Markets and the price system - Eduqas A-Level Economics (A520) overview
An overview of the markets-and-the-price-system module of Eduqas A-Level Economics (A520), covering scarcity and choice, the production possibility frontier, demand and supply and the price mechanism, the four elasticities, consumer and producer surplus, and rational decision-making, and how this microeconomic foundation is examined.
Reviewed by: AI editorial process; not yet individually human-reviewed
Jump to a section
The markets-and-the-price-system module of Eduqas A-Level Economics (specification A520) is the microeconomic foundation of the course. It builds the toolkit (scarcity, choice, demand and supply, elasticity and surplus) that the rest of microeconomics relies on. This page maps the specification statements and how they are examined.
The statements in this module
- Scarcity, choice and the production possibility frontier
- The basic economic problem of finite resources and infinite wants, opportunity cost as the next best alternative forgone, the four factors of production and their rewards, the PPF as a model of choice, opportunity cost and growth, and the difference between positive and normative statements.
- Demand, supply and the price mechanism
- The determinants of demand and supply, movements versus shifts, market equilibrium and disequilibrium (surpluses and shortages), and the rationing, signalling and incentive functions of the price mechanism.
- Elasticities of demand and supply
- Price, income and cross elasticity of demand and price elasticity of supply: how each is calculated and interpreted, what determines it, and the link between PED and total revenue.
- Consumer and producer surplus
- Their definition and measurement as areas on a demand-and-supply diagram, how each changes when price or the curves shift, and their use in welfare analysis.
- Resource allocation and rational decision-making
- Free-market, command and mixed economies, allocative and productive efficiency, the law of diminishing marginal utility and how thinking at the margin underpins rational choice, and the behavioural critiques of the rational-agent model.
How this module is examined
Eduqas Economics is a two-year linear course with three papers at the end. This microeconomic foundation is sampled across all of them: Component 1 (Economic Principles) uses multiple-choice and short structured questions, Component 2 (Exploring Economic Behaviour) uses data-response questions including calculations, and Section A of Component 3 offers a choice of microeconomics essays marked by levels of response. Higher-mark questions reward accurate diagrams and balanced evaluation.
How to study this module
- Master the diagrams. Demand and supply, the PPF and the surplus areas recur constantly; practise drawing and labelling them accurately and at speed.
- Drill the elasticity formulas. Be able to calculate and interpret PED, YED, XED and PES under timed conditions, and link PED to total revenue.
- Distinguish movements from shifts. This is one of the most penalised errors; always check whether the cause is the good's own price or a non-price determinant.
- Use real examples. Energy prices, housing supply, tobacco duty and behavioural nudges make application marks easy.
Work through the statements
Each statement has its own focused answer page with worked exam questions and cross-links: scarcity, choice and the production possibility frontier; demand, supply and the price mechanism; elasticities of demand and supply; consumer and producer surplus; and resource allocation and rational decision-making.
For the official specification
Eduqas publishes the full specification (A520), past papers and mark schemes at eduqas.co.uk. Always revise from the current specification and Eduqas's own past papers, because the multiple-choice format of Component 1 and the levels-of-response mark schemes are board-specific.
Sources & how we know this
- Eduqas A Level Economics Specification (A520) — Eduqas (2015)