Evaluation
Edexcel A-Level Economics A 9EC0
The Nature of Economics
Topic overviewEconomics as a social sciencePositive and normative economic statementsThe economic problemWhat a production possibility frontier showsShifts in the PPF, and capital against consumer goodsThe division of labour and its advantagesSpecialisation for trade between countriesThe four functions of moneyFree market, command and mixed economiesThe advantages and disadvantages of the free marketCommand and mixed economies assessed
How Markets Work
Topic overviewRational decision makingDemandPrice, income and cross elasticity: formulae and valuesInterpreting income and cross elasticity of demandWhat determines the elasticity of demandUsing elasticities: taxes, subsidies and business planningElasticity and total revenueSupplyPrice elasticity of supply and its valuesWhat determines elasticity of supply, and the short and long runPrice determinationPrice mechanismConsumer and producer surplusIndirect taxes and the incidence of a taxSubsidies and how their benefit is sharedAlternative views of consumer behaviour
Market Failure
Government Intervention
Measures of Economic Performance
Topic overviewMeasuring growth: real GDP, GDP per capita and GNIPurchasing power parity and the limitations of GDPNational wellbeing and the Easterlin paradoxInflation, deflation and how the CPI measures themThe limitations of the CPI, and the RPIDemand-pull, cost-push and monetary causes of inflationThe effects of inflationMeasuring employment, unemployment and inactivityThe causes of unemployment, migration and skillsThe effects of unemploymentThe components of the current accountCurrent account deficits, surpluses and global imbalances
Aggregate Demand
Aggregate Supply
National Income
Topic overviewThe circular flow of incomeThe distinction between income and wealthInjections, withdrawals and the equilibrium conditionWhat counts as an injection and a withdrawalMacroeconomic equilibrium and shifts in AD and ASThe shape of AS, demand-pull inflation and stagflationThe multiplier processMarginal propensities to consume, save, tax and importCalculating the multiplier and why its size matters
Economic Growth
Topic overviewWhat causes economic growthActual against potential growth, and export-led growthTrend growth and positive and negative output gapsIdentifying an output gap on an AD/AS diagramThe four phases of the trade cycle, and the boomRecession, recovery and the output gapThe impact of economic growth
Macroeconomic Objectives and Policies
Topic overviewPossible macroeconomic objectivesMonetary policy: interest rates and quantitative easingFiscal policy: spending, taxation and the budgetDemand-side policy on an AD/AS diagramThe Bank of England, and policy in the 1930s and 2008The strengths and weaknesses of demand-side policyMarket-based and interventionist supply-side policiesLabour market, skills and infrastructure policiesThe strengths and weaknesses of supply-side policyConflicts between growth, inflation and the current accountThe Phillips curve and the trade-offs in a policy mix
Business Growth
Business Objectives
Revenues, Costs and Profits
Topic overviewTotal, average and marginal revenueRevenue, elasticity and the revenue-maximising outputTotal, fixed, variable, average and marginal costWhy short-run cost curves take their shapeThe long-run average cost curve and returns to scaleTypes of economies and diseconomies of scaleInternal and external economies of scaleNormal profit, supernormal profit and lossesThe short-run and long-run shut-down points
Market Structures
Topic overviewEfficiencyThe assumptions of perfect competition and its revenue curvesPerfect competition: equilibrium and efficiencyThe characteristics of monopolistic competitionMonopolistic competition: short-run and long-run equilibriumExcess capacity and efficiency in monopolistic competitionThe characteristics of oligopoly and concentration ratiosCollusive and non-collusive behaviourGame theory, price and non-price competitionThe characteristics of monopoly and its equilibriumThird degree price discriminationThe costs and benefits of monopoly, and natural monopolyWhat monopsony is and where its power comes fromThe costs and benefits of monopsonyContestable markets and hit-and-run competitionBarriers to entry and exitSunk costs and the degree of contestability
The Labour Market
Topic overviewDemand for labourWhat determines the supply of labourGeographical and occupational immobility of labourWage determination in competitive and monopsony marketsCurrent issues in the UK labour marketMinimum and maximum wages, and public sector payThe elasticity of demand for and supply of labour
Government Intervention in Markets
International Economics
Topic overviewWhat globalisation is and what has driven itThe winners and losers from globalisationAbsolute and comparative advantageThe assumptions and limitations of comparative advantageThe gains and costs of international specialisationPattern of tradeTerms of tradeTypes of trading bloc and the hierarchy of integrationTrade creation, trade diversion and the costs of trading blocsThe World Trade OrganisationWhy governments restrict trade, and the instruments usedThe effects of protectionismBalance of payments in a global contextExchange rate systems, and appreciation against revaluationWhat moves a floating rate, and how governments interveneThe Marshall-Lerner condition and the J-curve effectMeasuring competitiveness: unit labour costs and export pricesWhat determines competitiveness, and the cost of losing it
Poverty and Inequality
Emerging and Developing Economies
Topic overviewThe Human Development Index and its three dimensionsThe limits of the HDI, and other development indicatorsPrimary product dependency, the savings gap and Harrod-DomarPopulation, debt, financial exclusion and infrastructureGovernance, corruption, conflict and geographyMarket-orientated strategies: trade liberalisation and FDIInterventionist strategies: human capital and protectionismInfrastructure, joint ventures and buffer stock schemesThe Lewis model, tourism, primary industries and FairtradeAid, debt relief, the World Bank, the IMF and NGOs
The Financial Sector
The Role of the State in the Macroeconomy
Topic overviewCapital, current and transfer spending, and what drives itThe effects of public expenditure, and crowding outProgressive, proportional and regressive taxesThe Laffer curve and the effects of tax changesAutomatic stabilisers, deficits and the national debtWhat drives deficits and debt, and why their size mattersReducing fiscal deficits and national debtPolicies to reduce poverty and inequalityMonetary, exchange rate and supply-side policy across countriesDirect controls, and why policy works differently elsewhereWhat an external shock is, and the kinds that occurFiscal, monetary and supply-side responses to a shockPolicy lags and the constraints on respondingMeasures to control global companies' (transnationals') operationsProblems facing policymakers when applying policies
The Labour Market
- 7 subtopics
- 21 things to know
- Papers 1 and 3
What The Labour Market covers
Covers how wages and employment are set: the demand for and supply of labour, immobility and the market failure it causes, wage determination under competition and monopsony, and the elasticity of both sides.
Where it is assessed
Papers 1 and 3
Markets and business behaviour, then the synoptic paper.
Check the Pearson Edexcel specification ↗The 7 subtopics
Each one has its own page.
- Demand for labourRecall questions on labour as a derived demand, marginal revenue product, and the factors that shift the demand curve.Open →
- What determines the supply of labourRecall questions on wages, conditions, barriers to entry, training requirements, the size of the working population and migration.Open →
- Geographical and occupational immobility of labourRecall questions on what causes each kind of immobility, why it is a market failure, and the unemployment that results.Open →
- Wage determination in competitive and monopsony marketsRecall questions on how the wage is set in a competitive market, how a monopsonist depresses it, and what a trade union changes.Open →
- Current issues in the UK labour marketZero-hours contracts and the Employment Rights Act 2025, the gig economy and the Uber ruling, changes in self-employment, wage stagnation since 2008, in-work poverty and the National Living Wage, inactivity through long-term sickness, the end of EU free movement, and whether flexible work benefits the economy.Open →
- Minimum and maximum wages, and public sector payRecall questions on the effect of a wage floor above equilibrium, how public sector pay is set, and the policies used to address immobility.Open →
- The elasticity of demand for and supply of labourRecall questions on what makes each side of the market more or less elastic, and what that means for wages and employment.Open →
What you need to know
Answer each one before you reveal it.
Your recallNot started
Evaluation
What makes demand for labour more elastic?
Evaluation
If capital and labour are complementary factors, what happens to labour demand when a firm increases its capital investment?
Key term
How do working conditions affect the supply of labour to an occupation?
Key term
How do net migration flows influence the supply of labour to particular occupations?
Key term
What is geographical mobility of labour?
Key term
What is occupational mobility of labour?
Key term
What is bilateral monopoly in a labour market?
Key term
Define the elasticity of demand for labour.
Key term
In a competitive labour market, how is the wage rate determined?
Key term
What is a minimum wage?
Process
Through what mechanisms may public sector wages be set?
Key term
How does an increase in the wage rate typically affect the quantity of labour demanded, ceteris paribus?
Key term
How does the wage rate offered in a particular occupation affect the supply of labour to that occupation?
Key term
Explain how occupational immobility of labour causes market failure.
Key term
Explain why the supply curve of labour in a competitive market slopes upward.
Key term
What is in-work poverty?
Process
How is the National Living Wage used to tackle low pay in the UK?
Evaluation
Evaluate whether the growth of flexible work such as zero-hours contracts and gig work benefits the UK economy.
Key term
Why does occupational immobility make a minimum wage more likely to cost jobs?
Key term
Define the elasticity of supply of labour.
Take The Labour Market further
The same content, four other ways.
Commonly confused
Pairs that lose marks when they are blurred together.
Geographical immobility vs Occupational immobility
Geographical immobility: the difficulty workers face in moving between regions to take up work. Occupational immobility: the difficulty workers face in moving between types of job for want of the right skills.
A monopsony employer vs A trade union
A monopsony employer: a sole buyer of labour, which can set a wage below the value of what the worker produces. A trade union: a collective seller of labour, which bargains to raise the wage above the competitive level.
Derived demand vs Marginal revenue product
Derived demand: demand for a factor that follows from demand for the product it helps to make. Marginal revenue product: the addition to revenue from employing one further unit of a factor.
Questions from this topic
Each one with the model answer underneath.
- 1
What does it mean to say that the demand for labour is a derived demand?
Model answer
It means the demand for labour arises not from wanting workers themselves, but from the demand for the goods or services those workers produce.
- 2
If consumer demand for smartphones increases, what happens to the demand for workers in smartphone factories and why?
Model answer
Demand for workers increases because firms need more labour to produce the additional smartphones consumers want, illustrating that labour demand is derived from product demand.
- 3
How does an increase in the wage rate typically affect the quantity of labour demanded, ceteris paribus?
Model answer
Higher wages increase production costs, which typically reduces the quantity of labour demanded.
- 4
Why does higher labour productivity increase employer willingness to hire workers?
Model answer
More productive workers generate greater output per unit cost, making each worker more valuable to the firm and increasing demand for labour.
- 5
Explain how an increase in the price of a firm's final product affects its demand for labour.
Model answer
Higher product prices raise the marginal revenue product of labour, meaning each worker generates more revenue, which increases the firm's demand for workers.
- 6
How might a fall in the price of capital equipment affect a firm's demand for labour?
Model answer
Cheaper capital may lead firms to substitute machinery for workers, reducing the demand for labour.
What is inside Levo
Six ways to work the same material.
The Labour Market revision questions
- What does The Labour Market cover in Edexcel A-Level Economics A?
- 7 subtopics: demand for labour, what determines the supply of labour, geographical and occupational immobility of labour, wage determination in competitive and monopsony markets, current issues in the uk labour market, minimum and maximum wages, and public sector pay and the elasticity of demand for and supply of labour. Each one has its own page with questions and model answers.
- How is The Labour Market organised?
- By the Edexcel 9EC0 specification, subtopic by subtopic, so it matches the order you are taught it in.
Every question in The Labour Market, on a schedule.
Attempt a question from memory, write the correct version, then attempt it again. Levo records the jump between your first attempt and your last, and brings each question back on the day you are due to forget it.
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