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

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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
– 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
– 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.


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Click here for a google doc with definitions.

Web Resources

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Web resource

Youtube - mjmfoodie [1]

Tutor2U - Notes on PPCs[2]