Albany Senior High School/economics/level3/as3.3

Achievement Standard 3.3 - 90631

Please find a copy of Achievement Standard 3.3

• Externalities
– define and give examples of positive and negative externalities

– understand the significance of property rights

– derive social marginal cost curves and social marginal benefit curves.

– explain how subsidies, taxes, regulations, property rights and public provision can be used to internalise positive and negative externalities.

• Merit/demerit goods
– distinguish between social and private preferences for certain goods

– give examples of merit and demerit goods.

– explain alternative means of increasing (decreasing) the consumption of merit (demerit) goods.

• Public goods
– distinguish between public goods and private goods

– identify examples of public goods

– explain why public goods are not normally provided by the market.

– discuss the collective provision of public goods.

• Natural monopolies
– identify examples of natural monopolies

– explain how economies of scale can lead to natural monopolies

– discuss reasons why natural monopolies may or may not operate for the good of society.

– demonstrate how natural monopolies can be influenced by the use of subsidies, regulations or public ownership.

• Income distribution
– distinguish between equity and equality

– explain why the free market solution is not always equitable.

– identify the means by which the state can attempt to achieve equity

– show how governments may intervene for equity at the cost of efficiency and discuss the equity/efficiency trade off.