Paper 3 Edexcel Economics A: All you need to know

Here are some tips for Edexcel Economics A Paper 3.

(For practice papers in the style of Paper 3, see the link here.)

Structure of Paper 3

Two questions, both compulsory.

Each question is as follows:

Set of extracts to read
5 mark question
8 mark question
12 mark question
25 mark question – here they give you a choice of two. You must pick one out of two.
Subtotal for each question: 50 marks.

Total marks across the paper: 100.

You have two hours to complete this paper, unless you receive extra time.

Key mistakes

Where do students typically go wrong on this paper? The main reason:

Time management.

Often students spend too long on question 1, or on some of the 5, 8, 12 or 25 mark questions. Spending too much time on early questions comes with a cost – blank or short answers for the rest of the paper.

The second main issue is making sure to include microeconomics and macroeconomics in the 25 mark questions. In paper 3, the 25 mark questions usually require this.

Tips on time management

A few recommendations on time management:

Practise writing succinct answers to 5, 8 and 12 mark questions. Often students write too much on these questions, at the cost of not being able to complete the 25 mark question fully.
Consider starting with the 25 mark question. This can be a way to force you not to spend too much time on the 5,8 and 12 mark questions.
Stick to pre-agreed time limits. Finish question 1 within an hour, or commit 30 minutes to doing the 25 mark question for example. Do not exceed these limits (unless you have extra time at the end of the paper).

Advice on 25 mark questions

Structure recommendation:

Analysis 1
Evaluation 1
Analysis 2 – macroeconomic effect.
Evaluation 2
Conclusion

No need for a third point, provided your other points are correct and detailed enough. Also no need to waste time with an introduction.

For an example of a 25/25 answer that follows this structure in paper 3, see pages 34 to 38 of this examiner’s report: here.

Example 25 mark question plan in style of paper 3

Consider the following 25 mark question as a practice question:

Evaluate the microeconomic and macroeconomic effects of privatisation.

Here is a possible essay plan:

Analysis 1

Microeconomic effects.

Show the effect on the firm e.g. the firm may maximise profits instead of social welfare, leading to higher supernormal profits and prices.

When doing 2 analysis points, make sure your paragraphs are detailed. For example, consider the “knock-on” effects of your original chain of analysis.

A way to do this would be to discuss dynamic efficiency. In other words effect could be reduced (average) costs for the firm over time, for example due to firm reinvestment.

Make sure to use application e.g. refer to the privatisation mentioned in the extract, possibly finding relevant quotes.

Evaluation 1

The classic evaluation points could include it matters how the privatised firm spends its profits.

Alternatively you could consider the business objectives evaluation point. Firms may not be maximising profits, but they could be maximising sales or care about corporate social responsibility etc.

Analysis 2

Macroeconomic effects.

This could be an increase in productivity, shifting the LRAS to the right. This means higher real GDP and employment over time in the economy.

A knock-on effect could be higher future wages and tax revenues.

Make sure to use application here too.

Graph for economics essay plan on privatisation. — Diagram showing privatisation effects on LRAS and SRAS, increasing firm productivity and lowering firm costs.

Evaluation 2

The effect of the policy could depend on how firms achieve their productivity rise. They could fire workers, leading to a rise in unemployment, at least in the short term.

Maybe other factors matter more for national level productivity such as the skill level of the workforce.

Conclusion

Make a judgement. For example, are these effects large or small? Are they overall positive or negative?

Explain why you think this.

Mention further evaluation points that could sway the judgement. For example, maybe the market structure or degree of regulation matters – both could affect how the firm behaves once privatised.