It is widely recognized the important role played by human capital, knowledge and innovation for the establishment of the basic conditions for permanent economic growth. On particular aspect of this general issue interests us in particular; the level of economic literacy among young students who arrive at the university to get a degree not only in economic sciences (Economics, Management, etc) but also in other sciences. In short, by Economic Literacy we mean the competence of each individual for making personal and social decisions about the multitude of economic issues that he/her will have to face over his lifetime. A firm knowledge of economics fosters, in young people, a highly useful way of thinking which can be applied for the rest of their lives. That is, studying economics can provide young adults with the knowledge and the skills they need to address economic questions and make decisions as consumers, workers, investors, entrepreneurs and, of course, as voting citizens. On the other hand, economic education is essential in all nations to prepare students for a changing, an interdependent and an increasingly more complex world. It is, thus, important to assess the level of economic knowledge (understanding), especially of the young people. This paper presents the results of a study of economic understanding among undergraduate students at the University of Évora, with special focus on first year students of economics. We use a Portuguese Version of the Test of Economic Literacy (PV.TEL) to get a normalized and standardized baseline data of economic understanding of high school students that reach university. Using the Analysis of Variance – ANOVA, we got a normalized sample, which led to the establishment of norms for different subgroups and factors (gender, age, secondary education, cognitive levels, core economic concepts, etc). The method we developed and the results we got were then used not only to re-organize the syllabus of Principles of Economics, a first year introductory course of Economics, but, most importantly, also to justify the use of active and cooperative learning based practices rather than the “lectures” and “chalk and talk” ones that dominates the teaching of Economics
