Core topic: Thinking like an economist

Students develop economic thinking by using economic inquiry skills, knowledge, and understanding of economic concepts, principles, and models in different contexts. Students apply economic thinking in the analysis of economic issues evident in a variety of scenarios.

Students apply economic thinking to analyse and respond to economic issues.

The knowledge, skills and understanding of economic thinking at Stage 1 are:

• economic concepts
• economic inquiry skills
• data analysis.

Economic concepts

Students develop an understanding of the fundamental economic problem: that human wants are unlimited but the resources available to satisfy these wants are scarce.

They explore and develop an understanding of the relationship between the economic concepts of scarcity, choice, opportunity cost, and the cause and effect of economic decisions.

Scarcity

Students develop an understanding of the limited nature of resources, and how scarcity leads to choices having to be made so that resources may be allocated efficiently.

Students develop an understanding that scarcity is a relative concept. That is, resources are only ‘scarce’ because humans want more than resources can provide.

Choice

Students develop an understanding that consumers, firms, and governments have to make choices. They develop an understanding of the factors that are considered when making those choices. Students analyse the intended and unintended consequences of those choices.

Opportunity cost

Students explore the concept of trade-offs, and develop an understanding that scarcity leads to choices having to be made. Opportunity cost is what is foregone when a choice is made. Opportunity cost can help consumers, producers, and governments make decisions.

Cause and effect

Students explore economic relationships and develop an understanding of the rationale for decisions, and the consequences of those decisions on individuals, firms, the economy, and society.

Economic inquiry skills

Students use an inquiring, critical, and thoughtful approach to their study of economics. They investigate scenarios and economic problems by:

• applying economic concepts, including scarcity, choice, opportunity cost, and cause and effect of economic decisions, in a variety of economic contexts
• applying principles, models, and terminology appropriately in a variety of economic contexts
• identifying specific economic objectives and asking relevant questions
• analysing the rationale for economic decisions and their intended and unintended consequences
• communicating reasoned arguments.

Data analysis

Students develop an understanding of a range of qualitative and quantitative economic data. They collect and analyse data in order to explain economic activity.

Students use appropriate graphs, diagrams, and tables to display results that support their arguments.