Active learning ideas
Elasticity is a cornerstone of the Leaving Certificate Economics specification, moving beyond simple supply and demand to quantify how consumers and producers react to changes in the market. Students explore Price, Income, and Cross-Price Elasticity of Demand, alongside Price Elasticity of Supply. Understanding these coefficients is vital for predicting how price changes affect total revenue for Irish firms and how tax changes impact government receipts.
Activity 01
Small groups are given different products (e.g., insulin, luxury cars, bread) and must calculate the impact of a 10% price increase on total revenue. They present their findings to the class to demonstrate why inelastic goods are targets for government taxation.
How do consumers respond to price changes?
Activity 02
Students list pairs of goods (e.g., iPhone and Android, Coffee and Tea) and predict whether their XED is positive or negative. They then swap with a partner to justify their reasoning using the concepts of substitutes and complements.
Why is elasticity crucial for government taxation policies?
Activity 03
The class acts as advisors to the Department of Finance, deciding which goods to tax in the upcoming budget based on elasticity data provided. They must defend their choices based on the stability of tax revenue and the impact on consumer behavior.
How do firms use cross elasticity to set prices?
A few notes on teaching this unit
Watch Out for These Misconceptions
Elasticity is the same as the slope of the demand curve.
While related, elasticity measures percentage changes rather than absolute changes. Peer discussion using different scales on graphs helps students see that a linear demand curve has varying elasticity at different price points.
A negative Income Elasticity (YED) means the product is bad.
It simply means the good is 'inferior' in economic terms, like generic brands. Using a gallery walk of different products helps students categorize goods based on consumer behavior during economic booms versus recessions.
Methods used in this brief
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