Lesson Plan

• Describe the three functions of price – rationing, signalling, and incentivising – in a market economy.
• Explain how changes in price allocate resources through these functions.
• Analyse the impact of demand or supply shifts on rationing, signalling and incentives.
• Apply the concepts to evaluate policy effects such as taxes or price controls.

• Projector and screen
• Whiteboard and markers
• Printed handout with demand‑supply diagram
• Worksheet containing real‑world scenarios
• Calculators (optional)

Begin with the question, “Why did concert tickets sell out so quickly and at such high prices?” Connect this to students’ prior knowledge of supply and demand, then state that today they will uncover how price performs three crucial functions that allocate resources. Success will be measured by their ability to describe, explain and apply these functions.

1. Do‑now (5’): Think‑pair‑share on a recent product shortage; list what happened to the price (checks understanding of rationing).
2. Mini‑lecture (10’): Introduce the three price functions with real‑world examples; display the demand‑supply diagram.
3. Guided analysis (12’): In groups, complete worksheet scenarios (oil price rise, smartphone price fall) identifying rationing, signalling and incentivising; teacher circulates with probing questions.
4. Interactive simulation (10’): Use an online price‑mechanism simulator to shift demand or supply; students observe changes in equilibrium and discuss the three functions.
5. Summative check (8’): Exit ticket – write one concise sentence for each function describing its role in resource allocation.

Recap how price simultaneously rations, signals and incentivises, linking back to the opening ticket example. Collect exit tickets to gauge understanding, then assign homework: research a recent policy (e.g., a sugary‑drink tax) and explain how it alters the three price functions.