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Level 8 economics


Indicators are examples of the behaviours and capabilities that a teacher might expect to observe in a student who is achieving at the appropriate level. Teachers may wish to add further examples of their own.

Context elaborations

Context elaborations are possible contexts for learning, with a suggestion of how they might be used with the focus achievement objective.

The listed context elaborations are examples only. Teachers can select and use entirely different contexts in response to local situation, community relevance, and students’ interests and needs.

Achievement objective 8.1

Students will gain knowledge, skills, and experience to:

  • understand that well-functioning markets are efficient but that governments may need to intervene where markets fail to deliver efficient or equitable outcomes.


Note: The key concept links in the bullet points below connect to a further unpacking of the indicator into a more comprehensive list of key concept indicators.

  • Uses concepts associated with the supply and demand model for goods and services, like consumer and producer surplus, to support analysis that shows perfectly competitive markets (for private goods and services) are allocatively efficient.
  • Uses marginal analysis of a monopolist’s pricing and output decisions to show why it is allocatively inefficient and to analyse the effectiveness of government policy attempts to improve efficiency.
  • By providing explanations, processing data and using models demonstrates an understanding of a variety of microeconomic concepts, including a selection of at least three from:
    • marginal utility and demand
    • diminishing returns and supply
    • elasticity of demand
    • elasticity of supply
    • market structures (excluding perfect competition and monopoly)
    • role of prices and profits in allocating resources.
  • Recognises that market outcomes are not always efficient and/or equitable and can use appropriate economic models to support explanations of government interventions for common causes of market failure, including a selection of at least two from:
    • consumption externalities
    • production externalities
    • public goods
    • imperfect information
    • inequitable distribution of income.

Context elaborations for achievement standard 8.1

Microeconomics concepts (that underpin achievement objective 8.1) could provide the focus of a whole year's study by themselves. Alternatively, a course involving a combination of micro and macroeconomics concepts could be created by selecting from the microeconomic contexts and combining these with the macroeconomics context (given in achievement objective 8.2). There is no defined course of study at level 8 (nor any compulsory topics for economics at this level) so the specific choices made will depend on the knowledge, capabilities, interests, and needs of the students undertaking this course.

Possible context — Thinking like an economist

(Understand the way economists think by investigating their supply and demand model.)

  • As an introduction to a study of microeconomics, students need to be introduced to the neoclassical supply and demand model. The assumption that underpins this model is that markets are perfectly competitive. Perfectly competitive markets simplify the real world but make analysis easier because all participants in the market take the price that results from the interaction of supply and demand in that market. Since some degree of competition exists in most real world markets, many of the lessons learned by studying supply and demand under perfect competition apply in more complicated markets as well. Assuming perfect competition is thus a useful simplification and a natural place to start a course of microeconomic analysis.
  • Gaining an understanding of the supply and demand will give students the tools to analyse the effects of various government policies (like tariffs in international trade markets and sales taxes and subsidies in domestic goods and service markets) and show them to be inefficient when used in competitive markets.
  • While developing an understanding of the supply and demand model, students could be introduced to other microeconomic concepts via classroom simulations, investigations, and projects. For example:
    • A simple classroom experiment would show that as more and more glasses of coke are consumed, the price a consumer is prepared to pay for the last unit consumed will drop. That is, how marginal utility can be used to derive a demand curve.
    • Ask students (one by one) to shift tennis balls from one location to another in a fixed portion of the classroom. As more and more students are added to the fixed space they get in the way of each other and productivity falls. That is, the law of diminishing returns.
    • An investigation of tuck-shop alternatives could be used to identify concepts around elasticity of demand, or students could be asked to present a review of newspaper articles to show how price signals and profits underpin resource use decisions in NZ.

Note: Students could be expected to only have in-depth knowledge of some of these microeconomic concepts and the final selection a teacher uses would depend on the knowledge, capabilities, interests and needs of the students who are studying them.

Possible context - Does economics help us to understand the real world?

(Use economic models and concepts to analyse real markets and government remedies for markets that fail to deliver efficient/equitable outcomes.)

To bring microeconomics to life, use real world examples that engage students. A level 8 course of economics study could include one or both the real world case studies below:

Case study one - Firms with "market power" cause markets to be inefficient

  • The focus of this context would be to use the analytical tools gained while studying the neoclassical perfectly competitive market to show why specific monopoly markets (for private goods and services) deliver inefficient and/or inequitable outcomes for the market participants, in particular, the consumers of monopoly goods and services. 

Note: Regional monopolies for example, a sole butcher shop in a rural town with a 50km radius market for local farmers (a geographic monopoly) or national monopolies, for example, Zespri's kiwifruit export monopoly, could be used as contexts for this study.

  • Once the allocative inefficiency of a specific monopoly market is established, students should analyse a range of government interventions to determine the most efficient/equitable remedy for that market situation.
  • While developing an understanding of the way monopoly markets are allocatively inefficient, students could be introduced to other microeconomic concepts. For example, they could carry out an investigation of market structures that dominate the New Zealand economy. Students could investigate monopolistically competitive (or oligopoly/duopoly) markets to determine why they are allocatively inefficient and the consequences of this for the marketing strategies used by firms in the market they investigate. 

Note: Data required to support students' explanations could be supplied by the teacher or students could collect and process the data.

Case study two - Examples of real world market failures

  • This context provides the real opportunity for students to make their own choices about the economic concepts they wish to study. Students could select from common cause of market failure (see below) the one they wish use as the focus of their study:
    • consumption externalities
    • production externalities
    • public goods
    • imperfect information
    • inequitable income distribution.
  • To help students to learn, the teacher could begin this topic by providing students with market failure exemplars that clearly identify key understandings that need to be gained. For example:
    • being able to explain, supported with evidence from an appropriately drawn economic model, why the market structure chosen fails to deliver efficient outcomes for its participants
    • being able to provide evidence to support a justification of a government intervention that would provide the most efficient and/or equitable remedy to correct the market failure.
  • When students know the expectations of their study, they could choose a mode of presentation that best suits them to present their analysis of a specific market failure.

Achievement objective 8.2

Students will gain knowledge, skills, and experience to:

  • understand how the nature and size of the New Zealand economy is influenced by interacting internal and external factors.


Note: The key concept links in the bullet points below connect to a further unpacking of the indicator into a more comprehensive list of key concept indicators.

  • Demonstrates an understanding of macroeconomic influences on the contemporary New Zealand economy by:
    • recognising macroeconomic issues facing the New Zealand economy by comparing current macroeconomic indicators with macroeconomic goals
    • explaining the effect(s) macroeconomic influences will have/have had on the New Zealand economy using economic models to illustrate predicted effects and / or by referring to (calculated) changes in macroeconomic indicators.

Context elaborations for achievement objectives 8.2

Macroeconomic concepts (that underpin achievement objective 8.2) will enable students to understand the workings of the economy as a whole.

Possible context – How well is the government running the economy?

(By comparing economic results against the economic goals of government we can see how well the NZ economy is performing. Economic models can then be used to help predict the impact of internal and external influences on NZ’s economy.)

  • To understand the New Zealand economy, students need to understand the terms used to describe it. Focusing on just four macroeconomic goals simplifies the understanding of the economy and provides a manageable starting position for students new to, or likely to have difficulty with, economics. It also provides a natural starting place for economic students progressing from level 7 who will have some understanding of macro issues like inflation, economic growth, unemployment, and trade imbalance.
  • Students can carry out web searches for the appropriate macroeconomic indicators and identify how well the current data matches the goals. Time series data records for each macro indicator could be created to identify trends in these statistics over time and so see if the economic situation is improving or worsening.
  • With a clear understanding of the current state of the economy, students could then be introduced to economic models that are used to predict the impact of different internal (for example, government policies) and external (for example, recessions in the economies of our major trading partners) influences on the economy. Students could be put into groups, with each group responsible for a different macroeconomic goal. These groups could be assigned the task of predicting the impact of contemporary macro influences on their macro goal and to make presentations to the class justifying their predictions. 

Assessment for qualifications

NCEA achievement standards have been aligned to The New Zealand Curriculum. Please ensure that you are using the correct version of the standards by going to the NZQA website.

Aligned level 1 achievement standards were registered for use in 2011, level 2 in 2012; and level 3 in 2013.

Achievement standards

The following achievement standards relate to level 8 achievement objectives.

Achievement objective 8.1 can be assessed using the following achievement standards:

  • 91399 Economics 3.1 Demonstrate understanding of the efficiency of market equilibrium. External, 4 credits.
  • 91400 Economics 3.2 Demonstrate understanding of the efficiency of different market structures using marginal analysis. External, 4 credits.
  • 91401 Economics 3.3 Demonstrate understanding of micro-economic concepts. Internal, 5 credits.
  • 91402 Economics 3.4 Demonstrate understanding of government interventions to correct market failures. Internal, 5 credits.

Achievement objective 8.2 can be assessed using the following achievement standard:

  • 91403 Economics 3.5 Demonstrate understanding of macro-economic influences on the New Zealand economy. External, 6 credits. 

Last updated April 8, 2021