Syllabus: SQA - Higher Course Spec Economics
Module: Economics of the Market
Lesson: Markets

Introduction

The Economics of the Market: Markets unit in the SQA Higher Economics Course provides learners with a foundational understanding of how markets operate and how resources are allocated. It sits within the wider “Economics of the Market” area, aligning closely with key microeconomic themes such as supply and demand, price determination, and market failure.

This module is directly mapped to the Scottish Higher framework, providing teachers with a clearly defined structure that supports skills development in decision-making, analysis, and real-world application. For SLT and Headteachers, it supports measurable outcomes in economic literacy, critical thinking, and progression into further education or employment.

Key Concepts

Students should be able to:

• Explain how market forces determine prices, including the interaction between supply and demand.

• Draw and interpret demand and supply curves, showing shifts and movements.

• Understand price elasticity of demand and supply, and apply these concepts using real-world data.

• Identify and explain causes of market failure, such as externalities, under-provision of public goods, and information failure.

• Evaluate the role of government intervention to correct market failure, using tools such as subsidies, taxation, and regulation.

• Apply economic models, such as the price mechanism, to analyse resource allocation and consumer/producer decisions.

These are syllabus-aligned expectations that provide a solid platform for more advanced economic thinking in further study or professional contexts.

Real-World Relevance

The recent energy price shocks in the UK (2022–2024) offer an ideal case study. Students can analyse:

• Price rises due to supply shocks and inelastic demand.

• Government intervention, including energy price caps and subsidies.

• Consumer behaviour, such as shifts to alternative fuels or energy-saving products.

Other live examples include housing markets, changes in food prices due to climate events, and labour market shortages in sectors like logistics or hospitality. These examples help students see that economics is not abstract — it shapes the cost of living, job markets, and government policy decisions they hear about daily.

How It’s Assessed

The SQA Higher Economics assessment for this section typically includes:

• Data interpretation: Graphs, tables, or case studies students must analyse using economic theory.

• Short and extended responses: Explaining supply and demand shifts, calculating elasticity, or evaluating government policies.

• Command words to focus on include:

  • Explain (e.g. explain how a change in income affects demand)

  • Analyse (e.g. analyse how a tax affects market equilibrium)

  • Evaluate (e.g. evaluate the effectiveness of government intervention)

  • Draw (accurate, labelled demand/supply diagrams)

  • Calculate (e.g. elasticity coefficients using given formulas)

For teachers, this means embedding command-word literacy into lessons is just as important as the content itself.

Enterprise Skills Integration

This module naturally supports enterprise skill development through:

• Decision-making: Students must weigh up trade-offs — for example, how a business might price a product based on elasticity or cost structures.

• Problem-solving: Analysing market failures and proposing interventions builds evaluative thinking.

• Data interpretation: Economic models and statistics demand numeracy and interpretation skills, mirroring business intelligence roles.

• Commercial awareness: By linking market theory to business decisions (e.g. pricing, production), learners gain a working understanding of how firms operate.

Enterprise Skills’ Business Simulations offer plug-and-play tools that bring this to life. Students run virtual businesses, experiencing market forces, competition, and consumer reactions in real time — no extra workload, no setup required.

Careers Links

This topic contributes directly to:

• Gatsby Benchmark 4: Embedding careers in the curriculum through case studies and simulation activities.

• Gatsby Benchmark 5 & 6: Via Enterprise Skills simulations, learners engage in real business decision-making and simulated workplace environments.

Relevant career pathways include:

• Economist or Policy Analyst – understanding how markets fail and how governments respond is core to public sector work.

• Business Manager or Consultant – skills in analysing supply, demand, and pricing help firms stay competitive.

• Marketing Analyst – knowledge of consumer behaviour and elasticity supports effective targeting and pricing.

By connecting market theory with these roles, students start to see economics as a toolkit for navigating the real world.

Teaching Notes

Time-saving delivery tips:

• Use plug-and-play resources from Skills Hub to model demand/supply and elasticity visually.

• Integrate recent news stories or headlines into starters or plenaries for relevance.

• Set low-prep group tasks like “build a market failure case study” using prompts.

Common misconceptions:

• Students often confuse shifts of a curve with movements along the curve — use multiple diagrams to reinforce.

• Elasticity formulas can be mishandled; practice with scaffolded examples helps.

• The difference between positive and normative statements may be overlooked when debating policy responses.

Extension ideas:

• Use Enterprise Skills Business Simulations for a whole-lesson immersion into market dynamics.

• Task students with researching and presenting a current case of market failure or government intervention.

• Explore cross-market effects (e.g. petrol price rises and public transport demand) for higher-level analysis.

Differentiation:

• For less confident learners, start with contextualised multiple-choice tasks.

• Stretch higher-attaining students with ‘evaluate’ style questions or policy critiques.