Economics · JC 1

Active learning ideas

Information Asymmetry

Active learning helps students grasp elasticity by making abstract concepts tangible through calculation, discussion, and real-world application. Moving beyond graphs and formulas, students test predictions about price changes and policy impacts, which builds both conceptual understanding and practical skills for Singapore’s market and policy contexts.

• MOE Syllabus Outcomes
• MOE Pre-University H3 Economics Syllabus, Theme 2: Firms, Markets and Market Failure - Asymmetric information: adverse selection and moral hazard
• MOE Pre-University H3 Economics Syllabus, Theme 2: Firms, Markets and Market Failure - Market and government responses to asymmetric information

• 15–40 min
• Pairs → Whole Class
• 3 activities

Activity 01

• Inquiry Circle
• 35 min · Small Groups

Inquiry Circle: The Revenue Game

Give groups different products (e.g., life-saving medicine, gourmet coffee). They must decide whether to raise or lower prices to maximize total revenue, justifying their choice based on the likely Price Elasticity of Demand (PED) and presenting their logic to the class.

How does adverse selection lead to a missing market?

Facilitation Tip

During Collaborative Investigation: The Revenue Game, circulate with a checklist to ensure each group tries at least three price points and records revenue changes clearly.

What to look for

Provide students with a scenario: 'The price of coffee beans increases significantly.' Ask them to draw a supply curve for coffee, showing the initial price and quantity. Then, ask them to illustrate and explain how this change in input cost affects the supply curve.

• Analyze
• Evaluate
• Create
• Self-Management
• Self-Awareness

Activity 02

• Stations Rotation
• 40 min · Small Groups

Stations Rotation: Elasticity in Policy

Stations feature different Singaporean policies: ERP, tobacco taxes, and subsidies for healthy meals. Students identify which elasticity concept (PED, YED, or XED) is most relevant to the policy's success and explain why.

What mechanisms can reduce moral hazard?

Facilitation Tip

For Station Rotation: Elasticity in Policy, assign pairs to a policy station and provide the same starter scenario at each station to allow for focused comparison.

What to look for

Present students with a list of factors (e.g., 'new technology discovered', 'government imposes a tax', 'consumer demand increases'). For each factor, ask students to state whether it causes a movement along the supply curve or a shift of the supply curve, and in which direction (increase or decrease in supply).

• Remember
• Understand
• Apply
• Analyze
• Self-Management
• Relationship Skills

Activity 03

• Think-Pair-Share
• 15 min · Pairs

Think-Pair-Share: Substitutes and Complements

Students list pairs of goods and predict the sign (positive or negative) of their Cross-Price Elasticity (XED). They swap with a partner to check if the logic holds for Singaporean consumers, such as Grab versus Gojek.

How does the Singapore government address information asymmetry in healthcare?

Facilitation Tip

When running Think-Pair-Share: Substitutes and Complements, give pairs exactly two minutes to discuss before sharing to maintain pacing and engagement.

What to look for

Pose the question: 'Why might the price elasticity of supply for fresh seafood be different from the price elasticity of supply for mass-produced plastic toys?' Facilitate a class discussion focusing on the factors that influence PES, such as the availability of raw materials, the time period considered, and the ease of increasing production.

• Understand
• Apply
• Analyze
• Self-Awareness
• Relationship Skills

A few notes on teaching this unit

Teachers often start with real-world examples to make elasticity meaningful, then guide students through step-by-step calculations before moving to policy applications. Avoid rushing to the formula—instead, let students derive it through scenarios. Research suggests using Singapore-specific contexts, like hawker food prices or ERP charges, to deepen relevance and retention.

By the end of these activities, students should be able to calculate and interpret elasticity values, explain how elasticity affects pricing decisions, and connect elasticity concepts to government policies like GST and ERP. They should also use graphs and scenarios to justify their reasoning about market behavior.

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Watch Out for These Misconceptions

• During Collaborative Investigation: The Revenue Game, watch for students who assume that steeper slopes on a demand curve always mean more elastic demand.

  Use the activity’s revenue calculations to redirect students: ask them to compare total revenue changes at different points on the same linear curve to see that elasticity varies even though slope does not.

• During Station Rotation: Elasticity in Policy, watch for students who treat elasticity as a fixed label for a product.

  Refer to the ERP station’s discussion prompts about long-term shifts to electric vehicles to highlight how time and substitutes change elasticity, and ask students to revise their initial classifications.

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Methods used in this brief

• Inquiry Circle
• Stations Rotation
• Think-Pair-Share