Teaching and learning

Detailed example 1

Class debate / council meeting simulation: the overdevelopment of your school / local area

Separate students into small groups of three or four, each representing a certain organisation.

Ask the class to consider an important community issue: the redevelopment of a local park into apartments / office building.

Ask each group to present to the local council meeting.

Some possible examples of organisations:

1. VicRoads: concerned with traffic implications
2. Save our suburbs (SOS): concerned with potential over-development of the community
3. Affordable Housing Rental Scheme: concerned with ensuring Australians have access to affordable housing
4. Developers: wishing to develop the site into apartments 
5. Workers union: representing the workers whose jobs will be created during and after construction
6. The school principal team: representing your school’s interests 
7. Local sporting team: who will lose access to their facilities
8. The local council: mediator of the meeting (teacher)

Each group should use the following ‘talking points’ when presenting to the council:

1. Provide a brief history and purpose of your organisation.
   
2. Explain the stance on the issue as a group / organisation.
3. Make three normative statements and three positive statements about the proposed development that support your stance.
4. Outline changes to the proposal that you would like to see from the perspective of the organisation or group that you represent.

Question time

Allow students time to prepare questions for other groups once the meeting has finished. Each group is required to ask two questions of other groups in order to better understand the issue from different perspectives.

The council (teacher) then should make a decision and final statement, weighing up the costs and benefits.

Reflection

Students complete the following individually:  

• Describe three overall costs and three overall benefits of the development.
• Explain the importance of weighing up all costs of benefits when making a decision like this one.
• Explain why scarcity is important with this issue. What are the scarce resources in this instance?
• Explain how opportunity cost is an important consideration in this situation for the community.

Detailed example 2

Research task: Economic systems

Allocate students into groups of two or three and assign one country to each group from the list below and complete the following activities:

1. List the three different types of economic systems. 
2. Describe two characteristics of each economic system.

In their groups, students consider the role of the government / market in the specific country assigned to them by considering the following questions and then reporting back to the class:

3. In your country, how are the three economic questions answered? (Give examples to support your answer.)
1. What does the country produce?
2. How does it produce that? 
3. For whom does it produce that?

Extra research questions:

• To what degree is healthcare and education free in the country?
• What type and how much ($) welfare is available? Compare this to the median household income in the country.

Give examples of the following:

• goods and services the government provides
• goods and services the market provides
• taxes businesses and consumers must pay
• government subsidies for businesses.

What other roles does the government play in economic life? (Provide examples.)

4. Draw a continuum to illustrate the spectrum of different systems like the one below:
   
   
5. Using the data you have found, plot your country on the continuum.

Each group presents their findings to the class. Then individually students complete the reflection activity.

Reflection activities

1. Plot all other countries on your continuum.
2. Define a cost / benefit analysis and give an example of when you might have to complete a cost / benefit analysis in your life.
3. Complete a cost / benefit analysis for each economic system by listing two costs and two benefits for each different economic system. (You may wish to use a table.)
4. Explain why there is an opportunity cost for countries when they adopt a certain economic system.
5. Write a paragraph evaluating Australia’s current mixed economic system.

Detailed example 1

Demand and supply cards

This is a small group activity (four students per group).

1. Design four sets of cards – see below for each suggestion for each set:
Set one: 10 different demand side non-price factors
Set two:  10 different supply side non-price factors
Set three: 10 different types of goods
Set four:  10 different types of services
Students work in small groups to complete the task.
2. Each student in the group takes it in turn to pick two cards – one from either of the sets of the non-price factors, the other from the set of goods or services. The student then draws a fully labelled demand and supply diagram to illustrate and explain the possible impact of the cards chosen.
3. The group can then discuss whether the drawing and scenario given is correct and feasible.
4. Students could then also discuss other options for the same set of cards.

The repetition of drawing new diagrams each time will give students practice in ensuring they draw the shifts in the demand or supply curve correctly, as well as marking in the changes to price and quantity and the movement along the opposite curve. They also need to label each graph drawn. All drawings should be done in pencil so that correction is easy.

Students could add to the list of goods and services as they complete this task.

Demand-side non-price factors: each factor needs to be printed on a separate card, with demand-side non-price factors on one side and the factor on the other side:

• Household disposable income
• Population growth and demographic change
• Government taxation
• The time of year – seasons of the year
• The time of year – festive events
• Interest rates
• The price of substitute goods / services
• The price of complementary goods / services
• Preferences and tastes – fads, fashion and trends
• The level of consumer confidence

Supply-side non-price factors: each factor needs to be printed on a separate card, with supply-side non-price factors on one side and the factor on the other side:

• A change in the cost of employing labour
• A change in the cost of utilities
• A change in the cost of raw materials
• A change in the cost of petrol / oil
• A change in the rate of productivity growth
• A change in the cost of capital equipment
• An increase in technological advancements
• A change in the level of industrial action
• A change in climatic conditions
• Unexpected supply-side shocks: political, medical, social at a global or national level

A sample list of goods: each good needs to be printed on a different card, with Goods on one side and a type of good on the other:

• Ice-cream
• Fish
• Apartments
• Electric cars
• Gaming consoles
• Skateboards
• Sunglasses
• Antibiotics
• Textbooks
• Umbrellas

A sample list of services: each service needs to be printed on a different card, with Services on one side and a type of service on the other:

• University education
• Internet
• Streaming services
• Doctor visits
• Childcare
• Mining
• Hairdressing
• Aviation
• Hospitality
• Solar power

Detailed example 2

Case study: A market

This is an extended research task that involves students undertaking a detailed investigation of the operations of a contemporary market (any market that has operated in the past ten years). The VCE Economics Study Design lists a range of different markets, students either select one of these , or investigate a market of their own choosing. Alternatively, students may be allocated a market to study. Some examples are:
The Australian Securities Exchange
The Australian Energy market
The Australian Housing market and The Grattan Institute
The Foreign Exchange market

1. Describe the nature of this market:
• type of good / service
• size / scale of the market
• location of the market (local, regional, state, national, global).
2. Describe the operation of this market:
• How does buying / selling typically occur?
• How is price determined?
3. Describe the general characteristics of buyers in this market:
• general level of income
• demographics.
4. Describe the general characteristics of sellers in this market:
• typical business structure.
5. Develop a list of questions (minimum five) in order to interview one buyer and one seller about their activities in this market.
6. Interview at least one person employed in the industry that this market is in.
7. Explain four non-price factors / conditions that influence demand in this market.
8. Using demand and supply curves, show diagrammatically and explain four non-price factors that affect demand in this market and the effect on price and quantity, and how equilibrium price moves from the original equilibrium to the new equilibrium.
9. Explain four non-price factors / conditions that influence supply in this market.
10. Using demand and supply curves, show diagrammatically and explain four non-price factors that affect supply in this market and the effect on price and quantity, and how equilibrium price moves from the original equilibrium to the new equilibrium.
11. Explain the influence of any sectors, groups or organisations in this market on price and / or quantity bought / sold:
• government regulations: laws, taxation
• groups such as lobby / pressure groups-unions, environmental
• organisations such as professional / trade associations.
12. Explain any existing and proposed types of government intervention in this market:
• existing or proposed laws, taxation, restrictions.
13. Explain the level of competition in this market:
• Who are the competitors?
• How competitive is this market?
• What is the degree of market power in this market?
14. Gather, synthesise and use economic data and information from a wide range of sources to analyse variations in prices in your market over time. Account for some of the variations in prices over time.
15. Collect two online media articles about this market from the last 12 months. Pose one question for each article and write a detailed answer to your question.
16. Predict and justify what changes may occur in your market in the coming 12 months:
• Price changes
• Size / scale of market
• Number of buyers and sellers.

Detailed example 1

Case Study: Behavioural Economics Team of the Australian Government (BETA)

Reference: BETA

Examine the work of BETA in developing policies using behavioural insights to change human behaviour in a certain way in Australia. Before selecting a project to study, explore the work of BETA using the various links on their website. Complete the following activities to learn about BETA.

Individual responses

Short answer questions

1. Why does the Federal Government have a behavioural economics team operating in the Department of Prime Minister and Cabinet?
2. What range of specialists work in BETA and why do BETA specialists collaborate on projects?
3. What are behavioural insights and how are they useful for policy design?

Extended responses

4. Select one BETA blog and summarise the information contained in this blog.
5. Allocate each student a different podcast to listen to and then ask them to report back to the class using a Plus, Minus, Interesting (PMI) approach.

Group Task

Case study: BETA project that is either an Advisory Report or an Evaluation Report

6. Select one completed project undertaken by BETA over the past two years in a policy area that interests you. As you investigate that project / report, complete the following written work:
1. Describe the purpose of the project / report.?
2. Describe the methodology used to complete this project / report.
3. Summarise the findings of this project / report.
4. Explain any policy development and / or consequences from the findings of this project / report.

Detailed example 2

Behavioural economics experiments

This group work or paired task enables students to learn about behavioural economics through hypothesising and conducting an economics experiment. Behavioural economics is a subset of economics and is a method of economic analysis that applies psychological insights into human behaviour to explain economic decision-making. This field of economics suggests that consumers are subject to a range of psychological biases and use various rules of thumb when making choices. As such, behavioural economics focuses on observations about how people behave in certain circumstances.

The research undertaken could be collected through the use of a survey and / or through conducting a field experiment.

Ideas for student investigation

• Would incentives encourage students to put their rubbish in bins?
• Are student absences more common on a Monday?
• Are the healthiest foods located more conveniently in school canteens / cafes / supermarkets?
• Would students submit assignments on time if they were paid to do this?
• Are students with surnames beginning with A–G more likely to do their homework than students with surnames beginning with H–Z?
• Any other idea of interest.

The following example is based on the first idea listed above.

Experiment 1

Aim

Hypothesis

‘That the littering behaviour of students can be changed by using rewards’

Method

The focus is on fieldwork conducted by observation and then interviewing students who litter.

Subjects

Subjects should be selected based on the research required.

Materials

• pen and paper and / or laptop for documentation of observations, and / or
• one survey for subjects to complete, and
• rewards to be used in the experiment (for example, lollies, chocolates or $0.10 coins).

Procedure

• This fieldwork should be conducted over one week in various areas around the school.
• Each student observes and records the number of students who do and do not dispose of their rubbish correctly.
• Day 1 and Day 2 are for observations, recordings and interviews of only those who litter.
• Day 3 and Day 4: Students who dispose of their rubbish correctly receive a reward, for example a lolly. Students who litter should be surveyed.
• Each day, students should survey 5–10 students who do not dispose of their rubbish correctly. This means that each pair of students will have 50–100 sets of data to analyse.
• Day 5 and Day 6 are for observations and recordings to see if littering has decreased overall.

A standard procedure could be followed with each subject, for example:

1. Record your observations of the number of students who do put their rubbish in the bin and record those who do not put their rubbish in the bin. Target the students who litter.
2. Approach the potential student and say ‘I am an economics student doing a survey on economic behaviour for one of my school assessments, would you mind if I ask you a few short questions? This survey is entirely anonymous’.
3. If the subject indicates willingness to take part, ask the questions you have prepared.
4. Record the year level and gender and then say: ‘For each of these questions, could you please answer as best you can:
• Why didn’t you put your rubbish in the bin?
• What would encourage you to do the right thing and put your rubbish in the bin?
• Could you please rank the following incentives (1 = most preferred and 6 = least preferred) to not litter – from most appealing to least appealing:
  • increasing the number of bins around the school
  • having signage near the bins
  • having footprints on the ground near bins that lead you to the bins
  • placing signs in and around the school that say ‘most students do the right thing and put their rubbish in bins’
  • receiving a ‘non-financial’ reward (for example a lolly) each time you do the right thing
  • receiving a ‘financial’ reward (for example $0.10) each time you do the right thing.

Results

Students work in pairs to collate their results and present their findings

Economic analyses

General questions to consider

• What factors other than incentives determine if students’ litter? (Punitive action by the school? Location of bins? Number of bins? Size of bins?)
• Does the school have maintenance staff cleaning up after students?
• Do students have environmentally friendly responsibilities such as cleaning rosters to look after the environment?
• Is there a ‘no litter’ campaign in place?

Specific economics questions to consider

• Who bears the cost of the negative externality (of littering) at your school?
• What actual costs are involved in littering at your school? (Bins, signs, wages, campaigns, yard-duty.)
• What economic costs and economic benefits are involved in using incentives to reduce littering?
• Are incentives necessary to reduce littering?
• Which incentive is more appealing: a financial reward or a non-financial reward?

Conclusions

Conclusions will relate to whether or not the hypothesis can be accepted. If it cannot be accepted, or is only correct in part, then a detailed explanation for the total or partial rejection should be given. Write a general conclusion.

Experiment 2

Aim

To investigate links between a nudge and students’ rubbish disposal at school.

Hypothesis

‘That students littering behaviour can be changed by using a simple litter-reducing approach’.

Method

The focus is on fieldwork conducted by observation of students who litter and those who do not.

Subjects

Subjects should be selected based on the research required.

Materials

• pen and paper and / or laptop for documentation of observations
• wrapped lollies
• a large number of green footsteps cut out and adhered to the ground leading to bins around the school.

Procedure

• This fieldwork should be conducted over a week in various areas around the school.
• Each student will observe and record the number of students who do and do not dispose of their rubbish correctly.
• Days 1 to 3 are for observations and recordings of those who litter and those who do not when free wrapped lollies are given out to students.
• At the start of Day 4, place a number of large green footsteps on the ground (use self-adhesive material) leading to bins in and around where students typically sit.
• Day 4 and Day 5 are for observations and recordings to see if the green footsteps encourage students who receive wrapped lollies to now place their wrappers in the bins.

Results

Students work in pairs to pool their results and present their findings.

Questions to consider

• Does litter attract more litter? Why is this the case?
• Are the bins attractive? Are the bins easily seen? Are the bins well located? Are bins regularly emptied? Are there enough bins?

Conclusions

Conclusions will relate to whether or not the hypothesis can be accepted. If it cannot be accepted, or is only correct in part, then a detailed explanation for the total or partial rejection should be given. Write a general conclusion.

Detailed example 1

Understanding economic activity using the circular flow model and the business cycle

Students complete the following activities:

1. Draw the five-sector circular flow model, annotating each flow.
2. Outline the roles of each sector:
1. Consumers / households
2. Producers / businesses
3. Governments
4. External
5. Financial.
3. Using the five-sector flow model, explain what happens to economic activity and AD under the following scenarios. In your answer refer to the impact on the relevant flows. For example, decreases taxes (T) and increases consumption (C) increasing economic activity and AD.
1. The government announces an increase in spending on schools and hospitals.
2. The government announces a decrease in the personal tax rate.
3. There is a decrease in the average household disposable income.
4. The RBA announces an increase in interest rates.
5. The government announces incentives for businesses to invest in capital and equipment.
6. There is an appreciation in the value of the AUD.
7. Bottlenecks appear in businesses supply-chains.
8. There is a drop in economic growth in China.
9. There is a depreciation in the AUD.
10. There is an improvement in Australia’s international competitiveness.
4. Distinguish between AD and AS factors.
5. Using five-sector flow model, identify which flows affect AD first and which flows affect AS first.
6. Draw the business cycle labelling all four stages.
7. Using the circular flow model, explain the impact of the following stages of the business cycle on economic activity:
1. an expansion
2. a contraction
3. a peak
4. a trough.
8. Using the circular flow model, explain how economic activity impacts material living standards.
9. Explain the relationship between economic activity and GDP.

Detailed example 2

Invention of the economy podcast

Students listen to the NPR podcast, 'The invention of the economy'. (It is episode 522.)

1. In your own words, what is ‘the economy’?
2. According to the podcast, explain why the term ‘the economy’ was invented.
3. Define GDP (national income) and explain why it’s important to living standards.
4. Describe one problem the podcast outlines in ‘how’ to measure GDP.
5. Explain one possible limitation of using GDP to measure the living standards of a country.
6. Suggest one alternative measure and explain why this is a better measure of living standards.
7. According to this podcast how did understanding ‘the economy’ help win the Second World War?
8. ‘If you can name something (the economy), you can control it’.  Discuss the extent to which you agree/disagree with this in context of ‘the economy’.

Students discuss their answers as a class and link back to the key knowledge and key skills in the VCE Economics Study Design.

Detailed example 1

International organisations, trade and globalisation

This activity involves research, presentation and a class conference on the topic of international organisations, global alliances and trade agreements.

Students are allocated an international organisation, trade alliance or trade agreement (see list below).

Students create an A3 poster about their organisation, using Canva or another digital platform. Using a combination of text (typed), photos, charts, tables and / or graphs, the poster should provide information that includes:

• the history, purpose and activities of the alliance
• the effect on trade of the alliance
• recent developments to the alliance

OR

• the nature and purpose of this trade agreement
• the effect on trade of this agreement
• the economic costs and benefits of this agreement

Completed posters are displayed for the class to read. Each student presents some of their findings and responds to a range of questions at a class conference.

Class conference

Questions and statements for discussion

• Provide reasons why trade blocs are important.
• Many people argue that certain international organisations (such as the World Trade Organisation (WTO)) only work to protect the interests of rich countries.
• The United Nations (UN) is imperfect but indispensable.
• Why isn’t China in the G8?
• What are the roles of organisations such as the OECD, the World Bank and the IMF?
• Explain whether economic trade forums result in concrete benefits for the world economy or regional economies?
• What are the key arguments of anti-trade and pro-trade groups?
• Why are there more bilateral trade agreements than multilateral trade agreements?
• What are some of the costs and benefits of multilateral trade agreements?
• How free are Australia’s bilateral free trade agreements (FTAs)?
• Have global living standards risen alongside trade liberalisation?

Key international organisations

• World Bank
• International Monetary Fund (IMF)
• World Trade Organisation (WTO)
• Group of 7/8 (Richest Countries G7/G8)        
• Organisation for Economic Cooperation and Development (OECD)
• United Nations (UN)

Key world forums

• World Economic Forum
• Group of Twenty (G20)
• Pacific Islands Forum

Major trade alliances

• European Union (EU)
• Asia–Pacific Economic Cooperation (APEC)
• Regional Comprehensive Economic Partnership (PCEP)
• Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
• The ASEAN–Australia–New Zealand Free Trade Agreement (AANZFTA)
• Pacific Agreement on Closer Economic Relations (PACER) Plus

Australia’s trade agreements and alliances

• Australia–New Zealand Closer Economic Relations Trade Agreement (ANZCERTA or CER)
• Japan–Australia Economic Partnership Agreement (JAEPA)
• China–Australia Free Trade Agreement (ChAFTA)
• Australia–Hong Kong Free Trade Agreement (A-HKFTA)
• Australia–Chile Free Trade Agreement (ACI-FTA)
• Australia–USA Free Trade Agreement  (AUSFTA)
• Singapore–Australia Free Trade Agreement (SAFTA)
• Peru–Australia Free Trade Agreement (PAFTA)
• Korea–Australia Free Trade Agreement (KAFTA)
• Thailand–Australia Free Trade Agreement (TAFTA)
• Malaysia–Australia Free Trade Agreement (MAFTA)
• Indonesia–Australia Comprehensive Economic Partnership Agreement (IA-CEPA)
• Update and add Australia’s signed FTAs as they appear on the DFAT website
  

Australia’s FTAs under negotiation

Detailed example 2

Economics of international trade and globalisation

The Australian Dollar (AUD)

Examine the hypothetical factors listed below and research actual current factors that cause the AUD to depreciate or appreciate. Students research and describe a range of aggregate demand and / or aggregate supply factors that influence the AUD.

References

Reserve Bank of Australia
Australian Bureau of Statistics
News media

1. Visit the RBA website to snip a copy of the graph of the AUD against the USD, then answer the following questions:
1. Describe the trend in the AUD over the past two years.
2. Explain three factors that may have influenced the AUD over the past two years.
3. Explain two reasons why the AUD depreciated to $0.55USD on 24 March 2020.
2. Using the scenarios listed below, decide on the following:
• Are there aggregate demand and / or aggregate supply side factors that could influence the AUD?
• Is the stated factor likely to cause the AUD to appreciate or depreciate?

Draw a fully labelled graph to support your decision and explain how the new equilibrium is reached.

Scenarios

• Global commodity prices are very high.
• Australia has a shortage of skilled workers.
• The RBA has increased the cash rate, narrowing the interest rate differential with the USA.
• Australian grain growers have had a bumper crop this year.
• Australia’s terms of trade are the lowest they have been in two years.
• Australia’s inflation rate is lower than that of most of our major trading partners.
• Economic growth has increased in the countries that are our major trading partners.
• Australia’s multifactor productivity rates have increased.
• Real wages growth in Australia is very low.
• The price of gold rises sharply.
• The number of overseas students studying at Australian universities doubles.
• The USD appreciates by 20%.
• Global consumer and business confidence decreases.
• Australia’s emigration numbers exceed immigration numbers.
• The price of oil decreases by 10%.
• It is company reporting season and Australia’s ASX listed companies pay dividends to their overseas shareholders.

Detailed example 3

Distribution of income and wealth

This activity is a simulation that could be used to introduce the topic of income distribution.

Step 1

At the beginning of class, ask students to answer ten random questions about economics. These could include questions such as ‘Who is Australia’s Treasurer?’, ‘Is Australia currently experiencing strong rates of economic growth?’, ‘State one way we could measure Australia’s standard of living’, ‘What is a potential benefit associated with economic growth?’, ‘What is a potential cost associated with economic growth?’, ‘In economics what is meant by the term factors of production?’, ‘Is Australia’s current inflation rate rising or falling?’

Step 2

When the quiz is over, indicate the correct answers and ask students to calculate their ‘score’ (10 marks are awarded for each correct question so the total is out of 100). Explain that the quiz score indicates their ‘work’ so that if a student gets 70, this equates to $70 earned.

Step 3

Teacher writes 100, 90, 80, 70... on whiteboard, and next to each score, writes down how many students earned that result. As a group, students add all the scores together. Teacher informs students that this represents total income earned by class through its work (on the quiz). This might for example add up to a total income earned of $1660.

Step 4

Teacher breaks class into small groups. Each group brainstorms ways in which this income that has been generated from their work undertaken in the quiz might be divided up/distributed across the class. (Brainstormed examples might include: each student is allocated what they earned; students may pay portion of their earnings as tax so that some earnings are available for redistribution so that everyone is provided with a guaranteed minimum income; all is collected and kept by the teacher; income is distributed to females only; income is split evenly across all participants; income is distributed to those with blond hair; and so on.) Each group considers the list of possible brainstormed ways and selects the best method of distribution from their viewpoint.

Step 5

Each group, in turn, presents their preferred allocation method and explains why they chose that method of distributing the available income.

Step 6

As a post-simulation exercise, students discuss what is meant by ‘a fair or equitable share of income’ and possible ways to achieve fair or equitable income distribution.

Step 7

On completion of steps 1–6, students write a short paragraph outlining what they believe is meant by an economic goal of a fair or equitable distribution of income.

Detailed example 4

Distribution of income and wealth – Unequal resources game

This game explores how access to resources may be a factor that impacts the distribution of income and wealth at an individual and / or regional and / or country level.

Step 1

Teacher prepares resources for four teams and places the resources in four large envelopes, each one labelled with a team’s number.

Resources for each team

Team 1:
1 pair of scissors, 1 ruler, 10 pins, 3 pencils, a stapler but NO STAPLES, 1 A4 sheet of white paper

Team 2:
1 pair of scissors, 1 bottle of glue, 3 x 11 cm by 11 cm squares of coloured paper (red, green, blue)

Team 3:
6 felt pens (red, green, purple, orange, black) and 2 x 11 cm by 11 cm squares of coloured paper (orange, purple)

Team 4:
1 box of staples to fit team 1’s stapler, 6 x 11 cm by 11 cm squares of coloured paper (2 red, 1 orange, 1 blue, 1 green, 1 purple)

Note: Do not exceed these allotments. Other colours may be substituted but in the same proportions. The task sheet must be changed if other colours are substituted.

Place each team’s resources in a labelled envelope with a copy of the task sheet. (Do not let teams at this stage see that each team has different resources).

Step 2

Each team is given their allocated resources in labelled envelopes with a copy of the Task Sheet.

Task Sheet

Each team is to complete the following tasks:

1. Make a 7 cm by 7 cm square of white paper
2. Make a 9 cm by 4 cm rectangle of red paper
3. Make a four-link paper chain, each link in a different colour
4. Make a T-shaped piece 7 cm by 11 cm in green and white paper
5. Make a 9 cm by 9 cm flag in any three colours.

The first team to complete all tasks is the winner.

Step 3

Play the game

1. Divide the class into four teams.
2. Distribute the envelopes of resources to each of the teams. Tell them not to open envelopes until a signal is given.
3. Read out these instructions: ‘Each team has different materials and tools but each team must complete the same tasks. The tasks are listed on the task sheet in the envelope. The first team to complete the tasks are the winners. Begin now.’
4. As the game goes on, the teacher observes as much group and individual behaviour as possible, making note of comments overheard, which may be useful in the debriefing session.
5. When a team declares its tasks completed, check each item for conformity to a specified standard. Reject any items that do not meet the standard. Teams that fail to meet standards may return to work!
6. Declare as winner the first team to complete all five tasks exactly as described.

Step 4

Debrief

Use these questions as a guide to debrief and stimulate discussion.

1. What happened in the game?
2. How did you feel about your team’s resources?
3. How did you feel about other team’s resources?
4. Was there conflict? Anger? Frustration?
5. Between which teams was there conflict and how did it start?
6. How was the conflict resolved?
7. What helpful offers or bargains were made?
8. Who took the initiative in planning strategy?
9. Was there any individual or team you did not trust? Why?
10. Did anyone feel ignored or treated with lack of consideration?
11. In the game, did you do anything contrary to your own values? How did you feel about this?

Step 5

Discussion and conclusions

1. What were the factors that helped the winning team to win?
2. What were the factors that helped the losing teams to lose?
3. How was this game like life? How was it unlike life?
4. Which countries are like Team 1? Team 2? Team 3? Team 4?
5. Which team is most like Australia? Why?
6. What sorts of insights or conclusions might be drawn from this activity about the distribution of income and wealth at an individual and / or region and / or country level?

Detailed example 1

Demand and supply auctions

Ask the class to vote on their favourite music artist. Collate the votes and find the most popular artist.  

Demand-related auction

Tell students their chosen artist is playing their last show in Victoria and you are going to the concert. Ask them ‘Who is willing and able to come with me?’ Go through each price point noting how many people would purchase tickets at each price. Ask students who ‘drop out’ to consider their reason for doing so.

Record the findings in a table on the whiteboard, for example:

Demand schedule

Ask a student to plot a class demand curve using the data above.

• Demand indicates a willingness and ability to purchase goods and services.
• A demand curve represents this graphically at different prices (note that it is downward sloping).
• The Law of Demand predicts that as the price of a good or service increases, the total quantity demanded decreases and as the price decreases the total quantity demanded increases. Thus, there is an inverse relationship between quantity demanded and price.
• Explain to students the two reasons for the downward shaping demand curve, known as the income and the substitution effect.
• Ask students to recall when they dropped out of the market; for example, at which price they dropped out. Call on some students to explain why they dropped out. Help students link the discussion back to the income and substitution effect.

Supply-related auction: Car Wash (for example, cleaning a car inside and out).
Show students an image of a dirty car.

Ask students ‘Who is willing and able to wash the car for…? (See prices in the table below.)

Record the findings in a table on the whiteboard, for example:

Ask a student to plot a class supply curve using the data from the auction.

• Supply indicates a willingness and an ability to supply goods and services.
• A supply curve represents this graphically at different prices (note that it is upward sloping).
• The Law of Supply predicts that as the price of a good or service increases, the total quantity supplied increases, and when the price decreases the total quantity supplied decreases. Thus, there is a positive relationship between quantity supplied and price.

Explain to students that this is because of the profit motive. When all else remains equal, if prices rise, profits will rise for suppliers. Hence this will lead to an increase in the quantity supplied.

Detailed example 2

Demand and supply analysis

The famous English economist Alfred Marshall who popularised demand and supply curves, once quipped

‘We might as well reasonably dispute whether it is the upper or under blade of a pair of scissors that cuts a piece of paper, as whether value is governed by demand or supply.’

In other words, it is the interaction of demand and supply that determines the prices of goods and services, along with the quantities traded in all types of markets.

Step-by-step demand and supply analysis

Alfred Marshall’s profound insight that demand and supply together determine a market’s equilibrium can be illustrated using demand and supply diagrams. The equilibrium price and quantity traded depend on the positions of the demand and supply curves. When some event (a factor other than price) shifts one of these curves, the result will be a new equilibrium price and quantity traded in the market.

When analysing how a factor affects the equilibrium in a market, apply the following steps:

1. Decide whether the factor shifts the demand curve or the supply curve.
2. Decide which direction the curve shifts:
   • a shift of the demand curve to the right shows an increase in the demand for the good or service at each and every price level
   • a shift of the demand curve to the left shows a decrease in the demand for the good or service at each and every price level
   • a shift of the supply curve to the right shows an increase in the supply of the good or service at each and every price level
   • a shift of the supply curve to the left shows a decrease in the supply of the good or service at each and every price level.
3. Determine whether the shift in the relevant curve results in a shortage (QD>QS) or surplus (QS>QD) of the good or service at the initial equilibrium price. This is done by comparing the position of the curve that has shifted with the curve that has not shifted. A shortage exerts upwards pressure on price, while a surplus exerts downward pressure on price.
4. Determine how the quantity demanded and quantity supplied respond to the pressure on price:
   • a contraction in the quantity demanded, shown as an upward movement along the downward sloping demand curve
   • an expansion in the quantity demanded, shown as a downward movement along the downward sloping demand curve
   • a contraction in the quantity supplied, shown as a downward movement along the upward sloping supply curve
   • an expansion in the quantity supplied, shown as an upward movement along the upward sloping supply curve.
5. Use the demand and supply diagram to see how the shift in demand or supply changes equilibrium price and quantity traded. This involves comparing the initial and new market equilibrium.

Worked examples

A change in the market equilibrium due to an increase in demand

Let’s assume that the price of a PlayStation console fell by 30%. How might this event affect the price of PlayStation controllers? To answer this question we need to apply the five steps outlined above.

1. The decrease in the price of a console affects the demand for controllers because controllers are a complementary good. That is, controllers are consumed with a console. This will affect the amount of controllers that consumers demand at each and every price level.
2. Because consoles are cheaper consumers buy more of them, leading to an increase in demand for the complementary good too – controllers. This can be illustrated in Figure 1 as a shift of the demand curve to the right from D1 to D2. This shift indicates an increase in demand for controller at each and every price level.
3. The shift in the demand curve for controllers from D1 to D2 results in a temporary shortage of controllers at the initial equilibrium price of P1 as D2 and S1 are not equally matched. This is illustrated as the distance between QD and QS/Q1.
4. This shortage exerts upward pressure on the price of controllers, resulting in a contraction in the QD (upward movement along the new demand curve, D2) and an expansion in the QS (upward movement along S1) until a new equilibrium price is reached.

As Figure 1 shows, the increase in demand raises the equilibrium price from P1 to P2 and the quantity traded from Q1 to Q2. In other words, the decrease in the price of a PlayStation console results in an increase in the price of controllers and an increase in the quantity of controllers traded.

Explanation of how an increase in demand affects the equilibrium

Detailed example

Predict, observe, explain exercises

Conduct ‘predict, observe, explain (POE)’ exercises to track changes in the economic indicators used to measure the performance of the three domestic macroeconomic goals over the course of the year.

Step 1

Step 2

Step 3

Observe the actual announcement related to the change in the indicator and record the actual result in your table.

Step 4

Note the difference between the actual result and your prediction. Was your prediction right or did you over estimate or underestimate the change? Explain reasons why your prediction was correct, or over or under estimated, by outlining the demand and supply factors that were put forward as the factors explaining the actual result.

Detailed example 1

Balance of payments (BOP) task

1. Provide each student with a copy of the BOP template (below) as well as a copy of the scenarios listed below. Students should decide:


• whether the scenario represents a credit or debit on the BOP
• whether the scenario is in the Current account or the Capital and Financial account
• which exact sub-account it belongs to (i.e. the exact component it is).


2. Ask each student to write ten hypothetical scenarios for a credit and a debit situation on the current account and five hypothetical scenarios for a credit and a debit situation on the Capital and Financial account. Compile these scenarios as a class and use them to examine and check students’ understanding of the balance of payments.

Hypthetical scenarios

Detailed example 2

The effect of AUD exchange rate movements

1. Work in pairs to discuss and then explain in writing how a 10% depreciation of the AUD would likely impact on the following sectors, groups or individuals:
• Australian motor vehicle importers
• Qantas airlines
• Australian universities
• Australian beef farmers
• Australian tourism industry
• Australian pensioners living overseas
• Australia’s luxury property market
• Australian Securities Exchange
• Australian mining industry
• Australian consumers purchasing foreign goods
• Australian firms investing in imported capital equipment
• Australian students studying overseas
• New (Australian) investors seeking to invest overseas
• The RBA purchasing foreign bonds
  
2. Work in pairs to discuss and then explain in writing how a 15% appreciation of the AUD would likely impact on the following sectors, groups or individuals:
• Foreign students wishing to study in Australia
• Australian hospitality and tourism industries
• Australian firms reliant on imported capital and/or components used in production
• Australian tertiary education sector
• Australians travelling abroad
• Foreigners wishing to buy Australian property
• Australian exporters
• Australian manufacturing sector

Detailed example 1

Budgetary policy

Structured questions

Distinguish between the following pairs of terms and use current information to support your answer:

• deficit budget and surplus budget
• budget stance and budget outcome
• automatic stabilisers and discretionary stabilisers
• direct taxation and indirect taxation
• expansionary stance and contractionary stance of budgetary policy
• progressive, regressive and proportional taxation
• marginal rate of tax and average rate of tax
• budget outlays and budget receipts
• monetary policy and budgetary policy
• government assets and government liabilities
• government current expenditure and government capital expenditure and transfer payments
• government (public) debt and private debt
• material living standards and non-material living standards
• actual budget outcome and estimated budget outcome
• fiscal policy and fiscal strategy
• underlying cash outcome and headline cash outcome
• implementation lag and impact lag
• gross government debt and net government debt
• crowding out and crowding in

Detailed example 2

Post-budget activities

Structured questions

Part A: Post-budget class conference

Participate in a post-budget class conference to analyse the opinions and reactions of a range of key stakeholders to the most recent budget. The Australian Government’s Budget is a complex and important economic document handed down in May each year. As an economics student, it is important to watch the Budget, as well as read and follow the post-Budget analyses.

In this activity, students work in pairs to research and report back on the reaction to the Budget by the group or organisation they are allocated.
Students should:

• introduce the group, organisation or person
• explain their role
• present the reaction of their group, organisation or person to the Budget
• discuss the impact of specific Budget measures on their key stakeholders.

The most useful resources for this task will be the Australian Government budget website. In addition, print and online media will have extensive post-Budget reports covering a wide range of views and detailed analysis.

The leaders and CEOs of the following groups or organisations could attend the post-Budget breakfast forum:

• The Australian Council of Social Services
• The Australian Council of Trade Unions
• The Business Council of Australia
• The Leader of the Australian Labor Party
• The Leader of the Liberal National Party
• The Leader of the Australian Greens
• Journalist/s from TheAge, The Australian Financial Review
• Chief Economists from the Banks
• CEO of the Council for Small Business
• CEO of Australian Seniors
• University Economics Academics
• Australian think tanks: Grattan Institute, Committee for Economic Development of Australia (CEDA), The Australia Institute, Per Capita, and others.

Part B: Post-budget individual work

During Budget week, students gather information from the significant amount of media coverage of the Budget and then answer the following questions:

1. List the top three sources of government revenue.
2. List the top three areas of government expenses.
3. What is the estimated budget outcome for this year’s budget and what proportion of GDP is this?
4. Using budget figures, identify the budget stance for the past two years.
5. Explain the key methods of financing a budget deficit.
6. Explain two ways in which the government might use a surplus.
7. Using budget figures, explain the relationship between the budget outcome and the level of government (public) debt.
8. Describe the trend in the budget outcomes for the past four years.
9. Explain the role of automatic stabilisers in influencing aggregate demand and stabilising the business cycle.
10. Describe how five different discretionary stabilisers may influence aggregate demand and stabilise the business cycle.
11. Analyse the likely effect of the discretionary stabilisers (in question 10) on the budget outcome and government (public) debt.
12. Analyse the likely effect of the automatic stabilisers on the budget outcome and government (public) debt.
13. Analyse the strengths and weaknesses of budgetary policy in achieving the domestic macroeconomic goals and living standards.
14. Gather, synthesise and use budget data to describe the budget forecasts for the domestic macroeconomic goals for the next two years.

Detailed example 3

You be the RBA

Print the RBA chart pack and cut out charts that represent different economic indicator/factors that the RBA must consider when making their Monetary Policy decision.

For example:

• Inflation
• Unemployment
• GDP growth
• GDP Growth – China (and India)
• Consumer Sentiment
• Australian Dollar Trade-weighted Index
• Household Income and Consumption
• Private Residential Building Approvals
• Business Investment
• NAB Business Survey
• Wage Price Index Growth
• Employment and Participation Rates
• Labour Under-utilisation Rates
• RBA Index of Commodity Prices
• Terms of Trade
• Export Volumes
• Australian Government Budget Balances
• Taxation Revenue Growth

Each student is given one indicator (there may be double-ups or students could work in groups).

1. In simple terms, what does your indicator measure? 
2. State the type of indicator (coincident, lagging or leading).
3. Explain why this indicator is likely to affect AD or AS (or both).
4. Describe the trend in the chart over the last two years.
5. Explain how the trend in the indicator above is likely to influence economic activity and the achievement of the government’s three macroeconomic goals. Is it a positive or a negative for the economy and the RBA decision?
6. Outline any other indicators that may be linked to yours?

On completion of these questions, discuss the findings as a class. Teacher then:

• collects and lists all indicators that students have researched (on the board or as a collaborate slideshow)
• separates them into positive (tailwinds) and negative (headwinds) for the economy and the RBA’s decision
• asks students to analyse them and vote on the RBA’s decision, ensuring that students can justify their vote. 

Students complete the last question individually:

7. Write a short MP statement using three positives (tailwinds) and three negatives (headwinds). You may like to use this structure:
• domestic economic developments
• international economics developments
• the decision.

Detailed example 4

Monetary policy: Formative assessment questions

1. Using the RBA chart pack, explain the trend in the cash rate over the last two years and describe the RBA’s stance.
2. Using a transmission mechanism of your choice, explain how the RBA’s stance is likely to affect aggregate demand.
3. Distinguish between conventional and unconventional monetary policy.
4. Using an example of your choice, explain how the RBA has used unconventional monetary policy over the past two years to influence the level of economic activity.
5. Using contemporary examples, discuss the effectiveness of the RBA’s monetary policy over the past two years. 
6. Explain why the RBA would be concerned with a rising AUD. In you answer, refer to positive and negatives of an appreciating AUD for Australian businesses.
7. Imagine the RBA wanted to slowdown economic activity:
1. Explain how it would do this using the CRT.
2. Explain how it might do this using one unconventional policy .
3. Using the asset transmission mechanism, explain the likely impact on asset prices in Australia.
4. Using the cash flow transmission mechanism, evaluate the likely impact on households.

Detailed example

Jigsaw group work task

Two one-hour lessons are required for this task.

This group work task uses a jigsaw approach to analyse how the operation of aggregate supply policies might improve the supply-side conditions of the economy through their impact on the quantity and quality of the factors of production, the costs of production and productivity, and the effect on Australia’s international competitiveness, productive capacity and aggregate supply.

Step 1

Set the class up into home groups of three students. Each student in each home group is allocated a number from one to three.

Step 2

The class then moves into three ‘expert’ groups, which are made up of all the students with a number 1 in one group; all the students with a number 2 in another group, and a final group of number 3 students.

Each expert group undertakes the following (allocate about 40 minutes for the expert groups to complete their summaries):

• Expert group 1 students prepare a summary that analyses how the operation of an example of an aggregate supply policy (i.e. a budgetary policy like tax reform) might improve the supply-side conditions of the economy through its impact on the quantity and quality of factors of production and the effect on Australia’s international competitiveness, productive capacity and aggregate supply.
• Expert group 2 students prepare a summary that analyses how the operation of an example of an aggregate supply policy (i.e. an increase in Australia’s skilled migration intake) might improve the supply-side conditions of the economy through its impact on the costs of production and the effect on Australia’s international competitiveness, productive capacity and aggregate supply.
• Expert group 3 students prepares a summary that analyses how the operation of an example of an aggregate supply policy (i.e. trade liberalisation) might improve the supply-side conditions of the economy through its impact on productivity and the effect on Australia’s international competitiveness, productive capacity and aggregate supply.

Step 3

Once the expert group members have finished their summaries, the individual experts move back to their home group. Each expert teaches and shares with the other members of the home group their findings from the research completed in their expert groups. (Allocate about 40 minutes for this step.)

Step 4

Each home group then prepares a report that discusses the operation of three aggregate supply policies (that is, an example of a budgetary policy, an increase in the skilled migration intake and an example of a policy that promotes trade liberalization) and analyses the effect of these policies on the domestic macroeconomic goals and living standards. (Allocate about 40 minutes for this step.)