Edexcel A-Level Economics Themes 1–2

Draw demand and supply curves and distinguish movements along them from shifts caused by non-price determinants.

Use demand and supply diagrams to determine market equilibrium and analyse how market changes affect price, quantity, and consumer and producer surplus.

Calculate and interpret price elasticity of demand and income elasticity of demand, including their implications for revenue and types of goods.

Calculate and interpret price elasticity of supply and explain how time, spare capacity, stocks, and production conditions affect it.

Use marginal social and private cost-benefit diagrams to identify externalities, welfare loss, and overproduction or underproduction.

Explain how public goods and information gaps cause missing markets or resource misallocation.

Use indirect-tax and subsidy diagrams to analyse prices, quantities, stakeholder effects, government finances, and welfare.

Evaluate price controls, regulation, state provision, information measures, and tradable pollution permits, including the risk of government failure.

Calculate and interpret nominal GDP, real GDP, GDP per capita, and consumer-price inflation while recognising their measurement limitations.

Interpret unemployment, the current account of the balance of payments, income distribution, and development indicators as evidence of economic performance.

Explain changes in aggregate demand using its components, the circular flow of income, injections and withdrawals, and the multiplier process.

Distinguish short-run from long-run aggregate supply and use AD–AS diagrams to analyse changes in real output and the price level.

Use PPF and AD–AS diagrams to distinguish actual from potential growth, identify output gaps, and explain stages of the economic cycle.

Trace how fiscal, monetary, and supply-side policies affect aggregate demand, aggregate supply, inflation, unemployment, growth, and the current account.

Plan an Edexcel Economics response that applies a diagram or calculation, develops a linked chain of analysis, and reaches a contextual, balanced judgement.