Economics An Introduction http://theincomparable.yolasite.com/economics.php

SO NOW that you have decided to do Economics at BGCSE, I must welcome you to a most enlightening experience. Please do not be terrified or scared of the subject, because as we go along, you will find that the subject is manageable and that as long as you read and take a disciplined approach to your work your grades will be pleasing. http://theincomparable.yolasite.com/economics.php

This subject requires that you do a course work This subject requires that you do a course work. For Economics, it is a single project that will be handed in for assessment, however you will need to be doing work on the project throughout the year. As we progress we will look at course work in more detail. This course work contributes 30% to your final grade. You will be required to sit one (1), paper 1 or two (2), paper 2, additional papers depending if you are doing the core or extended paper at the exams http://theincomparable.yolasite.com/economics.php

Paper 1 is consist of multiple choice, true or false, fill in the blanks and short answer questions, while paper 2 consists of short answer questions as well as essay type questions. http://theincomparable.yolasite.com/economics.php

Now first things first, you will need a couple of things to help make your journey more pleasing. You will need to get syllabus ­ this can be had from An Economics Dictionary will be a very good asset to have. You will need the starting Economics text written by G.F Stanlake, the Bahamian economy and offshore banking written by J. Kevin Higgins http://theincomparable.yolasite.com/economics.php

Needs A positive approach to your work is necessary. Your teacher is a facilitator and due to the bulk of work and the internal assessments you will need to develop a partnership that will produce success for both you. You will need three years of dedication as well. This dedication will help you to keep up with your readings and give pleasing results. http://theincomparable.yolasite.com/economics.php

Now, what is Economics? Economics looks at the study of how man allocates his scarce resources. Economics looks at how human beings co-ordinate their wants and desires, and to see how scarce resources can be allocated in order to satisfy these wants. http://theincomparable.yolasite.com/economics.php

Micro-Economics Micro-Economics looks at the study of economic behaviour of households, firm and individuals and how the prices of goods and services are determined. http://theincomparable.yolasite.com/economics.php

Let me ask you this, why is it that I cannot go to the movies, take a cruise, work, live in a Chalet in Paris, go to the moon and sleep all at the same time? http://theincomparable.yolasite.com/economics.php

Well, that is because that is humanly impossible Well, that is because that is humanly impossible. I do not have the time to do all that at once. The amount of time, money and other resources available to me are scarce. http://theincomparable.yolasite.com/economics.php

The fundamental principle of economics Scarcity is the fundamental principle of economics as the resources available to us are limited in supply. There is not enough food, housing, clothing, cellular phones, men or women (as the case may be). http://theincomparable.yolasite.com/economics.php

Due to the fact that resources are limited I will have to make a choice as to what I will do with the resources available to me. There is no way that we can have all that we want, and therefore we choose what we may think is most important to us. What makes this world so unique is that we are all different peoples and what may be priority to you is not necessarily a priority to me http://theincomparable.yolasite.com/economics.php

When we make a choice, we are actually giving up 'stuff' in order to get what it is that we have chosen. This act of giving up something in order to gain something else is called Opportunity Cost. http://theincomparable.yolasite.com/economics.php

This is defined as: The highest valued alternative that had to be sacrificed for the option that was chosen. All that had to be given up in order to get what I actually choose. When I choose to be a teacher, I was giving up the opportunity to stay home and sleep or watch television, going to the country daily, working for someone else, doing a tour of the world and many more options. http://theincomparable.yolasite.com/economics.php

Every day we make choices, that means that we are giving up something for what we have chosen. As you read this article, think of some of the things that you have given up in order to read. This concept of Opportunity Cost is important to individuals, firms and governments as well. We must assess our options and choose the one that best suits us. http://theincomparable.yolasite.com/economics.php

In order to represent the concepts of scarcity, choice and opportunity cost a Production Possibility Curve/Frontier is used. The curve measures the maximum combinations of output for products/goods that can be obtained utilising all available resources. http://theincomparable.yolasite.com/economics.php

Introduction to Economics The Economic Problem Opportunity Cost Production Possibility Frontiers This series of slides will introduce some key concepts to students – the economic problem, opportunity cost and production possibility frontiers. http://theincomparable.yolasite.com/economics.php

The Economic Problem Unlimited Wants Scarce Resources – Land, Labour, Capital Resource Use Choices Discussion can take place here about the key elements of the economic problem – the unlimited wants of humans against the scarce resources that exist to meet those wants. The notion of supply and demand can be introduced here and students can be involved by making a list of all the things they would like to buy if they had unlimited amounts of money! If then asked to trim that list down to meet a budget the more outrageous items disappear. This then introduces the notion of having to make choices – this issue can be discussed further using examples drawn from students own experiences about the choices they have had to make – possibly involving the choice of subjects they have had to make at college or school in relation to the time available, etc! How we use our scarce resources can also be linked into this discussion. The wind turbines highlight an issue raised in the In the News section (http://www.bized.ac.uk/cgi-bin/chron/chron.pl?id=1928) about the intention to build wind farms in areas of the UK and the controversies that it creates – useful to link theory and practice at an early stage. A wind farm. Copyright: Getty Images, available from Education Image Gallery http://theincomparable.yolasite.com/economics.php

The Economic Problem What goods and services should an economy produce? – should the emphasis be on agriculture, manufacturing or services, should it be on sport and leisure or housing? How should goods and services be produced? – labour intensive, land intensive, capital intensive? Efficiency? Who should get the goods and services produced? – even distribution? more for the rich? for those who work hard? This is the traditional three key questions any economic system has to answer. Many students would have difficulty defining what an ‘economy’ actually is! It is useful at this stage to clear this up – a system for the production and exchange of goods and services to satisfy the wants and needs of the population. This is open ended enough to be able to incorporate all manner of economic systems from a barter system that still exists in remote parts of the world to sophisticated economic systems such as the UK and US! The questions and the examples raised can be used for discussion – get the students to express their views at this stage and be as controversial as possible to stimulate discussion and involvement! http://theincomparable.yolasite.com/economics.php

Opportunity Cost Definition – the cost expressed in terms of the next best alternative sacrificed Helps us view the true cost of decision making Implies valuing different choices This is a key concept and one that often causes problems and misunderstanding but is central to students thinking like an economist. The crucial thing to knock out of students is their thinking that everything costs ‘money’. Because we have to make choices there are issues surrounding value judgements about what is important and what is not – it should not be difficult to stimulate discussion about what issues of government spending are important and what are not! http://theincomparable.yolasite.com/economics.php

Production Possibility Frontiers Show the different combinations of goods and services that can be produced with a given amount of resources No ‘ideal’ point on the curve Any point inside the curve – suggests resources are not being utilised efficiently Any point outside the curve – not attainable with the current level of resources Useful to demonstrate economic growth and opportunity cost This slide introduces the key features about PPFs. The activity that accompanies this presentation seeks to apply PPFs in a slightly different way – focussing on using health resources. Going through the theory at this stage and then following it up with the activity will be useful in developing early understanding of the issues. http://theincomparable.yolasite.com/economics.php

Production Possibility Frontiers If it devotes all resources to capital goods it could produce a maximum of Ym. If it devotes all its resources to consumer goods it could produce a maximum of Xm If the country is at point A on the PPF It can produce the combination of Yo capital goods and Xo consumer goods Assume a country can produce two types of goods with its resources – capital goods and consumer goods Capital Goods If it reallocates its resources (moving round the PPF from A to B) it can produce more consumer goods but only at the expense of fewer capital goods. The opportunity cost of producing an extra Xo – X1 consumer goods is Yo – Y1 capital goods. Ym A Yo These slides introduce the diagrams and then have animation to show how points on the PPF relate to different resource use and allocation. Moving from point A to point B involves sacrificing some capital goods to gain more consumer goods and thus demonstrates the opportunity cost involved. Students doing history can be reminded about the resource allocation decisions taken by Stalin during the 1930s and the subsequent decisions by successive Soviet premiers since the war about what resources are important for a nation like the USSR! (you might of course have to explain a little bit about what the USSR was!) B Y1 Xo X1 Xm Consumer Goods http://theincomparable.yolasite.com/economics.php

Production Possibility Frontiers It can only produce at points outside the PPF if it finds a way of expanding its resources or improves the productivity of those resources it already has. This will push the PPF further outwards. Production inside the PPF – e.g. point B means the country is not using all its resources Capital Goods C Y1 A .B Yo The next slide allows the lecturer to demonstrate what happens when resources are not used efficiently and production takes place within the PPF. It then allows the expansion of the PPF and can be used to illustrate the issue of economic growth and where opportunity cost does not exist if the economy moves from point A to point C (in a simple context of course – there is always some form of sacrifice of using resources!). Xo X1 Consumer Goods http://theincomparable.yolasite.com/economics.php

Positive and Normative Economics Health care can be improved with more tax funding Pollution control is effective through a system of fines Society ought to provide homes for all Any strategy aimed at reducing factory closures in deprived areas would be helpful Positive Statements: Capable of being verified or refuted by resorting to fact or further investigation Normative Statements: Contains a value judgement which cannot be verified by resort to investigation or research The final slide introduces positive and normative statements. Definitions are given on the right hand side and then successive statements appear on the left – each of these can be used as a basis of discussion as to whether they are positive or normative statements and why! http://theincomparable.yolasite.com/economics.php

Any point below the curve or to the left of the curve means that some resources are being left idle ­ resources are not being fully utilised. Therefore all points below the curve are all feasible or attainable, but the resources are not being used to the best of their ability. http://theincomparable.yolasite.com/economics.php

Any point beyond or to the right of the curve is unattainable given the resources available. Therefore points outside the curve cannot be obtained at this point as the resources available cannot produce these outcomes. http://theincomparable.yolasite.com/economics.php

The End http://theincomparable.yolasite.com/economics.php