Unit 1
Unit 2
Unit 1
In this unit you will be exposed to many of the introductory concepts which underpin the successful study of Economics. Your study will begin with an introduction to some of the key terms, and soon after you will learn about the market mechanism. Take the time to learn this model well - it is the most important piece of foundation knowledge in Economics, and a thorough understanding will help you to answer questions all the way through to the end of Year 12.As you progress, your teacher has the option of choosing from the many topics which are on offer. Don’t worry if you don’t cover all of the topics which are explained in this section of the site while you are in class. You could, of course, spend some time learning the material independently. Ultimately your teacher will guide you through the topics that they think are most important (and the most interesting!) for you.
At its simplest level, Economics is about choices. In The United States of America, Economics is taught in a very different way. Their structure revolves around six basic "steps":
Step 1: People choose - Every day we make choices
Step 2: All choices involve costs - when we choose to have one thing, we must sacrifice something else (for example, when you choose to study Economics, you can’t spend the same time studying Chemistry)
Step 3: People respond to incentives in predictable ways - although we can’t make predictions about individuals, we can make predictions about populations.
Step 4: Economic systems influence individual choices and incentives - the economic system that we choose for our country will help to determine the way in which we make our choices.
Step 5: Voluntary trade creates wealth - people will only exchange goods and services (and money!) if they believe that they will be better off after the trade
Step 6: The consequences of choices lie in the future - and sometimes, we are not good at predicting what all of the consequences will be....
Although we don’t use this structure in Australia, it is worth keeping these principles in mind as you progress through the course. You will find that everything that you study will fit into this system somehow. Finding where it fits will help you to understand how all of the things that you study relate to one another. Step 2: All choices involve costs - when we choose to have one thing, we must sacrifice something else (for example, when you choose to study Economics, you can’t spend the same time studying Chemistry)
Step 3: People respond to incentives in predictable ways - although we can’t make predictions about individuals, we can make predictions about populations.
Step 4: Economic systems influence individual choices and incentives - the economic system that we choose for our country will help to determine the way in which we make our choices.
Step 5: Voluntary trade creates wealth - people will only exchange goods and services (and money!) if they believe that they will be better off after the trade
Step 6: The consequences of choices lie in the future - and sometimes, we are not good at predicting what all of the consequences will be....