Introduction

Unit 1

Unit 2

Unit 3

Unit 4

Useful links

Comnet Economics Classroom

Header created by: Paul Wright

Web site designed by: Dianne Ruffles, Linda Wilson & Rosalind Kentwell

Unit 3: Economic activity and objectives

The focus of this unit is the study of economic activity in Australia and the factors that affect the achievement of the Australian Government's economic objectives.

Area of Study 1 : Economic activity in Australia
Economic activity refers to any activity by individuals, firms or governments that generates production, income, expenditure and employment. In order to understand the factors influencing economic activity in Australia it is essential to explore these fundamental economic concepts. Students will develop their understanding about how the market operates in the Australian economy, understand the difference between microeconomics and macroeconomics and explore how the level of economic activity is influenced by supply-side and demand-side factors.

Outcome 1
On completion of this unit the student should be able to explain the operation of the market mechanism and the extent to which it operates freely in Australia, and analyse the factors that affect the nature and level of economic activity.
To achieve this outcome the student will draw on knowledge and related skills outlined in area of study 1.

Key knowledge
This knowledge includes:

  • key economic concepts including relative scarcity, opportunity cost, the efficient allocation of resources, the maximisation of economic welfare and the public interest;
  • the nature and purpose of economic activity;
  • microeconomics
    - the market mechanism, including how the forces of supply and demand determine prices and quantities and how resources are allocated in competitive markets;
    - market failure and government intervention in the market place, including reasons for, and methods of, government intervention;

  • macroeconomics
    - the meaning of market (economic) activity and non-market (household) activity;
    - the characteristics of the business (economic) cycle;
    - the factors affecting aggregate demand and the role of aggregate demand in influencing the level of economic activity;
    - the factors affecting aggregate supply and the role of aggregate supply in influencing the level of economic activity.

    Key skills
    These skills include the ability to: define key economic concepts and use them appropriately;

  • apply the tools of economic analysis, including problem-solving;
  • apply economic concepts and theories;
  • construct graphs and tables to represent economic data;
  • analyse statistical and graphical data;
  • calculate percentage changes in economic variables;
  • use economic theory and evidence to evaluate alternative viewpoints and reach conclusions;
  • evaluate the strengths and weaknesses of economic arguments.