Theme 1 is the foundation of microeconomics. At A-level it is examined mainly in Paper 1 (Markets & business behaviour), combined with Theme 3. Every answer is ma…
Economics is the study of how scarce resources are allocated to satisfy unlimited human wants. This sub-theme sets up the core ideas — scarcity, choice, opportuni…
A market is any place where buyers and sellers meet to trade. This sub-theme is the engine room of the course: demand, supply, elasticity and the price mechanism…
Markets are powerful — but they don't always get it right. Market failure is when the free market, left alone, leads to a misallocation of resources, so society's…
If markets fail, governments can step in to correct the misallocation of resources. But intervention is no magic fix — done badly it can make things worse, which…
The command word tells you how much analysis and evaluation a question wants. Match your answer to it:
Knowing the economics is only half the battle — marks are won and lost on technique. This section shows you how to turn what you've learned into top-band answers.
Match the depth to the marks. The higher the tariff, the more evaluation matters:
Attempt these under timed conditions, then mark yourself against the guidance in the next section. Treat the diagram questions as compulsory — they're where easy…
Edexcel uses levels-based marking on longer questions, so these are indicative — credit any valid, well-developed economics. The key is the structure: knowledge →…
Unit 2 is an IAS unit worth 50% of the IAS and 25% of the full IAL. One written paper, 1 hour 45 minutes, 80 marks. Every answer is judged against four Assessment…
Before we can fix an economy we have to measure it. This sub-theme covers the four headline indicators — growth, inflation, unemployment and the balance of paymen…
Aggregate demand (AD) is the total planned spending in an economy. Together with aggregate supply it is the model you'll use for almost every macro question — so…
Aggregate supply (AS) is the total output firms are willing to produce at each price level. The short run and long run behave very differently — and the shape of…
Unit 3 is an IA2 unit worth 50% of the IA2 and 25% of the full IAL. One written paper, 2 hours, 80 marks. Every answer is judged against four Assessment Objectives:
Before analysing how firms behave, we need to know what kinds of firms exist, how and why they grow, and what they are actually trying to achieve — because a firm…
This is the engine room of Unit 3. Get the revenue and cost curves rock-solid here, because every market-structure diagram in 3.3 is built from them.
The heart of Unit 3. The number and size of firms in a market shapes how they price, compete and perform. We move from the most competitive structure (perfect com…
Unit 4 is an IA2 unit worth 50% of the IA2 and 25% of the full IAL. One written paper, 2 hours, 80 marks. Every answer is judged against four Assessment Objectives:
The world's economies have become deeply interconnected over the last half-century. This sub-theme sets the scene for the whole unit: what globalisation is, what…
Why do countries trade at all? The answer is comparative advantage. This sub-theme covers the theory of trade, the terms of trade, trading blocs, and the case for…
How a country pays its way in the world, and how the price of its currency is set. This sub-theme links the balance of payments, exchange rates and international…
National income flows around the economy in a circle. Understanding what adds to that flow, what leaks out of it, and how a single change ripples through it (the…
Wages are just a price — the price of labour — set by demand and supply. But labour markets have their own quirks: demand is "derived", supply depends on far more…
Growth doesn't benefit everyone equally. This sub-theme distinguishes poverty from inequality, shows how each is measured — including the Lorenz curve and Gini co…