Start with the fundamentals. Learn how people, businesses and governments make decisions, explore microeconomics and macroeconomics, and test your knowledge with an interactive 100-question exam.
Economics studies how individuals, businesses and governments allocate limited resources to satisfy competing needs and wants.
Resources are limited, but human wants are unlimited. This fundamental problem forces people and societies to make choices.
Every choice involves giving something up. Opportunity cost is the value of the next best alternative forgone when a decision is made.
Different economic systems answer these questions in different ways.
Microeconomics examines individual markets and decision-makers: consumers, workers and firms.
Macroeconomics examines the economy as a whole, including economic growth, inflation, unemployment and international trade.
Learn these concepts before moving into more advanced economic analysis.
Demand is the quantity of a good or service consumers are willing and able to buy at different prices over a given period.
A change in the good's own price causes a movement along the demand curve. Changes in income, tastes or the prices of related goods can shift the demand curve.
Supply is the quantity producers are willing and able to sell at different prices over a given period.
A change in the good's own price causes a movement along the supply curve. A change in production costs can shift the whole curve.
Equilibrium occurs where quantity demanded equals quantity supplied. The market-clearing price is the equilibrium price.
Elasticity measures how responsive one variable is to a change in another.
Price elasticity of supply (PES) measures how responsive quantity supplied is to a change in price.
Market failure occurs when the free market fails to allocate resources efficiently from society's perspective.
Gross Domestic Product (GDP) measures the value of final goods and services produced within a country during a given period.
C = consumption, I = investment, G = government spending, X = exports and M = imports.
Real GDP adjusts for changes in the general price level, helping economists assess changes in output.
Inflation is a sustained increase in the general price level. It reduces the purchasing power of money when incomes do not rise correspondingly.
Unemployment occurs when people who are willing and able to work cannot find a job.
Common types of unemployment include frictional, structural and cyclical unemployment.
Governments and central banks can influence economic activity through different policy tools.
Expansionary policies aim to support economic activity; contractionary policies aim to reduce excess demand or inflationary pressure.
Use this roadmap to organise your study and identify areas for revision.
Scarcity, choice, opportunity cost and resource allocation.
Market, planned and mixed economies.
Curves, determinants, movements and shifts.
PED, YED, XED and PES.
Competition, monopoly and firm behaviour.
Externalities, public goods and government intervention.
Growth, price stability, employment and balance of payments.
AD, AS and changes in the general price level and output.
Causes, consequences and possible policy responses.
Fiscal, monetary and supply-side policies.
Specialisation, comparative advantage, tariffs and quotas.
Living standards, inequality, poverty and development indicators.
Answer each question and receive immediate feedback. Your final score will be calculated out of 100. This is a foundational practice exam, not an official Pearson Edexcel assessment.
Question 1 of 100
Correct answers