Economics & Business · Year 11

Active learning ideas

The Law of Supply

The Law of Supply becomes much clearer when students experience the producer's perspective firsthand. Active learning strategies allow students to grapple with the relationship between price, profit, and production levels in a dynamic way, moving beyond rote memorization.

• ACARA Content Descriptions
• AC9EC11K03
• AC9EC11S03

• 30–45 min
• Pairs → Whole Class
• 3 activities

Activity 01

• Simulation Game
• 45 min · Small Groups

Supply Schedule Simulation: The Bake Sale

Students are given a hypothetical bake sale scenario with varying ingredient costs. They must determine how many cupcakes they would be willing to bake and sell at different price points, recording their decisions in a supply schedule. This activity directly links price to quantity supplied.

Explain the direct relationship between price and quantity supplied.

Facilitation Tip

During the Supply Schedule Simulation: The Bake Sale, prompt students to consider how rising ingredient costs might shift their willingness to supply at lower prices, even before the price offered changes.

• Apply
• Analyze
• Evaluate
• Create
• Social Awareness
• Decision-Making

Activity 02

• Simulation Game
• 30 min · Individual

Supply Curve Construction: Market Data Analysis

Provide students with a pre-made supply schedule for a specific product, like concert tickets. Students then plot this data on a graph to construct the supply curve, visually representing the Law of Supply. Discussion follows on why the curve slopes upward.

Construct a supply curve from a given supply schedule.

Facilitation Tip

During Supply Curve Construction: Market Data Analysis, circulate and ask students to explain the connection between a specific point on their constructed curve and the corresponding price and quantity from the data.

• Apply
• Analyze
• Evaluate
• Create
• Social Awareness
• Decision-Making

Activity 03

• Role Play
• 40 min · Whole Class

Producer Incentive Role Play

Assign students roles as producers of different goods. Present them with scenarios of changing market prices for their products. Students must decide whether to increase, decrease, or maintain their production levels and justify their decisions based on profit motives.

Analyze the incentives driving producer behavior in response to price changes.

Facilitation Tip

During Producer Incentive Role Play, encourage students to articulate their decisions based on potential profit margins as prices fluctuate, reinforcing the direct relationship in the Law of Supply.

• Apply
• Analyze
• Evaluate
• Social Awareness
• Self-Awareness

A few notes on teaching this unit

To effectively teach the Law of Supply, focus on the producer's decision-making process. Frame it around incentives and profitability, rather than just abstract concepts. Avoid simply presenting the supply curve; instead, guide students to construct it from data or through simulations, making the upward slope intuitive.

Students will demonstrate understanding of the Law of Supply by accurately predicting how changes in price will affect the quantity producers are willing to offer. They will be able to explain the profit motive as the driving force behind supply decisions and visually represent this relationship with an upward-sloping supply curve.

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Watch Out for These Misconceptions

• During The Bake Sale simulation, watch for students who set a fixed quantity to bake regardless of the price offered, suggesting they misunderstand the profit motive.

  Redirect by asking them to recalculate their potential profit at different price points offered in the simulation, highlighting how higher prices make baking more batches worthwhile.

• During Supply Curve Construction: Market Data Analysis, students might incorrectly label the axes or describe the curve as representing what consumers want.

  Guide students to identify the 'Quantity Supplied' on the horizontal axis and 'Price' on the vertical axis, and to verbally explain that the curve shows how much producers offer at each price, contrasting it with demand.

• During Producer Incentive Role Play, students might act as if they will produce the same amount regardless of market price, failing to respond to profit signals.

  Prompt students to state their profit calculations at different price levels presented in the role-play scenarios, encouraging them to adjust their production based on potential earnings.

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Methods used in this brief

• Simulation Game
• Role Play