ECONOMICS LEVEL 3
Unit 1: An Introduction to Economics
Market failure and government policies
Economic knowledge
Main types of market failure:
- income inequality: relative and absolute positive and negative externalities.
Economic decision-making
- Analysis of market failure in terms of economic and social problems caused by income inequality. Inequity of free market for those on low or no income.
Economic policies and action
- The link between market failure and the role of government
- Government policy options to correct market failure – the use of taxes and subsidies, assigning property rights, regulating the use of common property, providing public goods and services.
Unit 2: Economic Management
Macroeconomic activity
Economic knowledge
Roles of government in a modified market economy:
- stabilising the business cycle redistributing income through taxation and spending and the provision of goods and services.
Unit 4: Investigation into a Contemporary Economic Issue
Economic Issue 2: Income and Wealth Distribution in Australia
Focus
- Market outcomes can produce inequity. Economic policy can play a role in altering income and wealth distribution.
Key ideas
- Taxation