Explain how electrons are arranged in an atom and describe what happens to this arrangement when an atom absorbs or releases energy.

Electrons are arranged in shells (energy levels) around the nucleus. Each shell can hold a limited number of electrons – 2 in the first, 8 in the second, 18 in the third, etc. Electrons occupy the lowest available energy level first, so the shell closest to the nucleus is filled before electrons move to higher shells.
When an atom absorbs energy, an electron is promoted to a higher energy level or shell, moving further from the nucleus. If the electron subsequently falls back to a lower energy level, the excess energy is released as electromagnetic radiation (light).