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Does economics explain why some students are smarter than there peers or why some are gifted?

There are a couple of ways to understand this question.

1. Can economic analysis tell us why some students succeed?  Here, the answer is no -- at least not on any individual level.  There's no way to use economic thinking to predict which student will be smarter than which other student.  We can't look at the supply and demand for good students or anything like that.
2. Is economic status responsible for causing some students to succeed and others to fail?  The answer there is maybe.  Students from wealthier families tend to do better in school than those from poorer families.

Yes and no. First, let's talk about the no. Natural intelligence is not based on economics in the strictest sense. With that said, however, economics does play an important role. If a person has money, then they are able to go to better schools, get better help, and get to experience more of the world. These privileges are enormous and incalculable, and they will help in the area of intelligence.

Let's flip things around. If a person was born with great intelligence, but always had to work and never had the opportunity to study, would that person reach his or her potential? Probably not. Economics and environment make a big difference. Another way to look at this is the distinction between nature and nurture. Both are obviously important, which means economic concerns play a big role.

No economics does not explain why some students are smarter or more gifted than others. Questions like this are more likely to be addressed by experts in the fields of psychology or education.

As a matter of fact most of the economics is concerned by behavior of people based on their common characteristics rather than their differences. The basic laws relating to behavior of law, demand, and prices in an economy is based on the assumption that under a given set of situation every individual, who may be either a buyer or seller, will arrive at exactly the same decision or conclusion.