Understanding economic theories enhances UPSC aspirants' performance by providing a strong foundation in economic principles that inform policy decisions. Familiarity with concepts like supply and demand, market structures, and macroeconomic indicators allows candidates to analyze contemporary economic issues critically. This knowledge is vital for both the Preliminary and Mains exams, especially in topics related to economic development and planning. Furthermore, applying these theories to real-world scenarios illustrates the practical implications of economics in governance, showcasing the aspirant's analytical ability in the examination.