Self-regulation

    2 objectives2 subtopics

    Employment patterns

    a) Growth of the global labour force, b) Structural change, c) Interdependence of labour markets

    3 objectives3 subtopics

    Wage rates

    d) Impact of trade unions and professional bodies, c) Impact of global competition, recession and redundancies, b) The importance of skills, training and education +1 more

    4 objectives4 subtopics

    Minimum wage legislation

    b) Skill shortages and their impact on international competitiveness, a) Minimum wages in developing and developed countries, c) Migration: o within economies o between economies +1 more

    4 objectives4 subtopics

    Poverty and inequality

    a) Absolute and relative poverty, c) Measures of inequality: o Gini coefficient o Lorenz curve (diagrammatic analysis), b) Measures of poverty: o national measures o international measures

    3 objectives3 subtopics

    Reducing poverty

    c) Poverty reduction policies, a) Economic development and economic growth, b) International aid and improvements in welfare; non- governmental organisations (NGOs)

    3 objectives3 subtopics

    The impact of inequality on economic agents

    b) On firms: connections between low income and low productivity, a) On individuals, c) On the economy

    3 objectives3 subtopics

    Re-distribution of income and wealth

    a) The distinction between income and wealth, c) Taxation and the provision of services, b) Incentives and the poverty trap

    3 objectives3 subtopics

    Spectrum of competition

    c) The impact of market structure on pricing strategies and consumers, d) Non-price competition, b) How the model of perfect competition helps to explain how markets work +2 more

    5 objectives5 subtopics

    Barriers to entry

    d) Economies of scale and their impact on cost and price, a) Contestability and ease of entry, c) The impact of barriers to entry on market structure +1 more

    4 objectives4 subtopics

    Oligopoly

    c) Tacit agreement, d) Price discrimination, b) Competition in an oligopoly; interdependence and price stability +1 more

    4 objectives4 subtopics

    Business objectives and pricing decisions

    a) Calculate average cost, average revenue and profit, b) Calculate marginal cost and marginal revenue, d) The impact of objectives on pricing strategies +1 more

    4 objectives4 subtopics

    Productive and allocative efficiency

    c) Increasing productivity to reduce average cost through greater efficiency by improving: o technology o human capital (skills training and education) o the quality of management, a) The distinction between allocative efficiency and productive efficiency, b) The significance of the margin; opportunity costs, trade- offs and allocative efficiency +2 more

    5 objectives5 subtopics

    Market failure

    b) The implications of market failure in the business world for economic agents and governments, a) Significance of market power: o cartels, collusion, restrictive practices and tacit agreement o monopsony power o natural monopolies o power in the labour market

    2 objectives2 subtopics

    Business regulation

    e) Impact of EU competition policy, b) Regulating natural monopolies, c) Protecting consumers +3 more

    6 objectives6 subtopics

    Arguments for and against regulation

    a) The benefits of regulation, b) The costs of regulation

    2 objectives2 subtopics

    Market failure in society

    f) Consequences of environmental change, a) The consequences of under-provision and under- consumption of merit and other goods and services, d) Factor immobility (occupational and geographical) +3 more

    6 objectives6 subtopics

    Externalities

    b) The impact on society of charging prices that do not reflect total internal and external costs, a) Private, external and social costs and benefits, c) Environmental externalities

    3 objectives3 subtopics

    Policies to deal with market failure

    a) The provision of public and merit goods, indirect taxation of demerit goods, tradable pollution permits, provision of information, legislation and regulation, b) The impact of these policies on the economy and society, long- and short-term

    2 objectives2 subtopics

    The AD/AS model

    a) Changes in Aggregate Demand (AD), b) Changes in Aggregate Supply (AS), f) How the AS/AD model sheds light on the economy as a whole +3 more

    6 objectives6 subtopics

    Demand-side policies

    a) Distinction between monetary and fiscal policy o fiscal policy: government spending and taxation (direct and indirect) o monetary policy: the role of the Bank of England and the Bank of England's Monetary Policy Committee o interest rates o asset purchases to increase the money supply (quantitative easing), e) How inflation and unemployment can be controlled, f) Time lags involved +5 more

    8 objectives8 subtopics

    Supply-side policies

    b) Market-based and interventionist policies to: o increase incentives o promote competition o reform the labour market o improve the skills and quality of the labour force o improve the infrastructure, d) Strengths and weaknesses of supply-side policies, c) The use of AD/AS diagrams to illustrate supply-side policies +2 more

    5 objectives5 subtopics

    The impact of macroeconomic policies

    a) The possible impact of macroeconomic policies, c) Identifying criteria for success and evaluating effectiveness, b) Comparing alternative approaches

    3 objectives3 subtopics

    Risks and uncertainty

    a) The difference between risk and uncertainty, d) The role of insurance in business, b) The impact of shocks +1 more

    4 objectives4 subtopics

    The role of the financial sector

    d) To facilitate the exchange of goods and services, a) To mobilise savings for lending to firms and individuals, g) To provide a market for equities +4 more

    7 objectives7 subtopics

    The role of the central bank

    d) Banker to the banks – lender of last resort, b) The implementation of monetary policy to control inflation, a) The role of the Monetary Policy Committee in setting the official interest (base) rate +1 more

    4 objectives4 subtopics

    The Global Financial Crisis

    a) Contributing factors: o sub-prime mortgages o moral hazard (too big to fail) o collapse of lending to businesses o speculation and market bubbles o the role of organisational culture, c) The impact of the financial sector on economic agents and governments, b) The role of banking regulation

    3 objectives3 subtopics

    Appendix 3: Quantitative skills

    QS 4: construct and interpret a range of standard graphical forms, QS 2: calculate, use and understand percentages, percentage changes and percentage point changes, QS 5: calculate and interpret index numbers +6 more

    9 objectives9 subtopics

    Appendix 4: Accounting ratios

    Profit for the year (net profit) margin: (Profit for the year (net profit) / Revenue) x 100%, Gross profit margin: (Gross Profit / Revenue) x 100%, Operating profit margin: (Operating Profit / Revenue) x 100%

    3 objectives3 subtopics

    Assessment Objectives

    AO3: Analyse issues within economics, showing an understanding of their impact on economic agents, AO2: Apply knowledge and understanding to various economic contexts to show how economic agents are affected by and respond to economic issues, 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 +1 more

    4 objectives4 subtopics

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