A Level Economics
Theme 3
Business behaviour
and the labour
market
Pearson 2018-19
1
,Introduction
Theme 3 (Business behaviour and the labour market) builds on the content
of Theme 1: Introduction to markets and market failure and focuses on
business economics. Students will need to build upon the knowledge, skills
and understanding developed from Theme 1 in Theme 3, making
connections across these two microeconomic themes in Paper 1, and across
Themes 1, 2, 3 and 4 in Paper 3.
Students will need to apply their knowledge and understanding to both
familiar and unfamiliar contexts in the assessments and demonstrate an
awareness of current economic events and policies.
Content
This theme examines how the number and size of market participants, and
the level of contestability, affect the pricing and nature of competition
among firms. Students will consider the size and growth of firms through
exploring organic growth, mergers and takeovers. They will look at the
reasons for demergers and why some firms tend to remain small.
Students will look at the rational assumption that firms are profit
maximisers and then challenge this by looking at alternative business
objectives. Revenues, costs and profits are explored before linking these
ideas to different market structures. Students will then be able to analyse
and evaluate the pricing and output decisions of firms in different contexts
and understand the role of competition in business decision making.
Supply and demand analysis is specifically applied to the labour market to
see how wages are determined in competitive and non-competitive
markets.
At the end of this theme students should be capable of making an appraisal
of government intervention aimed at promoting competitive markets.
This theme will provide a coherent coverage of microeconomic content,
drawing on local, national and global contexts. Students are encouraged to
use an enquiring, critical and thoughtful approach to the study of
economics and to develop an ability to think as an economist. To develop
their skills, knowledge and understanding in economics, students need to
have acquired competence in quantitative skills that are relevant to and
applied in the context of this theme.
Exam structure
2
,Theme 3 (Business behaviour and the labour market) and Theme 1
(Introduction to markets and market failure) are jointly examined in A’
level Paper 1 of the A’ level - called ‘Markets and business behaviour’.
Paper 1 ‘Markets and business behaviour’, focuses on microeconomic
themes and is externally assessed. The exam paper has three sections:
Section A comprises a range of multiple-choice and short answer
questions. All the questions are compulsory. There are 25 marks available.
Section B comprises one data response question broken down into five
sub-questions (a) to (e). All the questions are compulsory. There are 50
marks available.
Section C comprises a choice of extended open-response questions
(students select one from a choice of two questions). There are 25 marks
available.
The total marks available are 100 marks and the time given is 2 hours.
Assessment objectives
3
, There are four assessment objectives, or sets of skills, in each unit of A-
level economics. Examiners are required to test candidates on these skills,
and the exam papers are specifically devised to integrate them into
questions.
Each objective is given a weight to show its relative importance. In
‘Business behaviour and the labour market’ the assessment objectives have
the following weightings shown in the table below.
Objective Assessment objectives Weighting
AO1 Knowledge and understanding: 22 – 24%
Demonstrate knowledge of terms/concepts
and theories/models to show an understanding
of the behaviour of economic agents and how
they are affected by and respond to economic
issues.
AO2 Application: 25 – 24%
Apply knowledge and understanding to
various economic contexts to show how
economic agents are affected by and respond
to economic issues.
AO3 Analysis: 26 - 28%
Analyse issues within economics, showing an
understanding of their impact on economic
agents.
AO4 Evaluation: 26 - 28%
Evaluate economic arguments and use
qualitative and quantitative evidence to
support informed judgements relating to
economic issues.
4
Theme 3
Business behaviour
and the labour
market
Pearson 2018-19
1
,Introduction
Theme 3 (Business behaviour and the labour market) builds on the content
of Theme 1: Introduction to markets and market failure and focuses on
business economics. Students will need to build upon the knowledge, skills
and understanding developed from Theme 1 in Theme 3, making
connections across these two microeconomic themes in Paper 1, and across
Themes 1, 2, 3 and 4 in Paper 3.
Students will need to apply their knowledge and understanding to both
familiar and unfamiliar contexts in the assessments and demonstrate an
awareness of current economic events and policies.
Content
This theme examines how the number and size of market participants, and
the level of contestability, affect the pricing and nature of competition
among firms. Students will consider the size and growth of firms through
exploring organic growth, mergers and takeovers. They will look at the
reasons for demergers and why some firms tend to remain small.
Students will look at the rational assumption that firms are profit
maximisers and then challenge this by looking at alternative business
objectives. Revenues, costs and profits are explored before linking these
ideas to different market structures. Students will then be able to analyse
and evaluate the pricing and output decisions of firms in different contexts
and understand the role of competition in business decision making.
Supply and demand analysis is specifically applied to the labour market to
see how wages are determined in competitive and non-competitive
markets.
At the end of this theme students should be capable of making an appraisal
of government intervention aimed at promoting competitive markets.
This theme will provide a coherent coverage of microeconomic content,
drawing on local, national and global contexts. Students are encouraged to
use an enquiring, critical and thoughtful approach to the study of
economics and to develop an ability to think as an economist. To develop
their skills, knowledge and understanding in economics, students need to
have acquired competence in quantitative skills that are relevant to and
applied in the context of this theme.
Exam structure
2
,Theme 3 (Business behaviour and the labour market) and Theme 1
(Introduction to markets and market failure) are jointly examined in A’
level Paper 1 of the A’ level - called ‘Markets and business behaviour’.
Paper 1 ‘Markets and business behaviour’, focuses on microeconomic
themes and is externally assessed. The exam paper has three sections:
Section A comprises a range of multiple-choice and short answer
questions. All the questions are compulsory. There are 25 marks available.
Section B comprises one data response question broken down into five
sub-questions (a) to (e). All the questions are compulsory. There are 50
marks available.
Section C comprises a choice of extended open-response questions
(students select one from a choice of two questions). There are 25 marks
available.
The total marks available are 100 marks and the time given is 2 hours.
Assessment objectives
3
, There are four assessment objectives, or sets of skills, in each unit of A-
level economics. Examiners are required to test candidates on these skills,
and the exam papers are specifically devised to integrate them into
questions.
Each objective is given a weight to show its relative importance. In
‘Business behaviour and the labour market’ the assessment objectives have
the following weightings shown in the table below.
Objective Assessment objectives Weighting
AO1 Knowledge and understanding: 22 – 24%
Demonstrate knowledge of terms/concepts
and theories/models to show an understanding
of the behaviour of economic agents and how
they are affected by and respond to economic
issues.
AO2 Application: 25 – 24%
Apply knowledge and understanding to
various economic contexts to show how
economic agents are affected by and respond
to economic issues.
AO3 Analysis: 26 - 28%
Analyse issues within economics, showing an
understanding of their impact on economic
agents.
AO4 Evaluation: 26 - 28%
Evaluate economic arguments and use
qualitative and quantitative evidence to
support informed judgements relating to
economic issues.
4
