Syllabus: SQA - Higher Course Spec Economics
Module: Economics of the Market
Lesson: Determinants of supply
Jump to Section:
Introduction
In the SQA Higher Economics course, the “Determinants of Supply” topic sits within the Economics of the Market area of study. It’s essential for understanding how producers respond to incentives and constraints, and how supply-side factors influence market outcomes.
This part of the curriculum directly supports skills such as analysing real-world data, evaluating economic issues, and drawing reasoned conclusions—all core competencies in the SQA framework. By anchoring theoretical knowledge in current contexts, this topic prepares students for both assessments and the economic decisions they’ll face in adult life.
Key Concepts
The syllabus outlines specific learning outcomes related to the determinants of supply:
Understand the shape of the supply curve and how it represents the relationship between price and quantity supplied.
Identify and explain movements along the supply curve (caused by price changes).
Understand non-price factors that shift the supply curve, including:
Changes in technology (e.g. automation reducing production time).
Weather conditions, particularly for agricultural or seasonal industries.
Changes in the costs of factors of production (labour, materials, energy).
Explain how these factors influence the quantity supplied in real-life contexts.
Real-World Relevance
The impact of supply-side changes is easy to spot in news headlines. For example:
Technology: The rollout of AI-driven logistics has streamlined supply chains in retail, shifting supply curves outward as firms can produce and deliver more at lower cost.
Weather: Droughts in southern Europe affected olive oil production, reducing supply and pushing prices up globally.
Factor Costs: Post-pandemic labour shortages and energy price volatility have driven up costs, making it more expensive for firms to maintain previous output levels.
These examples are perfect for classroom discussion and help bridge theory with the real economy students see around them.
How It’s Assessed
Assessment focuses on both recall and application:
Short-answer questions may ask students to list or explain key determinants.
Data response questions often include supply curves and real-world scenarios.
Extended response tasks challenge learners to apply supply theory to unfamiliar contexts and evaluate the outcomes.
Command words to focus on include:
Describe (e.g. the shape of a supply curve)
Explain (e.g. how technology affects supply)
Analyse (e.g. how multiple factors interact to influence market supply)
Students are expected to clearly communicate economic reasoning and link their answers to real-life data or case examples.
Enterprise Skills Integration
This topic naturally builds:
Problem-solving: Assessing how businesses might respond to rising production costs.
Decision-making: Evaluating supply strategies under changing market conditions.
Critical thinking: Exploring the trade-offs of investing in new technology versus increasing labour hours.
Using practical tools like supply-and-demand simulations or case-based group tasks allows students to apply these skills in realistic scenarios, deepening their understanding through active learning.
Careers Links
Understanding supply determinants is directly linked to several career paths:
Business management: Managing cost structures and forecasting supply.
Logistics and operations: Optimising resource inputs and scheduling.
Agriculture and environmental science: Navigating the challenges of weather-dependent production.
This topic connects neatly with Gatsby Benchmarks 4 and 5—supporting curriculum learning and employer encounters by linking abstract content with roles in the supply chain, production planning, and economic strategy.
Teaching Notes
Tips for delivery:
Use topical news stories to introduce each determinant—students will grasp abstract concepts faster when they see them in action.
Plot real data on supply curves to show shifts and movements.
Encourage peer teaching activities where students explain determinants to each other using specific examples.
Common pitfalls:
Confusing a movement along the curve with a shift of the curve—practice multiple examples to build confidence.
Overlooking multi-factor scenarios—help students layer their reasoning when more than one determinant changes at once.
Extension ideas:
Challenge students to research a current market (e.g. electric vehicles) and report back on what’s driving supply trends.
Introduce elasticity of supply for higher-attaining students, linking responsiveness to real business decisions.
