Albany Senior High School/economics/level3/as3.2

= Achievement Standard 3.2- 90630 =

Please find a copy of the Achievement Standard 3.2

Topic 1 - Production Possibility Frontiers or Curves
The description of an economic problem will involve a selection from the: • illustration of economic scarcity, choice, opportunity cost, diminishing returns, and the under-utilisation of resources with a production possibility curve • shape of production possibility curves and their shifts • opportunity cost • role of markets and prices in determining resource allocation.

Topic 2 - Consumer and Producer Surplus
The description of allocative efficiency will involve a selection from: • market forces that will lead to market equilibrium • gains to buyers (consumers’ surplus) and sellers (producers’ surplus) from reaching equilibrium • how shifts in demand and supply affect equilibrium where the sum of consumers’ and producers’ surplus is maximised • change imposed on the market equilibrium, the loss of allocative efficiency (deadweight loss).

Topic 3 - Shifting the supply and demand curves
The description of how a market responds to change will involve a selection from: • Demand – construction of market demand curves by summing individual demand curves – movements along, and shifts of, the demand curve – reasons for shifts of demand curves. • Supply – construction of market supply curves from the supply curves of individual firms – reasons for shifts of supply curves – movements along a supply curve and shifts in the supply curve.

Topic 4 - Elasticity
• Elasticity – definitions of price elasticity of demand, cross elasticity of demand, income elasticity of demand and price elasticity of supply – calculation of price elasticity of demand, cross elasticity of demand, income elasticity of demand and price elasticity of supply – reasons for differing elasticities for different goods and services – significance for firms in their pricing decisions – supply responsiveness in the long term compared with the short term.

Topic 5 - Factor and commodity markets
• Factor and commodity markets – the concept of real wages, the effect of price level changes and controls in the labour market – the incidence of a sales tax and a subsidy (elastic demand versus an inelastic demand) – the market for an internationally traded commodity with exports and imports.

Glossary
Click here for a google doc with definitions.