Quick summary: Students interrogate the circular flow of income model by considering the way that natural resources and pollution associated with the production and consumption of goods have traditionally been excluded from this model. Students are asked to consider smartphones as an example of the production and exchange of goods for consumption, and to then create a new circular flow of income model that shows the true cost of another product that we commonly consume. Students will work in pairs to create an infographic of their new model. Finally, students are asked to consider the roles and responsibilities of the main players of our market economy (consumers, workers, businesses and governments) in minimising the true cost of the products we consume.
This lesson supports students to inquire into the big idea of ‘real wealth’. Students develop an understanding of shared values, and build their sustainable and ethical financial knowledge, equipping them with the skills to make sound financial decisions based on social, environmental and economical merit.
- Students understand the basic workings of the economy and can identify a simplified circular flow of income.
- Students recognise that pollution and natural resources are not included in a simplified model of the circular flow of income, and that when they are included the model is no longer circular.
- Students begin to understand the ‘true cost’ (social and environmental) of the production and consumption of goods.
- Students consider the roles and responsibilities of the main players in our economy in minimising the true cost of consumption.
General capabilities: Critical and creative thinking.
Cross-curriculum priority: Sustainability OI.5.
Australian Curriculum content description:
Year 7 Economics and Business
- The ways consumers and producers respond to and influence each other in the market (ACHEK017)
Year 8 Economics and Business
- The rights and responsibilities of consumers and businesses in Australia (ACHEK029)
Syllabus Outcomes: C4.2, C4.3, C4.4.
Unit of lessons: Real Wealth Year 7 & 8
Time required: 60 mins.
Level of teacher scaffolding: Low – read information in the Teacher Worksheet to ensure a sound understanding of the economy.
Resources required: Student Worksheets – one copy per student OR computers/tablets to access the online worksheet. Device capable of presenting a website to the class. One printed copy of Households and Businesses Relationship worksheet per pair of students. Real Wealth Cheat Sheet, Glossary Secondary. Extension – Complex Circular Flow Of Income
Digital technology opportunities: Use of internet to view introductory videos and various diagrams. Digital drawing tools could be used for main players and definition matching activities. Digital sharing capabilities.
Homework and extension opportunities: This lesson includes opportunities for extension.
Keywords: economics, scarcity, resources, goods, services, production, households, government, income, circular flow of income.
Cool Australia’s curriculum team continually reviews and refines our resources to be in line with changes to the Australian Curriculum.