Specification points

Edexcel A-level Economics B 9EB0

427 points in 4 topics, with Edexcel's codes and titles.

Codes and titles are read by a script from Edexcel's published specification and have not been checked by a person. What each point covers is in the specification itself: Edexcel’s specification.

1 Markets, consumers and firms

1.1 Scarcity, choice and potential conflicts
1.1.1 The economic problem
1.1.1a The problem of scarcity (where there are unlimited wants and finite resources)
1.1.1b Choices and potential trade-offs
1.1.1c The importance of opportunity costs to consumers, producers and government
1.1.2 Business objectives
1.1.2a Different business objectives and reasons for them
1.1.2b Other objectives
1.1.3 Stakeholders (economic agents) and their objectives
1.1.3a Stakeholders (economic agents)
1.1.3b Stakeholder objectives
1.1.3c Stakeholder conflicts
1.1.3d Corporate social responsibility
1.2 Enterprise, business and the economy
1.2.1 Role of an entrepreneur in the economy
1.2.1a Creative destruction
1.2.1b Making decisions to operate, expand and develop a business
1.2.1c Adding value
1.2.2 Entrepreneurial motives
1.2.2a Profit as an incentive
1.2.2b Non-financial motives
1.2.3 Factors of production
1.2.3a Enterprise
1.2.3b Capital, land and labour
1.2.4 Specialisation
1.2.4a Division of labour
1.2.4b Specialisation
1.2.5 The wider economic environment
1.2.5a Effects of changes in the wider economy on firms
1.3 Introducing the market
1.3.1 Demand
1.3.1a Consumer objectives and decisions
1.3.1b The demand curve
1.3.1c Movements along and shifts of demand curves
1.3.1d The factors that may cause a shift in the demand curve
1.3.2 Supply
1.3.2a Producer objectives and decisions
1.3.2b The supply curve
1.3.2c Movements along and shifts of supply curves
1.3.2d The factors that may cause a shift in the supply curve
1.3.3 Price determination
1.3.3a Equilibrium price and quantity and how they are determined
1.3.3b Excess supply and excess demand
1.3.3c The operation of market forces to eliminate excess demand and excess supply
1.3.3d Shifts in supply and demand and equilibrium
1.3.3e The limitations of the supply and demand model and its predictions
1.3.4 Price mechanism
1.3.4a Functions of the price mechanism to allocate resources
1.3.4b How firms respond to a change in demand
1.3.4c The price mechanism in the context of different types of markets
1.3.4d Potential market growth
1.3.5 Understanding the consumer
1.3.5a Uses of primary and secondary market research
1.3.5b Limitations of market research, sample size and bias
1.3.5c Categorising consumers
1.3.6 The competition
1.3.6a Market positioning
1.3.6b Competitive advantage of a product or service
1.3.6c Product differentiation
1.3.6d Adding value to products/services
1.3.6e How firms decide on price and level of output
1.3.6f Nature and range of markets
1.4 The role of credit in the economy
1.4.1 Role of banks in the economy
1.4.1a Channelling savings towards investment
1.4.1b Role of banks in providing credit
1.4.1c Interest rates and collateral
1.4.2 Risk and liability
1.4.2a The meaning of risk
1.4.2b Implications of limited and unlimited liability
1.4.3 Types, sources and impact of credit
1.4.3a Types of credit
1.4.3b Sources of credit
1.4.3c Other types of finance
1.4.3d Other sources of finance
1.4.3e Challenges in obtaining credit
1.5 Market failure and government intervention
1.5.1 Market failure and externalities
1.5.1a Private costs, external costs and social costs
1.5.1b Private benefits, external benefits and social benefits
1.5.1c Costs and benefits from the production and consumption of goods and services
1.5.1d Strength of the market economy
1.5.1e Weaknesses of the market economy
1.5.2 Government intervention and failure
1.5.2a Purpose of intervention with reference to market failure in various contexts
1.5.2b Methods of government intervention
1.5.2c Causes of government failure
1.5.2d Government failure in various markets
1.6 Revenue, costs, profits and cash
1.6.1 Revenue and costs
1.6.1a Calculation of sales volume and sales revenue
1.6.1b Calculation of average, fixed, variable and total costs
1.6.1c Calculation of percentage change
1.6.2 The relationship between revenue and costs
1.6.2a Contribution
1.6.2b Break-even point
1.6.2c Break-even using contribution
1.6.2d Margin of safety
1.6.2e Limitations of break-even analysis
1.6.3 Profit and loss
1.6.3a Profit as an incentive in a competitive market
1.6.3b How firms calculate profit
1.6.3c Statement of comprehensive income (profit and loss account)
1.6.3d How firms measure profitability
1.6.3e How firms increase profit
1.6.4 Business survival and cash flow
1.6.4a Distinction between profit and cash flow
1.6.4b Importance of cash flow for business survival
1.6.4c Forecasting and interpreting cash flow
1.6.4d Cash-flow forecasts and credit requirements

2 The wider economic environment

2.1 Business growth and competitive advantage
2.1.1 Growth
2.1.1a Objectives of growth
2.1.1b Problems arising from growth
2.1.1c The role of corporate culture
2.1.2 Methods of growth
2.1.2a Organic and inorganic growth
2.1.2b Horizontal, vertical and conglomerate integration
2.1.3 Research and development (R&D) and innovation
2.1.3a Competitive advantage through innovation
2.1.3b Incentive to increase market power
2.1.3c Product and process innovation
2.1.3d Role of state funding
2.1.3e Product life cycle and extension strategies
2.1.4 How the digital economy affects markets and firms
2.1.4a Market information in the digital economy
2.1.4b The supply-side
2.1.4c The demand-side
2.1.4d Impact on markets and firms
2.1.5 How small firms compete
2.1.5a Small-firm survival in competitive markets
2.2 Firms, consumers and elasticities of demand
2.2.1 Price elasticity of demand (PED)
2.2.1a Price elasticity of demand and pricing
2.2.1b Calculation of price elasticity of demand
2.2.1c Interpretation of numerical values of price elasticity of demand
2.2.1d The factors influencing price elasticity of demand
2.2.1e The relationship between price elasticity of demand and total revenue
2.2.2 Competing on price
2.2.2a Pricing strategies
2.2.2b Factors that determine the most appropriate pricing strategy for a particular situation
2.2.2c Pricing and social trends
2.2.3 Types of non-price competition
2.2.3a The impact of marketing on the demand curve
2.2.3b Devising appropriate marketing approaches
2.2.4 Income elasticity of demand (YED)
2.2.4a The significance of income elasticity of demand to firms
2.2.4b Calculation of income elasticity of demand
2.2.4c Interpretation of numerical values of income elasticity of demand
2.2.4d The factors influencing income elasticity of demand
2.3 Productive efficiency
2.3.1 Productivity
2.3.1a Productivity (output per unit of input in a given time period)
2.3.1b Distinction between labour and capital intensive production
2.3.2 Capacity utilisation
2.3.2a Full capacity and spare capacity
2.3.2b Capacity utilisation
2.3.2c Implications of under- and over-utilisation of capacity
2.3.2d Ways of improving capacity utilisation
2.3.3 Efficiency and competitiveness using lean production
2.3.3a Quality
2.3.3b Continuous improvement (Kaizen)
2.3.3c Just in time (JIT) management of stock
2.3.3d Competitive advantage from lean production
2.3.4 Impact on costs and sales revenue
2.3.4a Impact on average costs
2.3.4b Minimising waste of resources
2.3.4c Competitive advantage of short product development lead times
2.4 Life in a global economy
2.4.1 Globalisation
2.4.1a Characteristics of globalisation
2.4.1b Factors contributing to globalisation in the last 50 years
2.4.2 Developed, emerging and developing economies
2.4.2a Growth of the UK and BRIC economies
2.4.2b Indicators of growth
2.4.2c Characteristics of developed (mature), emerging and developing economies
2.4.2d Mean and median incomes
2.4.3 International trade
2.4.3a Specialisation and international trade
2.4.3b Trading blocs
2.4.3c Trade and growth
2.4.3d Imports and exports
2.4.3e Impact of cheap imports on standards of living
2.4.4 Exchange rates
2.4.4a Changes in exchange rates
2.4.4b Impact of changing exchange rates on firms
2.4.4c Interpretation of exchange rate data
2.4.4d Interpretation of effective exchange rates
2.5 The economic cycle
2.5.1 The economic cycle
2.5.1a What the economic cycle is
2.5.1b Characteristics of a boom
2.5.1c Characteristics of a recession
2.5.1d Implications for firms of fluctuations in economic activity
2.5.2 Circular flow of income, expenditure and output
2.5.2a The circular flow of income
2.5.2b Injections and withdrawals
2.5.2c Factors influencing AD
2.5.2d Factors influencing aggregate supply
2.5.3 Inflation
2.5.3a Inflation, deflation and disinflation
2.5.3b Price indices and inflation
2.5.3c Real and nominal values, constant and current prices
2.5.3d Causes of inflation
2.5.3e The impact of inflation on firms
2.5.3f The impact of inflation on individuals
2.5.4 Employment and unemployment
2.5.4a Employment, underemployment and unemployment
2.5.4b Measures of unemployment
2.5.4c The causes of unemployment
2.5.4d The impact of unemployment on firms and individuals
2.6 Introduction to macroeconomic policy
2.6.1 Possible macroeconomic objectives
2.6.1a Economic growth
2.6.1b Low unemployment
2.6.1c Low and stable rate of inflation
2.6.1d Balance of payments equilibrium on current account
2.6.2 Policy instruments
2.6.2a Fiscal policy
2.6.2b Monetary policy
2.6.2c Supply-side policies
2.6.2d Exchange rate policy
2.6.3 Potential policy conflicts and trade-offs
2.6.3a Inflation and unemployment
2.6.3b Economic growth and negative externalities
2.6.3c The issues governments face in managing the macro-economy
2.6.3d How different macroeconomic perspectives influence policy decisions
2.6.3e Effects of policy instruments

3 The global economy

3.1 Globalisation
3.1.1 Growing economies
3.1.1a Growing economic power of emerging economies
3.1.1b Implications of economic growth for individuals and firms
3.1.1c Rising incomes
3.1.1d Conversion of nominal to real values
3.1.1e Calculating and interpreting index numbers
3.1.2 Trade and growth
3.1.2a Increasing trade liberalisation
3.1.2b The role of specialisation and increasing specialisation by country
3.1.2c Trade liberalisation and economic growth
3.1.2d Foreign direct investment (FDI) and link to growth
3.1.3 Trading blocs
3.1.3a Trade creation and trade diversion
3.1.3b Expansion of trading blocs
3.1.3c Impact on firms of trading blocs
3.1.3d Growing interdependence
3.1.4 Trade policy and trade negotiations
3.1.4a Protectionism
3.1.4b International trade negotiations
3.1.5 Exchange rate changes
3.1.5a Effects of exchange rate changes
3.1.5b The Eurozone
3.2 Economic factors in business expansion
3.2.1 Conditions that prompt trade
3.2.1a Push factors
3.2.1b Pull factors
3.2.1c Possibility of offshoring and outsourcing
3.2.1d Extending the product life cycles by selling in multiple markets
3.2.1e Raising capacity utilisation
3.2.2 Assessing the potential of different economies
3.2.2a Factors influencing expansion into a market
3.2.2b Factors influencing the location of production sites
3.3 Impact of globalisation on global companies
3.3.1 Responding to global demand
3.3.1a Globalisation vs glocalisation
3.3.1b Different approaches to global markets
3.3.1c Competition in global markets
3.3.1d Branding and differentiation in global markets
3.3.2 Demand-side factors in global markets
3.3.2a Cultural/social factors
3.3.2b Information and communication factors
3.3.2c Responding to demand-side factors
3.4 Impact of globalisation on local and national economies
3.4.1 The impact of multinational corporations (MNCs)
3.4.1a Impact of MNCs on the local economy
3.4.1b Impact of MNCs on the national economy
3.4.2 Ethical issues
3.4.2a Stakeholder conflicts
3.4.2b Pay and working conditions
3.4.2c Environmental considerations
3.4.2d Supply chain considerations
3.4.2e Marketing considerations
3.4.3 Controlling MNCs
3.4.3a Factors in controlling multinationals
3.4.3b Self-regulation
3.5 Global labour markets
3.5.1 Employment patterns
3.5.1a Growth of the global labour force
3.5.1b Structural change
3.5.1c Interdependence of labour markets
3.5.2 Wage rates
3.5.2a Factors that influence the supply of and demand for labour
3.5.2b The importance of skills, training and education
3.5.2c Impact of global competition, recession and redundancies
3.5.2d Impact of trade unions and professional bodies
3.5.3 Minimum wage legislation
3.5.3a Minimum wages in developing and developed countries
3.5.3b Skill shortages and their impact on international competitiveness
3.5.3c Migration
3.5.3d Inequality and incentives
3.6 Inequality and re-distribution
3.6.1 Poverty and inequality
3.6.1a Absolute and relative poverty
3.6.1b Measures of poverty
3.6.1c Measures of inequality
3.6.2 Reducing poverty
3.6.2a Economic development and economic growth
3.6.2b International aid and improvements in welfare; non-governmental organisations (NGOs)
3.6.2c Poverty reduction policies
3.6.3 The impact of inequality on economic agents
3.6.3a On individuals
3.6.3b On firms
3.6.3c On the economy
3.6.4 Re-distribution of income and wealth
3.6.4a The distinction between income and wealth
3.6.4b Incentives and the poverty trap
3.6.4c Taxation and the provision of services

4 Making markets work

4.1 Competition and market power
4.1.1 Spectrum of competition
4.1.1a Characteristics of monopoly, oligopoly, imperfect and perfect competition
4.1.1b How the model of perfect competition helps to explain how markets work
4.1.1c The impact of market structure on pricing strategies and consumers
4.1.1d Non-price competition
4.1.1e The limitations of the model of perfect competition
4.1.2 Barriers to entry
4.1.2a Contestability and ease of entry
4.1.2b Barriers to entry
4.1.2c The impact of barriers to entry on market structure
4.1.2d Economies of scale and their impact on cost and price
4.1.3 Oligopoly
4.1.3a Concentration ratios
4.1.3b Competition in an oligopoly; interdependence and price stability
4.1.3c Tacit agreement
4.1.3d Price discrimination
4.1.4 Business objectives and pricing decisions
4.1.4a Average cost, average revenue and profit
4.1.4b Marginal cost and marginal revenue
4.1.4c Link between marginal cost and revenue and contribution
4.1.4d The impact of objectives on pricing strategies
4.1.5 Productive and allocative efficiency
4.1.5a The distinction between allocative efficiency and productive efficiency
4.1.5b The significance of the margin; opportunity costs, trade-offs and allocative efficiency
4.1.5c Increasing productivity to reduce average cost through greater efficiency by improving
4.1.5d Market orientation
4.1.5e How markets interact with one another
4.2 Market power and market failure
4.2.1 Market failure
4.2.1a Significance of market power
4.2.1b Implications of market failure
4.2.2 Business regulation
4.2.2a Promoting competition
4.2.2b Regulating natural monopolies
4.2.2c Protecting consumers
4.2.2d The work of the Competition and Markets Authority
4.2.2e Impact of EU competition policy
4.2.2f Employee protection
4.2.3 Arguments for and against regulation
4.2.3a The benefits of regulation
4.2.3b The costs of regulation
4.3 Market failure across the economy
4.3.1 Market failure in society
4.3.1a Under-provision of merit goods
4.3.1b Positive and negative externalities
4.3.1c Over-consumption of demerit goods
4.3.1d Factor immobility (occupational and geographical)
4.3.1e Imperfect and asymmetric information
4.3.1f Consequences of environmental change
4.3.2 Externalities
4.3.2a Private, external and social costs and benefits
4.3.2b Prices not reflecting external costs
4.3.2c Environmental externalities
4.3.3 Policies to deal with market failure
4.3.3a Policies to correct market failure
4.3.3b Impact of market failure policies
4.4 Macroeconomic policies and impact on firms and individuals
4.4.1 The AD/AS model
4.4.1a Changes in Aggregate Demand (AD)
4.4.1b Changes in Aggregate Supply (AS)
4.4.1c Full capacity output
4.4.1d Impact of changes in AD and/or AS on inflation and unemployment
4.4.1e The multiplier effect
4.4.1f How the AS/AD model sheds light on the economy as a whole
4.4.2 Demand-side policies
4.4.2a Distinction between monetary and fiscal policy
4.4.2b Impact of changes in aggregate demand
4.4.2c The use of AD/AS diagrams to illustrate demand-side policies
4.4.2d How investment, job creation and economic growth can be encouraged
4.4.2e How inflation and unemployment can be controlled
4.4.2f Time lags involved
4.4.2g Strengths and weaknesses of demand-side policies
4.4.2h Potential policy conflicts and trade-offs facing policy-makers when applying policies
4.4.3 Supply-side policies
4.4.3a Distinction between market-based and interventionist methods
4.4.3b Market-based and interventionist supply-side policies
4.4.3c The use of AD/AS diagrams to illustrate supply-side policies
4.4.3d Strengths and weaknesses of supply-side policies
4.4.3e Potential policy conflicts and trade offs facing policy-makers when applying policies
4.4.4 The impact of macroeconomic policies
4.4.4a The possible impact of macroeconomic policies
4.4.4b Comparing alternative approaches
4.4.4c Identifying criteria for success and evaluating effectiveness
4.5 Risk and the financial sector
4.5.1 Risks and uncertainty
4.5.1a The difference between risk and uncertainty
4.5.1b The impact of shocks
4.5.1c Exchange rate risk and forward markets
4.5.1d The role of insurance in business
4.5.2 The role of the financial sector
4.5.2a To mobilise savings for lending to firms and individuals
4.5.2b To lend to business for investment in working capital
4.5.2c To lend to individuals
4.5.2d To facilitate the exchange of goods and services
4.5.2e Assessing creditor risk
4.5.2f To provide forward markets in currencies and commodities
4.5.2g To provide a market for equities
4.5.3 The role of the central bank
4.5.3a The Monetary Policy Committee
4.5.3b The implementation of monetary policy to control inflation
4.5.3c Regulation of the banking industry
4.5.3d Banker to the banks – lender of last resort
4.5.4 The Global Financial Crisis
4.5.4a Contributing factors
4.5.4b The role of banking regulation
4.5.4c The impact of the financial sector on economic agents and governments