Economic contexts

Teachers integrate problem-based scenarios from two or more different contexts to facilitate development of students’ skills and conceptual understandings.

Teachers select scenarios for inquiry based on the interests of their students so that economic skills, concepts, principles and models from the core topic (thinking like an economist) are integrated in authentic ways. Teachers determine the depth and breadth of each context for their teaching programs.

The following contexts may form the basis for teachers to design scenarios for inquiry:

• firms
• macroeconomic management
• trade and globalisation
• wealth, poverty, and inequality
• the environment
• health
• sport and entertainment
• school-developed context.

Firms

Students apply economic thinking to develop an understanding of how firms use economics in their daily operations. Students investigate how firms determine what resources they will use for production, and analyse the productivity of the labour force and the efficient use of capital resources. They investigate the markets for different products, and the cost of selling in domestic and/or international markets. Students explore market failure, including potential responses to market failure.

Examples of possible scenarios:

• examining how game theory can be applied to the ways in which consumers and producers act and behave
• examining ways in which governments can encourage firms to innovate, and analysing the impact of externalities
• investigating how firms influence buyer behaviour in order to maximise revenue
• evaluating the measures taken to address undesirable market outcomes.

Macroeconomic management

Students apply economic thinking to analyse demand management (fiscal, monetary) and supply management policy settings within a specified economic context.

Students analyse and evaluate the effect of different fiscal and monetary policy settings and make recommendations for policy change. They analyse the intended and unintended consequences of recommended policy changes and evaluate these against the macroeconomic objectives.

Examples of possible scenarios:

• exploring policies that the government could implement in order to improve current economic conditions
• analysing the impact of a policy decision when the economy is in a particular phase of the business cycle
• evaluating the effectiveness of the current fiscal and monetary policies in achieving a macroeconomic objective
• evaluating the impact of changes in the external balance on the economy.

Trade and globalisation

Students develop an understanding of trade and globalisation. They apply economic thinking to analyse the advantages and disadvantages of free trade, the impact of externalities, and the impact of trade and globalisation on consumers, producers, the economy, and society. 

Examples of possible scenarios:

• analysing the change in the direction, composition, and value of a nation’s trade in response to globalisation
• using absolute and comparative advantage theory to examine which goods a country should produce for export
• analysing the contribution that free-trade policies have in the prosperity of an economy.

Wealth, poverty, and inequality

Students apply economic thinking to explore the ways in which wealth, poverty, and inequality are measured, and how individuals, institutions, and governments can develop effective solutions to the problem.

Students analyse the impact of wealth, absolute and relative poverty, and inequality on economic and social systems. They consider the ways and means of promoting economic and human development.

Examples of possible scenarios:

• analysing why development has many dimensions that must be assessed through a variety of individual and composite indicators, both economic and social.
• examining the causes of inequality and the distribution of income and wealth in a country
• evaluating the costs and benefits of pursuing redistribution of income and wealth in a country
• evaluating the insights that poverty reports within a country provide regarding the concept of poverty in comparison to the United Nations Human Development Index Report.
• evaluating whether inequality matters not only for those at the poorest end of the distribution, but for society as a whole.

The environment

Students apply economic thinking to develop an understanding of the relationship between economic activities and the environment. They analyse the impact of economic decisions on the environment, analyse the trade-off between economic growth and economically sustainable development, evaluate strategies to address environmental issues.

Examples of possible scenarios:

• examining the importance of resources and the economic impact of environmental disasters
• analysing the costs and benefits of economic activities on the environment
• analysing the conflicts between macroeconomic objectives and environmental sustainability
• analysing whether it is possible to reconcile economic development with environmental sustainability.

Health

Students develop an understanding of health economics. They investigate how resources are allocated in the health industry, analyse the factors behind health economic decisions, and develop an understanding of how costs and benefits are evaluated in the decision-making process. Students apply economic thinking to investigate issues of market failure in health economics and potential responses to market failure in health care.

Examples of possible scenarios:

• investigating the decision models used in providing effective health care
• analysing the long-term economic impact of providing universal primary health care
• analysing the factors influencing demand and supply in the health-care market.

Sport and entertainment

Students develop an understanding of the connections between economics and the sport and/or entertainment industry.

Students apply economic thinking to investigate how sport and/or entertainment markets operate. They consider the domestic and international markets for: players or performers, sponsorship, and audiences; market failure; and the intended and unintended consequences for externalities.

Examples of possible scenarios:

• evaluating the need for a salary cap for sports teams
• evaluating various strategies used to determine ticket prices
• investigating how economic resources are used in sport or entertainment
• analysing the economic impacts on an economy of hosting a major sporting, entertainment, or cultural event.

School-developed context

Teachers may collaborate with students to develop a scenario in which students have the opportunity to apply economic concepts, principles, models, and skills.

Possible scenarios include, but are not limited to:

• education
• housing and urban development
• Indigenous market systems
• international economies
• stock markets and finance
• the networked economy
• economic development.