This syllabus is for implementation with Year 11 students in 2019. 170358
Contents 1 Course overview 1 1.1 Introduction... 1 1.1.1 Rationale... 1 1.1.2 Learning area structure... 2 1.1.3 Course structure... 3 1.2 Teaching and learning... 4 1.2.1 Syllabus objectives... 4 1.2.2 Underpinning factors... 5 1.2.3 Aboriginal perspectives and Torres Strait Islander perspectives... 8 1.2.4 Pedagogical and conceptual frameworks... 8 1.2.5 Subject matter... 11 1.3 Assessment general information... 12 1.3.1 Formative assessments Units 1 and 2... 12 1.3.2 Summative assessments Units 3 and 4... 12 1.4 Reporting standards... 14 2 Unit 1: Markets and models 15 2.1 Unit description... 15 2.2 Unit objectives... 15 2.3 Topic 1: The basic economic problem... 16 2.4 Topic 2: Economic flows... 17 2.5 Topic 3: Market forces... 18 2.6 Assessment guidance... 19 3 Unit 2: Modified markets 20 3.1 Unit description... 20 3.2 Unit objectives... 21 3.3 Topic 1: Markets and efficiency... 22 3.4 Topic 2: Case options of market measures and strategies... 23 3.5 Assessment guidance... 25 4 Unit 3: International economics 26 4.1 Unit description... 26 4.2 Unit objectives... 26 4.3 Topic 1: The global economy... 27 4.4 Topic 2: International economic issues... 28
4.5 Assessment... 29 4.5.1 Summative internal assessment 1 (IA1): Examination combination response (25%)... 29 4.5.2 Summative internal assessment 2 (IA2): Investigation research report (25%)... 34 5 Unit 4: Contemporary macroeconomics 39 5.1 Unit description... 39 5.2 Unit objectives... 40 5.3 Topic 1: Macroeconomic objectives and theory... 41 5.4 Topic 2: Economic management... 42 5.5 Assessment... 44 5.5.1 Summative internal assessment 3 (IA3): Examination extended response to stimulus (25%)... 44 5.5.2 Summative external assessment (EA): Examination combination response (25%)... 49 6 Glossary 51 7 References 71
1 Course overview 1.1 Introduction 1.1.1 Rationale The discipline of economics is integral to every aspect of our lives: our employment opportunities, business operations and living standards. The subject challenges us to use evidence and be innovative when solving problems in a world of complex global relationships and trends, where a knowledge of economic forces and flows leads to better decisions. In Economics, decisionmaking is core: how to allocate and distribute scarce resources to maximise well-being. Economic literacy is essential for understanding current issues: to make informed judgments and participate effectively in society. Students develop knowledge and cognitive skills to comprehend, apply analytical processes and use economic knowledge. They examine data and information to determine validity, and consider economic policies from various perspectives. Economic models and analytical tools are used to investigate and evaluate outcomes to draw conclusions. In the process, students appreciate ideas, viewpoints and values underlying economic issues. The field of economics is typically divided into two: microeconomics being the study of individuals, households and businesses; and macroeconomics, the study of economy-wide phenomena. Within this context, students study opportunity costs, economic models and the market forces of demand and supply. These concepts are applied to real-world issues of how and why markets may be modified, and the effects of government strategies and interventions. The final units of the course dissect and interpret the complex nature of international economic relationships and the dynamics of Australia s place in the global economy. This segues to Australian economic management, as students analyse trends and evaluate economic policies. Curiosity is essential when studying Economics how can we best use and allocate resources and production, and what are the consequences of trade-offs? Accordingly, learning is centred on an inquiry approach that facilitates reflection and metacognitive awareness. Intellectual rigour is sharpened by the appraisal of a variety of often-contradictory data and information, which tests the role of assumptions in economic models, ideas and perspectives. In the 21st century, the study of economics develops the transferable skills of critical thinking and questioning assumptions. As students develop intellectual flexibility, digital literacy and economic thinking skills, they increase the tertiary pathways and opportunities in the workplace open to them. Economics is based on possibility and optimism. It appeals to students from Humanities and Business, and those interested in the broader relevance of Mathematics, Technology and Science because of their connection with economic forces. The subject positions students to think deeply about the challenges that confront individuals, business and government, and provides students with tools to think creatively beyond what is known and predictable. Pathways Economics is a General subject suited to students who are interested in pathways beyond school that lead to tertiary studies, vocational education or work. A course of study in Economics can establish a basis for further education and employment in the fields of economics, econometrics, management, data analytics, business, accounting, finance, actuarial science, law and political science. Economics is an excellent complement for students who want to solve real-world science or environmental problems and participate in government policy debates. It provides a competitive advantage for career options where students are aiming for management roles and developing their entrepreneurial skills to create business opportunities as agents of innovation. Page 1 of 71
1.1.2 Learning area structure All learning areas build on the P 10 Australian Curriculum. Figure 1: Learning area structure P 10 Australian Curriculum Humanities and Social Sciences Senior Secondary Humanities and Social Sciences Learning Area General results may contribute to an Australian Tertiary Admission Rank (ATAR) calculation results contribute to the Queensland Certificate of Education (QCE) includes external assessment Applied no more than one Applied subject can contribute to an ATAR calculation results contribute to the QCE Aboriginal & Torres Strait Islander Studies Geography Business Studies Accounting Legal Studies Religion & Ethics Ancient History Modern History Social & Community Studies Business Philosophy & Reason Tourism Economics Study of Religion Page 2 of 71
1.1.3 Course structure Economics is a course of study consisting of four units. Subject matter, learning experiences and assessment increase in complexity from Units 1 and 2 to Units 3 and 4 as students develop greater independence as learners. Units 1 and 2 provide foundational learning, which allows students to experience all syllabus objectives and begin engaging with the course subject matter. Students should complete Units 1 and 2 before beginning Unit 3. It is recommended that Unit 3 be completed before Unit 4. Units 3 and 4 consolidate student learning. Only the results from Units 3 and 4 will contribute to ATAR calculations. Figure 2 outlines the structure of this course of study. Each unit has been developed with a notional time of 55 hours of teaching and learning, including assessment. Figure 2: Course structure Economics Unit 1 Markets and models Unit 2 Modified markets Unit 3 International economics Unit 4 Contemporary macroeconomics Topic 1: The basic economic problem Topic 2: Economic flows Topic 3: Market forces Topic 1: Markets and efficiency Topic 2: Case options of market measures and strategies Topic 1: The global economy Topic 2: International economic issues Topic 1: Macroeconomic objectives and theory Topic 2: Economic management Assessment Assessment Assessment Assessment Formative internal assessment/s Formative internal assessment/s Summative internal assessment 1: Examination combination response (25%) Summative internal assessment 3: Examination extended response to stimulus (25%) Summative internal assessment 2: Summative external assessment: Investigation research report (25%) Examination combination response (25%) Students should have opportunities in Units 1 and 2 to experience and respond to the types of assessment they will encounter in Units 3 and 4. For reporting purposes, schools should develop at least one assessment per unit, with a maximum of four assessments across Units 1 and 2. Page 3 of 71
1.2 Teaching and learning 1.2.1 Syllabus objectives The syllabus objectives outline what students have the opportunity to learn. Assessment provides evidence of how well students have achieved the objectives. Syllabus objectives inform unit objectives, which are contextualised for the subject matter and requirements of the unit. Unit objectives, in turn, inform the assessment objectives, which are further contextualised for the requirements of the assessment instruments. The number of each objective remains constant at all levels, i.e. Syllabus objective 1 relates to Unit objective 1 and to Assessment objective 1 in each assessment instrument. Syllabus objectives are described in terms of actions that operate on the subject matter. Students are required to use a range of cognitive processes in order to demonstrate and meet the syllabus objectives. These cognitive processes are described in the explanatory paragraph following each objective in terms of four levels: retrieval, comprehension, analytical processes (analysis), and knowledge utilisation, with each process building on the previous processes (see Marzano & Kendall 2007, 2008). That is, comprehension requires retrieval, and knowledge utilisation requires retrieval, comprehension and analytical processes (analysis). By the conclusion of the course of study, students will: Syllabus objective Unit 1 Unit 2 Unit 3 Unit 4 1. comprehend economic concepts, principles and models 2. select data and economic information from sources 3. analyse economic issues 4. evaluate economic outcomes 5. create responses that communicate economic meaning 1. comprehend economic concepts, principles and models When students comprehend economic concepts, principles and models, they retrieve and use details of the features and characteristics to present meaning and demonstrate understanding. Students apply this account to theoretical or real-world examples. Comprehending includes translating knowledge into symbolic representations, constructing diagrams or completing calculations, and using economic terminology. 2. select data and economic information from sources When students select data, information and sources, they choose economic data and information from primary and/or secondary sources such as government and other institutional websites, published reports, media articles and expert commentaries. Students make these choices based on currency, accuracy and reliability, and use a recognised system of referencing to document and acknowledge sources. 3. analyse economic issues When students analyse economic issues, they dissect the issues using the data and information selected. These components are examined, compared and classified to interpret economic relationships, patterns and trends. Page 4 of 71
4. evaluate economic outcomes When students evaluate economic outcomes, they use their knowledge from their analysis to draw conclusions or make decisions based on economic criteria. They synthesise data and information, and consider different economic ideas and perspectives in order to support their conclusions or decisions with economic reasoning. 5. create responses that communicate economic meaning When students create a response, they use their knowledge to communicate economic meaning according to the intended purpose using data, information, graphs and diagrams. Communication requires choices that demonstrate the order, sequencing and development of ideas based on data and information. In Economics, students use text forms, communication conventions, and modes that suit the context and convey economic meaning. 1.2.2 Underpinning factors There are three skill sets that underpin senior syllabuses and are essential for defining the distinctive nature of subjects: literacy the set of knowledge and skills about language and texts essential for understanding and conveying Economics content numeracy the knowledge, skills, behaviours and dispositions that students need to use mathematics in a wide range of situations, to recognise and understand the role of mathematics in the world, and to develop the dispositions and capacities to use mathematical knowledge and skills purposefully 21st century skills the attributes and skills students need to prepare them for higher education, work and engagement in a complex and rapidly changing world. These skill sets, which overlap and interact, are derived from current education, industry and community expectations. They encompass the knowledge, skills, capabilities, behaviours and dispositions that will help students live and work successfully in the 21st century. Together these three skill sets shape the development of senior subject syllabuses. Although coverage of each skill set may vary from syllabus to syllabus, students should be provided with opportunities to learn through and about these skills over the course of study. Each skill set contains identifiable knowledge and skills that can be directly assessed. Page 5 of 71
Literacy in Economics Ongoing systematic teaching and learning focused on the literacy knowledge and skills specific to Economics is essential for student achievement. Students need to learn and use knowledge and skills of reading, viewing and listening to understand and learn the content of Economics. Students need to learn and use the knowledge and skills of writing, composing and speaking to convey the Economics content they have learnt. To understand and use Economics content, teaching and learning strategies include: developing familiarity with the syntax of economics, that is, the use of terminology and specialised language comprehending economic texts, graphs, symbols and visual information from a range of sources to stimulate learning, including government and other institutional websites, published reports, media articles and expert commentaries transforming economic ideas from a variety of sources to develop understanding using language and text to convey economic meaning in written and non-written formats. These aspects of literacy knowledge and skills are embedded in the syllabus objectives, unit objectives and subject matter, and instrument-specific marking guide (ISMGs) for Economics. Numeracy in Economics Although much of the explicit teaching of numeracy skills occurs in Mathematics, being numerate involves using mathematical skills across the curriculum. Therefore, numeracy development is an essential component of teaching and learning across the curriculum and a responsibility for all teachers. To understand and use Economics content, teaching and learning strategies include: extracting, converting, translating or extrapolating data and information given in numerical forms representing and interpreting data and information using models, statistics and calculations identifying patterns and trends in data and information communicating economic meaning through the application of numeracy. These aspects of numeracy knowledge and skills are embedded in the syllabus objectives, unit objectives and subject matter, and ISMGs for Economics. Page 6 of 71
21st century skills The 21st century skills identified in the following table reflect a common agreement, both in Australia and internationally, on the skills and attributes students need to prepare them for higher education, work and engagement in a complex and rapidly changing world. 21st century skills Associated skills 21st century skills Associated skills analytical thinking innovation problem-solving initiative and enterprise decision-making curiosity and imagination critical thinking reasoning reflecting and evaluating intellectual flexibility creative thinking creativity generating and applying new ideas identifying alternatives seeing or making new links effective oral and written communication relating to others (interacting with others) communication using language, symbols and texts communicating ideas effectively with diverse audiences collaboration and teamwork recognising and using diverse perspectives participating and contributing community connections adaptability/flexibility operations and concepts personal and social skills management (self, career, time, planning and organising) character (resilience, mindfulness, open- and fair-mindedness, selfawareness) leadership information & communication technologies (ICT) skills accessing and analysing information being productive users of technology digital citizenship (being safe, positive and responsible online) citizenship cultural awareness ethical (and moral) understanding Economics helps develop the following 21st century skills: critical thinking and reasoning skills by breaking complex aspects into component parts to construct understanding, then using this understanding to make and verify findings, and to critically reflect, evaluate and justify decisions creative thinking by encouraging curiosity and posing questions about economics and the consequent impacts to imagine possibilities, consider alternatives and generate solutions communication by cultivating specialised language, terminology, symbols and diagrams associated with effective and efficient communication collaboration and teamwork by promoting opportunities to work constructively in groups and to maximise their own understanding of economic concepts through peer discussions Page 7 of 71
personal and social skills including management during assessment and inquiry tasks, and cultural awareness and ethical understanding concerning the allocation of resources and distribution of production ICT skills using digital technologies to research and interrogate primary and secondary source information, and manipulate data to ascertain relationships, patterns and trends. These elements of 21st century skills are embedded in the syllabus objectives, unit objectives and subject matter, and ISMGs for Economics. 1.2.3 Aboriginal perspectives and Torres Strait Islander perspectives The QCAA is committed to reconciliation in Australia. As part of its commitment, the QCAA affirms that: Aboriginal peoples and Torres Strait Islander peoples are the first Australians, and have the oldest living cultures in human history Aboriginal peoples and Torres Strait Islander peoples have strong cultural traditions and speak diverse languages and dialects, other than Standard Australian English teaching and learning in Queensland schools should provide opportunities for students to deepen their knowledge of Australia by engaging with the perspectives of Aboriginal peoples and Torres Strait Islander peoples positive outcomes for Aboriginal students and Torres Strait Islander students are supported by successfully embedding Aboriginal perspectives and Torres Strait Islander perspectives across planning, teaching and assessing student achievement. Guidelines about Aboriginal perspectives and Torres Strait Islander perspectives and resources for teaching are available at www.qcaa.qld.edu.au/k-12-policies/aboriginal-torres-strait-islanderperspectives. 1.2.4 Pedagogical and conceptual frameworks An approach to inquiry Learning in the 21st century is dynamic, and is enhanced by an inquiry approach that applies discipline knowledge and skills to real-world situations and contemporary events (Masters 2016). An inquiry approach involves a range of instructional practices that stimulate student learning and give precedence to students investigative work (Aditomo et al 2013). Inquiry-based learning An inquiry approach involves: a method of learning, initiated by questions or problems personal construction of a student s own knowledge, i.e. knowledge that is new to the student an active approach to learning where students have the central role the teacher acting as a facilitator developing self-directed learning over time, as students assume increasing responsibility for their learning. Page 8 of 71
These core elements are stated by Spronken-Smith and Walker (2010, p. 726), and supported by references to Justice et al (2007), Khan and O Rourke (2004) and Weaver (1989). The following table describes three different approaches to teaching inquiry along the continua between teaching for and through. This is based on Spronken-Smith and Walker (2010, p. 726), who built on the problem-solving approach of Staver and Bay (1987). Inquiry type Structured Guided Open Description Teacher provides students with an issue, problem or question and an outline for addressing it. The inquiry components are structured and each component may be the focus of class activities either in isolation or through connections structured by the teacher. Teacher provides questions to stimulate inquiry, and students are self-directed in terms of exploring these questions. Teacher provides guidance with some or all inquiry components. Teacher cedes control and students work more independently to formulate their own questions and problems, and progress through the full inquiry cycle, with the teacher monitoring this progress. Teaching for or through inquiry For Through Through Classroom learning may involve activities and experiences that focus on particular components of an inquiry process so that these are explicitly taught it is not necessary that students undertake all components of an inquiry approach in order to develop mastery, confidence and independence. Figure 3 depicts the five components of an inquiry process. Page 9 of 71
Figure 3: Stages of inquiry process Page 10 of 71
1.2.5 Subject matter Subject matter is the body of information, mental procedures and psychomotor procedures (see Marzano & Kendall 2007, 2008) that are necessary for students learning and engagement with Economics. It is particular to each unit in the course of study and provides the basis for student learning experiences. Subject matter has a direct relationship to the unit objectives, but is of a finer granularity and is more specific. These statements of learning are constructed in a similar way to objectives. Each statement: describes an action (or combination of actions) what the student is expected to do describes the element expressed as information, mental procedures and/or psychomotor procedures is contextualised for the topic or circumstance particular to the unit. Links and connections to current events, as communicated in the media and government statistics, are crucial to the study of economics and the development of economic literacy. When interpreting the subject matter and assessment specifications, it is important to understand the intent of terms such as including and for example. When preceding a list, including refers to the aspects, elements or contexts that must be covered when teaching topics in the units; additional aspects, elements or contexts may be used at the teacher s discretion. In instances when for example is used, teachers may select examples from the provided content or choose other relevant examples that are not stated. There is no expectation that all examples must be covered. Page 11 of 71
1.3 Assessment general information Assessments are formative in Units 1 and 2, and summative in Units 3 and 4. Assessment Unit 1 Unit 2 Unit 3 Unit 4 Formative assessments Summative internal assessment 1 Summative internal assessment 2 Summative internal assessment 3 Summative external assessment 1.3.1 Formative assessments Units 1 and 2 Formative assessments provide feedback to both students and teachers about each student s progress in the course of study. Schools develop internal assessments for each senior subject, based on the learning described in Units 1 and 2 of the subject syllabus. Each unit objective must be assessed at least once. For reporting purposes, schools should devise at least two but no more than four assessments for Units 1 and 2 of this subject. At least one assessment must be completed for each unit. The sequencing, scope and scale of assessments for Units 1 and 2 are matters for each school to decide and should reflect the local context. Teachers are encouraged to use the A E descriptors in the reporting standards (Section 1.4) to provide formative feedback to students and to report on progress. 1.3.2 Summative assessments Units 3 and 4 Students will complete a total of four summative assessments three internal and one external that count towards their final mark in each subject. Schools develop three internal assessments for each senior subject, based on the learning described in Units 3 and 4 of the syllabus. The three summative internal assessments will be endorsed and the results confirmed by the QCAA. These results will be combined with a single external assessment developed and marked by the QCAA. The external assessment results for Economics will contribute 25% towards a student s result. Page 12 of 71
Summative internal assessment instrument-specific marking guides This syllabus provides ISMGs for the three summative internal assessments in Units 3 and 4. The ISMGs describe the characteristics evident in student responses and align with the identified assessment objectives. Assessment objectives are drawn from the unit objectives and are contextualised for the requirements of the assessment instrument. Criteria Each ISMG groups assessment objectives into criteria. An assessment objective may appear in multiple criteria, or in a single criterion of an assessment. Making judgments Assessment evidence of student performance in each criterion is matched to a performance-level descriptor, which describes the typical characteristics of student work. Where a student response has characteristics from more than one performance level, a best-fit approach is used. Where a performance level has a two-mark range, it must be decided if the best fit is the higher or lower mark of the range. Authentication Schools and teachers must have strategies in place for ensuring that work submitted for internal summative assessment is the student s own. Authentication strategies outlined in QCAA guidelines, which include guidance for drafting, scaffolding and teacher feedback, must be adhered to. Summative external assessment The summative external assessment adds valuable evidence of achievement to a student s profile. External assessment is: common to all schools administered under the same conditions at the same time and on the same day developed and marked by the QCAA according to a commonly applied marking scheme. The external assessment contributes 25% to the student s result in Economics. It is not privileged over the school-based assessment. Page 13 of 71
1.4 Reporting standards Reporting standards are summary statements that succinctly describe typical performance at each of the five levels (A E). They reflect the cognitive taxonomy and objectives of the course of study. The primary purpose of reporting standards is for twice-yearly reporting on student progress. These descriptors can also be used to help teachers provide formative feedback to students and to align ISMGs. Reporting standards A The student demonstrates comprehensive understanding of a significant range of economic concepts, principles and models, using sophisticated economic terminology. The student selects a discerning variety of economic data and information, with accurate and systematic acknowledgment of sources. There is a comprehensive analysis of economic issues with considerable complexity and discerning use of evidence to support the analysis. The student evaluates economic outcomes demonstrating discerning synthesis, perceptive conclusions and decisions and critical economic reasoning. There is sophisticated control of communication conventions, concise expression, astute vocabulary and accomplished use of diagrammatic and statistical forms. B The student demonstrates considerable understanding of a substantial range of economic concepts, principles and models, using effective economic terminology. The student selects an effective variety of economic data and information, with a system of acknowledging sources. There is considerable analysis of economic issues with some complexity and effective use of evidence to support the analysis. The student evaluates economic outcomes demonstrating purposeful synthesis, effective conclusions and decisions and detailed economic reasoning. There is substantial control of communication conventions, proficient vocabulary and effective use of diagrammatic and statistical forms. C The student demonstrates sufficient understanding of a range of relevant economic concepts, principles and models, using adequate economic terminology. The student selects a range of economic data and information and uses a basic system of acknowledging sources. There is adequate analysis of economic issues and sufficient use of evidence to support the analysis. The student evaluates economic outcomes demonstrating adequate synthesising skills, reasonable conclusions and decisions and feasible economic reasoning. There is appropriate communication and some use of diagrammatic and statistical forms. D The student demonstrates a partial understanding of economic concepts, principles and models. The student selects a narrow range of data and information with a partial acknowledgment of sources. There are obvious descriptions of economic issues and a narrow use of evidence to support the analysis. The student evaluates using superficial judgments of economic outcomes with some reasons. There is a partial control of communication conventions. The student identifies aspects of economic concepts, principles and/or models. The student provides aspects of analysis in broad statements about economic issues. The student shows aspects of evaluation in opinions or statements attempting to judge economic outcomes. There is an inconsistent use of communication conventions. E Page 14 of 71
2 Unit 1: Markets and models 2.1 Unit description In Unit 1, students understand how the fundamental economic concepts of scarcity, choice and opportunity cost compel individuals, businesses and governments to make decisions about how best to allocate resources among competing needs. The nature of the basic economic problem is examined, and the consequences of scarcity are expressed in the production possibility curve and through the choices made by modern economic systems. Students analyse the factors that impact on the economy through the circular flow of income model, and investigate the price mechanism as a model for the efficient allocation of resources. It is crucial that the learning for this unit is studied through current economic contexts linked to the basic economic problem. Students develop an appreciation for current news in order to apply and add depth to their learning from class. Unit requirements The learning for this unit is divided into three separate and interrelated topics. Each is of equal importance in providing students with the knowledge and skills of the unit. The table below outlines the notional time between topics. Topics 2 and 3 may be taught in reverse order. Topics Notional hours Topic 1: The basic economic problem 16 Topic 2: Economic flows 19 Topic 3: Market forces 20 2.2 Unit objectives Unit objectives are drawn from the syllabus objectives and are contextualised for the subject matter and requirements of the unit. Each unit objective must be assessed at least once. Students will: 1. comprehend economic concepts, principles and models as they apply to economic problems, flows and markets 2. select current, accurate and reliable primary and secondary data, information and sources 3. analyse economic issues involved with economic problems, flows and markets by using data and information to interpret relationships, patterns and trends 4. evaluate the operation of markets or the circular flow of income within the economy to draw conclusions or make decisions, using economic criteria 5. create responses that communicate economic meaning to suit the intended purpose, using paragraphs and extended responses. Page 15 of 71
2.3 Topic 1: The basic economic problem Notional time: 16 hours In Topic 1, students understand the foundations of the subject in terms of scarcity and choices. Students learn key terminology as they consider the different stakeholders involved in the economy, and the basic economic problem of satisfying needs and wants. The first economic model presented in the course is the production possibility curve, which enables students to identify and examine relationships between resources and production. This topic allows students to consider finite resources and how these require choices to be made at an individual and at a national level. Subject matter In this topic, students will: describe key concepts using economic terminology, including ceteris paribus assumption, choice, economic growth, economic resources, efficiency, factors of production, opportunity cost, production possibility curve (frontier), productivity and scarcity describe the basic economic problem of relative scarcity and the need for decision-making by individuals, businesses and governments at local, state, national and international levels explain the concept of opportunity cost and recognise its significance in decision-making, where benefits are subjectively measured against costs classify the factors of production (land, labour, capital and entrepreneurial ability) and link these to income (rent, wages, interest and profit) explain the concept of models in economics and how making assumptions aims to simplify and identify complex economic relationships identify assumptions and use the production possibility curve to explain, by illustrating in diagrammatic form, the concepts of scarcity, choice, opportunity cost, trade-offs, underutilisation of resources, efficiency, productivity, unemployment and economic growth analyse the production possibility curve to show the effects of different economic events, such as improvements in health, education or productivity of labour, asymmetric technology advances, war and famine explain - ways that an economy attempts to solve the economic problem by considering the three basic economic questions what and how much to produce, how to produce and for whom to produce - the distinction between efficiency (use of resources) and equity (who owns the resources) select sources to explore the ways that different economic systems attempt to resolve the three economic questions, using real-world examples, e.g. Norway, Singapore, North Korea, Cuba, China, Saudi Arabia, United States and the United Kingdom create responses that communicate economic meaning using data, information, graphs and diagrams to suit the intended purpose, and demonstrate order, sequencing and development of ideas using paragraphs and extended responses. Page 16 of 71
2.4 Topic 2: Economic flows Notional time: 19 hours In Topic 2, students explore the economic idea of the economy as a system of real and monetary connections between the five key sectors, using the circular flow model of income. They analyse the forces that affect flows to and from the household, business, financial, government and overseas sectors, the effect of government decisions on the economy, and the interrelationships between each sector. This topic enables students to see links and connections in the economic system that they experience every day. Subject matter In this topic, students will: describe key concepts using economic terminology, including aggregate demand, aggregate supply, circular flow model, consumption, exports, government expenditure, gross domestic product (GDP), imports, investment, subsidy and taxes construct the five-sector circular flow model, and explain the significance of its assumptions. The diagram shows withdrawals (Savings (S), Taxation (T) and Imports (M)) in one area, with injections (Investment (I), Government Expenditure (G) and Exports (X)) in the opposite area explain the - relationship existing between the five sectors of the circular flow model in closed and open form, both in words and in diagrammatic form - components of aggregate demand: Consumption + Investment + Government Expenditure + net exports (Exports Imports), or C + I + G + (X M) - equilibrium condition, where injections equal withdrawals, and understand why equilibrium is not where S = I and T = G and M = X - connection between aggregate demand and GDP, and locate GDP on the Australian Bureau of Statistics website - connection between the resources and goods markets, and the business and household sectors in the circular flow model - economic cycle (business cycle) with booms and busts, and how the government can minimise fluctuations in the economic cycle (the level of complexity is less than the requirement for Units 3 and 4) - paradox of thrift (fallacy of composition) exposed by the circular flow model select sources and analyse (the level of complexity is less than the requirement for Units 3 and 4) - the various forces impacting on the size of the circular flow, e.g. retail sales growth, business investment, exports and imports using current data from the Australian Bureau of Statistics - the effects of government spending and taxation on the size of the economy using aggregate demand and the circular flow model - the effects of changes in the cash rate by the Reserve Bank of Australia on aggregate demand and the circular flow of income model, and explain the meaning of basis points and percentage points explain the effects of changes in the factors of aggregate supply to the circular flow model (e.g. technology, innovation, entrepreneurship and immigration) and make connections to the production possibility curve, economic growth and employment analyse how current and topical economic events affect various economic flows, e.g. changes to confidence levels; minimum wage; government subsidies to an industry (such as renewable energy, mining or agricultural); currency movements; or economic conditions in a major trading partner evaluate outcomes from changes in economic flows, by drawing conclusions or making decisions create responses that communicate economic meaning using data, information, graphs and diagrams to suit the intended purpose, and demonstrate order, sequencing and development of ideas using paragraphs and extended responses. Page 17 of 71
2.5 Topic 3: Market forces Notional time: 20 hours In Topic 3, students examine the forces of demand and supply that underlie the operation of the price mechanism in the economy. Important concepts of shortages, surpluses and elasticities are scrutinised. This topic is studied through the lens of the economic problem in a specific current Australian context and market, such as: agricultural (e.g. wool, wheat and beef); other commodities (e.g. minerals and energy); community; financial; share; labour; property/housing and health. This topic develops students comprehension of market forces, and how they can use these to their advantage when understanding and predicting prices. Subject matter In this topic, students will: describe key concepts using economic terminology, including consumer sovereignty, elasticity, equilibrium, the law of demand and the law of supply describe the different characteristics of goods and services, including private, public, merit, substitute and complementary explain - the concept of a market and consumer sovereignty - and apply the theory of demand and supply to determine market equilibrium, and express in diagrammatic forms - the significance of the ceteris paribus assumption with respect to the law of demand and supply distinguish movements along from shifts of demand and supply curves; express each graphically and explain the impact on equilibrium price and quantity analyse the impact of non-price factors on demand and supply curves, and equilibrium price and quantity in various situations, with diagrams. Challenging economic problems and application of economic theory can be considered, e.g. how housing prices increase despite increases in supply, or how Valentine s Day flowers increase in price despite a significant increase in supply of flowers analyse market situations that are not in equilibrium in the short term, and express graphically to demonstrate shortage and surplus (i.e. the operation of the invisible hand as explained by Adam Smith) explain - price elasticity of demand and the difference between elastic, inelastic and unitary elasticity, construct appropriate diagrams and apply to various situations - the factors affecting elasticity of demand, including necessities and luxuries, the existence of substitutes, the proportion of income spent on the good, and the length of time following a price change calculate - the percentage change in prices from one period to the next, using the calculation for change - the price elasticity of demand using the total revenue and/or point method, explain the numerical values, and relate to real economic scenarios analyse the significance of price elasticity of demand to consumers, business and government explain price elasticity of supply, and elasticities of demand (income and cross) select sources to investigate how the price mechanism operates within a specific market analyse the significant components within a specific market to explore trends in prices and the relationships between supply and demand and the impacts upon price and quantity evaluate the effects of changes in price on consumers and businesses create responses that communicate economic meaning using data, information, graphs and diagrams to suit the intended purpose, and demonstrate order, sequencing and development of ideas using paragraphs and extended responses. Page 18 of 71
2.6 Assessment guidance In constructing assessment instruments for Unit 1, schools should ensure that the objectives cover, or are chosen from, the unit objectives. If one assessment instrument is developed for a unit, it must assess all the unit objectives; if more than one assessment instrument is developed, the unit objectives must be covered across those instruments. Suggested assessment for Unit 1 Topics 2 and 3 may be taught in reverse order. The suggested assessment for Unit 1 is an Examination combination response and an Investigation research report, so that students experience the types of assessment instruments that are mandatory in Units 3 and 4. The conditions and specifications should mirror the conditions and specifications in Units 3 and 4. Topic Objectives Suggested assessment technique Topic 1: The basic economic problem and Topic 2: Economic flows or Topic 3: Market forces 1, 3 and 4 Examination combination response Topic 3: Market forces or Topic 2: Economic flows 1, 2, 3, 4 and 5 Investigation research report Page 19 of 71
3 Unit 2: Modified markets 3.1 Unit description In Unit 2, students explore the imperfections within markets and the economic concept that markets do not always deliver socially desirable or efficient outcomes. They investigate the causes and effects of market failure and the measures and strategies that may be used to modify markets in attempts to maximise economic and social well-being. Various market interventions are evaluated in terms of their effectiveness in minimising the short- and long-term consequences of markets not delivering socially optimal outcomes. Examples that focus on various causes of market failure and different types of government strategies and interventions can be used, for example: the ability of the Australian Competition and Consumer Commission (ACCC) and the courts to mitigate the impact of dominant firms in the market, such as the grocery, banking or petrol industries environmental sustainability (fisheries, pollution and waste) and economic equality (regional and individual) the provision of public goods (police force, public infrastructure, Australian Broadcasting Commission (ABC), Australian Prudential Regulation Authority (APRA), and Australian Securities and Investments Commission (ASIC)) the provision of merit goods (schools, hospitals and national parks). Unit requirements The learning for this unit is divided into two separate and interrelated topics. Each is of equal importance in providing students with the required knowledge and skills. The table below outlines the notional time between topics. Topics Notional hours Topic 1: Markets and efficiency 21 Topic 2: Case options of market measures and strategies 34 Page 20 of 71
3.2 Unit objectives Unit objectives are drawn from the syllabus objectives and are contextualised for the subject matter and requirements of the unit. Each unit objective must be assessed at least once. Students will: 1. comprehend economic concepts, principles and models as they apply to market failure, modification of markets, and government measures and strategies 2. select current, accurate and reliable primary and secondary data, information and sources 3. analyse economic issues involved with modified markets, by using data and information to interpret relationships, patterns and trends 4. evaluate government interventions in markets and their potential effectiveness in achieving a socially desirable allocation of resources, using economic criteria 5. create responses that communicate economic meaning to suit the intended purpose, using paragraphs and extended responses. Page 21 of 71
3.3 Topic 1: Markets and efficiency Notional time: 21 hours In Topic 1, students understand that markets can fail when the price mechanism results in a suboptimal allocation of resources. They examine market failure and explore traditional and innovative measures and strategies using economic criteria such as socially optimal and/or efficient outcomes. This topic analyses how markets may not always work efficiently and effectively, and the different choices and opportunities that exist when this phenomenon occurs. Subject matter In this topic, students will: describe key concepts using economic terminology, including allocative efficiency, productive efficiency, dynamic efficiency, externalities, incentives, market failure, monopolistic competition, perfect competition, oligopoly, monopoly, goods (public, private, merit and demerit), and signals describe - the meaning of allocative, productive and dynamic efficiency as these relate to the optimal operation of markets - the assumptions of a perfectly competitive market system, and outline the continuum between a perfectly competitive market and monopoly compare optimal versus socially desirable outcomes analyse the difference between complete market failure (missing markets) and partial market failure explain and analyse the causes and effects of market failure, including - how the excesses of boom and bust cycles in economic growth may result in suboptimal and socially undesirable outcomes - the concepts of positive and negative externalities of production and consumption with a diagrammatic representation of the welfare loss/benefit associated with them - how market power may create a loss of market efficiencies - the difference between public goods (e.g. fresh air, national security, street lighting) and private goods, why markets might not adequately provide public goods and the concept of the free rider problem - the tragedy of the commons as it relates to common resources and the problem of ill-defined property rights, e.g. oceans and the atmosphere - how the lack of common ownership and the problems associated with global coordination limit government options when modifying markets, e.g. global warming and space junk in the outer atmosphere - ways in which the immobility of factors of production might lead to the misallocation of resources - how asymmetric (imperfect) information can lead to a misallocation of resources, e.g. adverse selection such as in the market for used cars (lemons), and moral hazard explain and analyse the different methods of market modification required to correct market failure, including direct and indirect taxation (e.g. Pigouvian taxes), subsidies, price floors/ceilings; in addition, suasion, tradable permits or direct state provision and regulation may be examined explain how the features and characteristics of the extension of property rights might resolve economic inefficiencies associated with common resources, e.g. economic exclusion zones and economic zones in national parks select sources, analyse and evaluate - how market failure can create opportunities for innovation and business - the tension between the costs to society of market failure and the unintended consequences of possible mitigation methods create responses that communicate economic meaning using data, information, graphs and diagrams to suit the intended purpose, and demonstrate order, sequencing and development of ideas using paragraphs and extended responses. Page 22 of 71
3.4 Topic 2: Case options of market measures and strategies Notional time: 34 hours, including suggested investigation assessment In Topic 2, students study a choice of two of the three case options listed below of market measures and strategies to apply the economic concepts and economic ideas developed in Topic 1. Students analyse different situations to explain the causes and effects of the market failure and the need for intervention. They evaluate strategies and/or interventions to achieve socially desirable and/or optimal outcomes. Case option A: Market concentration Notional time: 12 hours Subject matter In this case, students will: describe and explain the meaning of market concentration and market power, and consider allocative, productive and dynamic efficiency as these relate to the desirable operation of markets explain how market concentration can change over time resulting in changes to market structure, including perfect competition, monopolistic competition, oligopoly and monopoly; diagrammatic analysis is an optional extension select data and information that offer evidence of concentrated markets in Australia and other countries (e.g. banking, grocery and petroleum industries), and examine these sources to appreciate their underlying assumptions and perspectives explain the impact of competitive pressures on innovation and investment, resource allocation and market efficiency, using economic reasoning analyse and evaluate - private and social costs and benefits of concentrated markets (e.g. under-provision of goods, and positive and negative externalities), and support with diagrams - the role of the Australian Competition and Consumer Commission (ACCC) and the courts in reducing anticompetitive behaviour - government strategies and/or interventions to increase competition in markets to achieve more efficient market outcomes, e.g. in oligopolistic industries such as banking, grocery and petroleum, and considering different perspectives create responses that communicate economic meaning using data, information, graphs and diagrams to suit the intended purpose, and demonstrate the order, sequencing and development of ideas using paragraphs and extended responses. Page 23 of 71