Specification points

Edexcel AS Economics A 8EC0

204 points in 2 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 elasticity
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 as a measure of inflation
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