Year 12 AS Economics Ms Haron

Start of lesson drills Planner on the desk Pen/stationary available 21/11/2018 Start of lesson drills Planner on the desk Pen/stationary available Folder/Exercise book on the desk Date and title copied 1.1.4 – PPF – Continued Ready to learn Reminder of expectations every lesson Theme 1 – Microeconomics -1.1.4 PPF

Theme 1 1.1 – The nature of Economics 1.1.4 Production possibility frontiers a) The use of production possibility frontiers to depict: opportunity cost (through marginal analysis) economic growth or decline efficient or inefficient allocation of resources possible and unobtainable production b) The distinction between movements along and shifts in production possibility curves, considering the possible causes for such changes c) The distinction between capital and consumer goods

21/11/2018 Homework - reminder Your homework exam questions are due tomorrow: Wednesday 7th October – P3 – IT3 Theme 1 – Microeconomics -1.1.4 PPF

Last lesson we covered: 21/11/2018 Last lesson we covered: PPF and opportunity costs Outward shifts in the PPF Inward shifts in the PPF How economic growth affects the PPF Theme 1 – Microeconomics -1.1.4 PPF

Starter: Quick quiz – 5 mins 21/11/2018 Starter: Quick quiz – 5 mins What does PPF stand for? What does a point on the PPF line show? Why does a movement along a PPF (e.g. from A to B) involve an opportunity cost? Copy the sentence below and fill in the blanks with the following words: time, efficiently, resources, alternative A PPF shows ________ maximum combinations of two goods or services attainable when all resources are fully and _________ employed. The PPF shows output for a given _____ period and with the current _______ that you have. Theme 1 – Microeconomics -1.1.4 PPF

What could cause a shift from PPF1 to PPF 2? 21/11/2018 What could cause a shift from PPF1 to PPF 2? Economic growth, Changes in production technology or more factor inputs Theme 1 – Microeconomics -1.1.4 PPF

How is the PPF for an economy shown? The PPF for an economy is drawn on the assumption that all resources in the economy are fully and efficiently employed If there are unemployed workers or idle factories, or if production is inefficiently organised then an economy cannot produce on its PPF ?

Capital and consumer goods 21/11/2018 Capital and consumer goods Capital Goods Goods that are used in the production of other goods such as factories, offices, roads, machines and equipment. Businesses do not sell capital goods, which means capital goods do not directly create revenue like consumer goods. To financially survive the accumulation of capital goods, businesses rely on savings, investment or loans. Consumer Goods Goods that are used by people to satisfy their needs and wants. A consumer good is purchased for consumption and not later used for the production of another consumer good. When economists and statisticians calculate gross domestic product, or GDP, they do so based off of consumer goods. Example: The same physical good could be a consumer good or a capital good. An apple bought at a grocery store and immediately eaten is a consumer good. An identical apple bought by a company to make apple juice is a capital good. The difference lies in its utilization. Theme 1 – Microeconomics -1.1.4 PPF

List at least 3 causes of a shift of PPF If the economy is producing capital goods, then in the following period its capacity to produce should increase as it will have more resources available for production Increase in innovation Increase in employment Improved management processes

May 2012

MAY 2012

21/11/2018 Students need to understand that the PPF represents the production possibilities for a particular time period only, e.g. a year. The economy will have built up a stock of capital goods before, which can then be used, with other resources, to produce more capital goods and/or consumer goods. Some students might appreciate that a certain production of capital goods is needed to just balance the ones which get broken! Theme 1 – Microeconomics -1.1.4 PPF

Activity Read through the first 5 pages 21/11/2018 Activity Read through the first 5 pages Highlight/underline any key words Circle any words you don’t understand What are the 4 factors of production? Complete the activities on Page 5 and Page 7 Theme 1 – Microeconomics -1.1.4 PPF

This last week we have covered 21/11/2018 This last week we have covered 1.1.4 Production possibility frontiers The use of production possibility frontiers to depict: opportunity cost (through marginal analysis) economic growth or decline efficient or inefficient allocation of resources possible and unobtainable production The distinction between movements along and shifts in production possibility curves, considering the possible causes for such changes The distinction between capital and consumer goods Theme 1 – Microeconomics -1.1.4 PPF

21/11/2018 Homework - reminder Your homework exam questions are due tomorrow: Wednesday 7th October – P3 – IT3 Theme 1 – Microeconomics -1.1.4 PPF

Tomorrow we will cover: 21/11/2018 Tomorrow we will cover: 1.1.4 – PPF – Consumption vs investment Theme 1 – Microeconomics -1.1.4 PPF

21/11/2018 Expectations Theme 1 – Microeconomics -1.1.4 PPF