11–12Economics 11–12 Syllabus (2025)

Role of the price mechanism in a market economy, including the signalling, incentive and rationing functions of relative prices

Contribution of self-interest and institutions to the functioning of markets, including the rule of law and enforcement of property rights and contracts

Relationship between factor markets and product markets

Effective individual demand and market demand

Law of demand and the corresponding negatively sloping demand curve

Movements along the demand curve, specifically expansions and contractions of demand for a good or service due to a change in price

Movements (shifts) of the demand curve, including increases and decreases in demand for a good or service due to changes in non-price factors involving income, population, tastes, prices of substitutes and complements, and expected future prices

Construct and interpret demand schedules and graphs

Effective individual and market supply

Law of supply and corresponding positively sloping supply curve

Movements along the supply curve, specifically expansions and contractions of supply for a good or service due to a change in price

Movements (shifts) of the supply curve, including increases and decreases of supply for a good or service due to changes in non-price factors involving the cost of factors of production, expected future prices, number of suppliers, and technology

Construct and interpret supply schedules and graphs

Effects of changes in demand and supply on equilibrium market price and equilibrium quantity

Construct and interpret demand and supply graphs that demonstrate changes to market equilibrium

Contribution of market equilibrium and market outcomes to efficiency

Degrees of price elasticity of demand, including perfectly elastic, relatively elastic, unitary elastic, relatively inelastic and perfectly inelastic

Interpret demand graphs for price elasticity of demand

Factors affecting price elasticity of demand, including degree of necessity, closeness and number of available substitutes, proportion of income spent on an item, time horizon and addictiveness of the item

Significance of price elasticity of demand for businesses in terms of pricing, product differentiation and output

Degrees of price elasticity of supply, including perfectly elastic, relatively elastic, unitary elastic, relatively inelastic and perfectly inelastic

Interpret supply graphs for price elasticity of supply

Factors affecting price elasticity of supply, including time horizon, excess capacity, durability of goods and factor mobility

Significance of price elasticity of supply for businesses

Role of competition in markets and degrees of competition

Characteristics of perfect competition, monopolistic competition, oligopolies and monopolies, including number of businesses, types of goods and services, barriers to entry and pricing power

Economic implications of increases in the level of market concentration on the price, quantity and quality of goods and services, and the innovation and profit of businesses

Effects of technological innovation and the digital economy on market power, including first-mover advantage and network effects associated with digital platforms

Limitations of the price mechanism in achieving economic and social objectives

Challenges faced by Aboriginal and Torres Strait Islander businesses in accessing capital and markets

Features of positive externalities and negative externalities from consumption and production in relation to market failure, including marginal private costs and benefits, marginal social costs and benefits, property rights, common-pool resources, merit goods and demerit goods

Interpret demand and supply graphs that demonstrate negative externalities from production and positive externalities from consumption

Features of public goods in relation to market failure, including non-excludability, non-rivalry, and the free rider problem

Features of market power abuse in relation to market failure, including predatory pricing and collusion

Features of asymmetric information in relation to market failure, including lack of disclosure and adverse selection

Features of income and wealth inequality in relation to market failure, including social exclusion

Rationale for government intervention to address market failure

Forms and features of government policy interventions to correct market failure, including taxes, subsidies, direct provision of goods, regulations, price controls (binding ceiling and floor prices), quantity controls (quotas) and nudges

Interpret demand and supply graphs that demonstrate the effects of taxes and price controls

Limitations of government intervention into market failure

Government failure, including unintended consequences of policy interventions and rent-seeking behaviour