Specification points

Edexcel A-level Economics A 9EC0

393 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 Introduction to markets and market failure

1.1 Nature of economics
1.1.1 Economics as a social science
1.1.1a Thinking like an economist
1.1.1b The use of the ceteris paribus assumption in building models
1.1.1c The inability in economics to make scientific experiments
1.1.2 Positive and normative economic statements
1.1.2a Distinction between positive and normative economic statements
1.1.2b The role of value judgements in influencing economic decision making and policy
1.1.3 The economic problem
1.1.3a The problem of scarcity
1.1.3b The distinction between renewable and non-renewable resources
1.1.3c The importance of opportunity costs to economic agents (consumers, producers and government)
1.1.4 Production possibility frontiers
1.1.4a Using production possibility frontiers
1.1.4b Movements along and shifts in production possibility curves
1.1.4c The distinction between capital and consumer goods
1.1.5 Specialisation and the division of labour
1.1.5a Specialisation, the division of labour and Adam Smith
1.1.5b Specialisation and division of labour
1.1.5c Specialising to trade
1.1.5d Functions of money
1.1.6 Free market economies, mixed economy and command economy
1.1.6a The distinction between free market, mixed and command economies
1.1.6b Free market and command economies
1.1.6c The role of the state in a mixed economy
1.2 How markets work
1.2.1 Rational decision making
1.2.1a The underlying assumptions of rational economic decision making
1.2.2 Demand
1.2.2a Movements along and shifts of demand curves
1.2.2b Conditions of demand
1.2.2c Diminishing marginal utility
1.2.3 Price, income and cross elasticities of demand
1.2.3a Meaning of price, income and cross elasticities
1.2.3b Calculating elasticities of demand
1.2.3c Interpreting values of elasticities of demand
1.2.3d The factors influencing elasticities of demand
1.2.3e Significance of elasticities of demand
1.2.3f The relationship between price elasticity of demand and total revenue (including calculation)
1.2.4 Supply
1.2.4a Movements along and shifts of supply curves
1.2.4b Conditions of supply
1.2.5 Elasticity of supply
1.2.5a Price elasticity of supply
1.2.5b Calculating price elasticity of supply
1.2.5c Interpret numerical values of price elasticity of supply
1.2.5d Factors that influence price elasticity of supply
1.2.5e Short run, long run and elasticity of supply
1.2.6 Price determination
1.2.6a Equilibrium price and quantity and how they are determined
1.2.6b Excess supply and excess demand
1.2.6c The operation of market forces to eliminate excess demand and excess supply
1.2.6d Shifts in supply and demand and equilibrium
1.2.7 Price mechanism
1.2.7a Functions of the price mechanism to allocate resources
1.2.7b The price mechanism in different markets
1.2.8 Consumer and producer surplus
1.2.8a The distinction between consumer and producer surplus
1.2.8b Supply and demand diagrams for consumer and producer surplus
1.2.8c How changes in supply and demand might affect consumer and producer surplus
1.2.9 Indirect taxes and subsidies
1.2.9a Tax and subsidy effects in supply and demand analysis
1.2.10 Alternative views of consumer behaviour
1.2.10a The reasons why consumers may not behave rationally
1.3 Market failure
1.3.1 Types of market failure
1.3.1a Market failure
1.3.1b Externalities, public goods and information gaps
1.3.2 Externalities
1.3.2a Distinction between private costs, external costs and social costs
1.3.2b Distinction between private benefits, external benefits and social benefits
1.3.2c Diagram of external costs of production
1.3.2d Diagram of external benefits of consumption
1.3.2e Impact of externalities and intervention
1.3.3 Public goods
1.3.3a Public and private goods
1.3.3b Why public goods may not be provided by the private sector
1.3.4 Information gaps
1.3.4a The distinction between symmetric and asymmetric information
1.3.4b How imperfect market information may lead to a misallocation of resources
1.4 Government intervention
1.4.1 Government intervention in markets
1.4.1a Government intervention to correct market failure
1.4.1b Other methods of government intervention
1.4.2 Government failure
1.4.2a Government failure as a net welfare loss
1.4.2b Causes of government failure
1.4.2c Government failure in various markets

2 The UK economy – performance and policies

2.1 Measures of economic performance
2.1.1 Economic growth
2.1.1a Real GDP growth as a measure of economic growth
2.1.1b Real and nominal, total and per capita, value and volume
2.1.1c Other national income measures
2.1.1d Comparison of rates of growth between countries and over time
2.1.1e Purchasing power parities
2.1.1f Limitations of GDP comparisons
2.1.1g National happiness
2.1.2 Inflation
2.1.2a Inflation, deflation and disinflation
2.1.2b Calculating inflation with the CPI
2.1.2c The limitations of CPI in measuring the rate of inflation
2.1.2d The Retail Prices Index
2.1.2e Causes of inflation
2.1.2f The effects of inflation on consumers, firms, the government and workers
2.1.3 Employment and unemployment
2.1.3a Measures of unemployment
2.1.3b The distinction between unemployment and under-employment
2.1.3c Changes in employment, unemployment and inactivity
2.1.3d The causes of unemployment
2.1.3e The significance of migration and skills for employment and unemployment
2.1.3f The effects of unemployment on consumers, firms, workers, the government and society
2.1.4 Balance of payments
2.1.4a Components of the balance of payments
2.1.4b Current account deficits and surpluses
2.1.4c The relationship between current account imbalances and other macroeconomic objectives
2.1.4d The interconnectedness of economies through international trade
2.2 Aggregate demand (AD)
2.2.1 The characteristics of AD
2.2.1a Components of AD
2.2.1b The relative importance of the components of AD
2.2.1c The AD curve
2.2.1d Movements along and shifts of the AD curve
2.2.2 Consumption (C)
2.2.2a Disposable income and its influence on consumer spending
2.2.2b An understanding of the relationship between savings and consumption
2.2.2c Other influences on consumer spending
2.2.3 Investment (I)
2.2.3a Distinction between gross and net investment
2.2.3b Influences on investment
2.2.4 Government expenditure (G)
2.2.4a The main influences on government expenditure
2.2.5 Net trade (X-M)
2.2.5a The main influences on the (net) trade balance
2.3 Aggregate supply (AS)
2.3.1 Characteristics of aggregate supply
2.3.1a The AS curve
2.3.1b The distinction between movement along, and a shift of, the AS curve
2.3.1c Short-run and long-run aggregate supply
2.3.2 Short-run aggregate supply
2.3.2a Factors influencing short-run AS
2.3.3 Long-run aggregate supply
2.3.3a Different shapes of the long-run AS curve
2.3.3b Factors influencing long-run AS
2.4 National income
2.4.1 National income
2.4.1a The circular flow of income
2.4.1b The distinction between income and wealth
2.4.2 Injections and withdrawals
2.4.2a Effects of injections and withdrawals on the circular flow
2.4.3 Equilibrium levels of real national output
2.4.3a The concept of equilibrium real national output
2.4.3b AD/AS diagrams and equilibrium
2.4.4 The multiplier
2.4.4a The multiplier ratio
2.4.4b The multiplier process
2.4.4c Effects of the multiplier on the economy
2.4.4d Understanding of marginal propensities and their effects on the multiplier
2.4.4e Calculations of the multiplier using the formulae 1/(1-MPC) and 1/MPW, where MPW=MPS+MPT+MPM
2.4.4f The significance of the multiplier for shifts in AD
2.5 Economic growth
2.5.1 Causes of growth
2.5.1a Factors which could cause economic growth
2.5.1b The distinction between actual and potential growth
2.5.1c The importance of international trade for (export-led) economic growth
2.5.2 Output gaps
2.5.2a Distinction between actual growth rates and long-term trends in growth rates
2.5.2b Positive and negative output gaps and measurement
2.5.2c Illustrating an output gap
2.5.3 Trade (business) cycle
2.5.3a The trade cycle
2.5.3b Characteristics of a boom
2.5.3c Characteristics of a recession
2.5.4 The impact of economic growth
2.5.4a Benefits and costs of economic growth
2.6 Macroeconomic objectives and policies
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
2.6.1e Balanced government budget
2.6.1f Protection of the environment
2.6.1g Greater income equality
2.6.2 Demand-side policies
2.6.2a Distinction between monetary and fiscal policy
2.6.2b Monetary policy instruments
2.6.2c Fiscal policy instruments
2.6.2d Distinction between government budget (fiscal) deficit and surplus
2.6.2e Distinction between, and examples of, direct and indirect taxation
2.6.2f Illustrating demand-side policies
2.6.2g The role of the Bank of England
2.6.2h Demand-side policies in the Depression and 2008 crisis
2.6.2i Strengths and weaknesses of demand-side policies
2.6.3 Supply-side policies
2.6.3a Distinction between market-based and interventionist methods
2.6.3b Market-based and interventionist policies
2.6.3c Illustrating supply-side policies
2.6.3d Strengths and weaknesses of supply-side policies
2.6.4 Conflicts and trade-offs between objectives and policies
2.6.4a Potential conflicts and trade-offs between the macroeconomic objectives
2.6.4b Short-run Phillips curve
2.6.4c Potential policy conflicts and trade-offs

3 Business behaviour and the labour market

3.1 Business growth
3.1.1 Sizes and types of firms
3.1.1a Reasons why some firms tend to remain small and why others grow
3.1.1b Significance of the divorce of ownership from control
3.1.1c Distinction between public and private sector organisations
3.1.1d Distinction between profit and not-for-profit organisations
3.1.2 Business growth
3.1.2a How businesses grow
3.1.2b Organic growth and types of integration
3.1.2c Constraints on business growth
3.1.3 Demergers
3.1.3a Reasons for demergers
3.1.3b Impact of demergers on businesses, workers and consumers
3.2 Business objectives
3.2.1 Business objectives
3.2.1a Different business objectives and reasons for them
3.2.1b Diagrams and formulae to illustrate the different business objectives
3.3 Revenues, costs and profits
3.3.1 Revenue
3.3.1a Total, average and marginal revenue
3.3.1b Price elasticity of demand and its relationship to revenue concepts (calculation required)
3.3.2 Costs
3.3.2a Total, average and marginal revenue
3.3.2b Derivation of short-run cost curves from the assumption of diminishing marginal productivity
3.3.2c Relationship between short-run and long-run average cost curves
3.3.3 Economies and diseconomies of scale
3.3.3a Types of economies and diseconomies of scale
3.3.3b Minimum efficient scale
3.3.3c Distinction between internal and external economies of scale
3.3.4 Normal profits, supernormal profits and losses
3.3.4a Condition for profit maximisation
3.3.4b Normal profit, supernormal profit and losses
3.3.4c Short-run and long-run shut-down points
3.4 Market structures
3.4.1 Efficiency
3.4.1a Allocative efficiency
3.4.1b Productive efficiency
3.4.1c Dynamic efficiency
3.4.1d X-inefficiency
3.4.1e Efficiency/inefficiency in different market structures
3.4.2 Perfect competition
3.4.2a Characteristics of perfect competition
3.4.2b Profit maximising equilibrium in the short run and long run
3.4.2c Diagrammatic analysis
3.4.3 Monopolistic competition
3.4.3a Characteristics of monopolistically competitive markets
3.4.3b Profit maximising equilibrium in the short run and long run
3.4.3c Diagrammatic analysis
3.4.4 Oligopoly
3.4.4a Characteristics of oligopoly
3.4.4b Calculation of n-firm concentration ratios and their significance
3.4.4c Reasons for collusive and non-collusive behaviour
3.4.4d Overt and tacit collusion; cartels and price leadership
3.4.4e Simple game theory
3.4.4f Types of price competition
3.4.4g Types of non-price competition
3.4.5 Monopoly
3.4.5a Characteristics of monopoly
3.4.5b Profit maximising equilibrium
3.4.5c Diagrammatic analysis
3.4.5d Third degree price discrimination
3.4.5e Costs and benefits of monopoly to firms, consumers, employees and suppliers
3.4.5f Natural monopoly
3.4.6 Monopsony
3.4.6a Characteristics and conditions for a monopsony to operate
3.4.6b Costs and benefits of a monopsony to firms, consumers, employees and suppliers
3.4.7 Contestability
3.4.7a Characteristics of contestable markets
3.4.7b Implications of contestable markets for the behaviour of firms
3.4.7c Types of barrier to entry and exit
3.4.7d Sunk costs and the degree of contestability
3.5 Labour market
3.5.1 Demand for labour
3.5.1a Factors that influence the demand for labour
3.5.1b Demand for labour as a derived demand
3.5.2 Supply of labour
3.5.2a Factors that influence the supply of labour to a particular occupation
3.5.2b Market failure in labour markets
3.5.3 Wage determination in competitive and non-competitive markets
3.5.3a Diagrammatic analysis of labour market equilibrium
3.5.3b Current labour market issues
3.5.3c Government intervention in the labour market
3.5.3d Elasticity of demand and supply of labour
3.6 Government intervention
3.6.1 Government intervention
3.6.1a Government intervention to control mergers
3.6.1b Government intervention to control monopolies
3.6.1c Government intervention to promote competition and contestability
3.6.1d Government intervention to protect suppliers and employees
3.6.2 The impact of government intervention
3.6.2a Impact of government intervention on firms
3.6.2b Limits to government intervention

4 A global perspective

4.1 International economics
4.1.1 Globalisation
4.1.1a Characteristics of globalisation
4.1.1b Factors contributing to globalisation in the last 50 years
4.1.1c Impacts of globalisation
4.1.2 Specialisation and trade
4.1.2a Absolute and comparative advantage (numerical and diagrammatic)
4.1.2b Advantages and disadvantages of specialisation and trade in an international context
4.1.3 Pattern of trade
4.1.3a Factors influencing the pattern of trade
4.1.4 Terms of trade
4.1.4a Calculation of terms of trade
4.1.4b Factors influencing a country's terms of trade
4.1.4c Impact of changes in a country's terms of trade
4.1.5 Trading blocs and the World Trade Organisation (WTO)
4.1.5a Types of trading blocs (regional trade agreements and bilateral trade agreements)
4.1.5b Costs and benefits of regional trade agreements
4.1.5c Role of the WTO in trade liberalisation
4.1.5d Possible conflicts between regional trade agreements and the WTO
4.1.6 Restrictions on free trade
4.1.6a Reasons for restrictions on free trade
4.1.6b Types of restrictions on trade
4.1.6c Impact of protectionist policies on consumers, producers, governments, living standards, equality
4.1.7 Balance of payments
4.1.7a Components of the balance of payments
4.1.7b Causes of deficits and surpluses on the current account
4.1.7c Measures to reduce a country's imbalance on the current account
4.1.7d Significance of global trade imbalances
4.1.8 Exchange rates
4.1.8a Exchange rate systems
4.1.8b Distinction between revaluation and appreciation of a currency
4.1.8c Distinction between devaluation and depreciation of a currency
4.1.8d Factors influencing floating exchange rates
4.1.8e Government intervention in currency markets
4.1.8f Competitive devaluation/depreciation and its consequences
4.1.8g Impact of changes in exchange rates
4.1.9 International competitiveness
4.1.9a Measures of international competitiveness
4.1.9b Factors influencing international competitiveness
4.1.9c Significance of international competitiveness
4.2 Poverty and inequality
4.2.1 Absolute and relative poverty
4.2.1a Distinction between absolute poverty and relative poverty
4.2.1b Measures of absolute poverty and relative poverty
4.2.1c Causes of changes in absolute poverty and relative poverty
4.2.2 Inequality
4.2.2a Distinction between wealth and income inequality
4.2.2b Measurements of income inequality
4.2.2c Causes of income and wealth inequality within countries and between countries
4.2.2d Impact of economic change and development on inequality
4.2.2e Significance of capitalism for inequality
4.3 Emerging and developing economies
4.3.1 Measures of development
4.3.1a Dimensions of the Human Development Index
4.3.1b Advantages and limitations of the HDI
4.3.1c Other indicators of development
4.3.2 Factors influencing growth and development
4.3.2a Impact of economic factors in different countries
4.3.2b Impact of non-economic factors in different countries
4.3.3 Strategies influencing growth and development
4.3.3a Market-orientated strategies
4.3.3b Interventionist strategies
4.3.3c Other strategies
4.3.3d Awareness of the role of international institutions and non-government organisations (NGOs)
4.4 The financial sector
4.4.1 Role of financial markets
4.4.1a To facilitate saving
4.4.1b To lend to businesses and individuals
4.4.1c To facilitate the exchange of goods and services
4.4.1d To provide forward markets in currencies and commodities
4.4.1e To provide a market for equities
4.4.2 Market failure in the financial sector
4.4.2a Asymmetric information, moral hazard, bubbles and market rigging
4.4.3 Role of central banks
4.4.3a Key functions of central banks
4.5 Role of the state in the macroeconomy
4.5.1 Public expenditure
4.5.1a Distinction between capital expenditure, current expenditure and transfer payments
4.5.1b Changing size and composition of public expenditure
4.5.1c Significance of public expenditure levels
4.5.2 Taxation
4.5.2a Distinction between progressive, proportional and regressive taxes
4.5.2b Effects of changes in tax rates
4.5.3 Public sector finances
4.5.3a Distinction between automatic stabilisers and discretionary fiscal policy
4.5.3b Distinction between a fiscal deficit and the national debt
4.5.3c Distinction between structural and cyclical deficits
4.5.3d Factors influencing the size of fiscal deficits
4.5.3e Factors influencing the size of national debts
4.5.3f The significance of the size of fiscal deficits and national debts
4.5.4 Macroeconomic policies in a global context
4.5.4a Macroeconomic policies in different countries
4.5.4b Policies responding to external shocks
4.5.4c Measures to control global companies' (transnationals') operations
4.5.4d Problems facing policymakers when applying policies