Introduction to Economics Course Layout The Economic Problem Positive & Normative Statements

Expectations Turn up on time- no excuses! Appearance – wear jackets to class, shirts tucked in, ties done properly Bring the correct equipment – folders/notes, books Complete all homework and tasks on time – ask if help required! Put your equipment/planner on the desk at the beginning of the lesson No eating or chewing in class No mobile phones / MP3 players etc Respect Others!

Course Overview – AS Economics AS Unit 1: Competitive Markets — How They Work and Why They Fail Examination length: 1 hour 30 minutes Supported multiple-choice questions where students write a short justification of why they chose that answer and/or why the other answers are incorrect. Worth 32 marks. One data response question out of a choice of two questions worth 48 marks. Total for paper: 80 marks Unit 2: Managing the Economy Examination length: 1 hour 30 minutes One data response question out of a choice of two questions. Worth 50 marks. Last question of data response will be open ended. Worth 30 marks. Total for paper: 80 marks

Course Overview Exam board is Edexcel – ness/economics/8EC01/Pages/as.asp x ness/economics/8EC01/Pages/as.asp x ness/economics/8EC01/Pages/as.asp x Please print off the specification for units 1, 2 and (pages 13 to 34 of specification document), and put this at the front of your folders Homework Task.

Why Are Certain People So Highly Paid? Wayne Rooney earns £250,000 a week, (not including bonuses!) In groups, discuss these three questions: –What determines a person's salary? –Why do professional sports people earn so much money? –People who work as firefighters, police officers or teachers are more important to our society, yet they make much less money: what explains this?

So why do some people get paid so much? Think about it in terms of both SUPPLY and DEMAND Professional sports people make high salaries because people with their skills are scarce The demand for and supply of people in various occupations determines the salaries in question—not the “importance” of the job to society.

Scarcity The worlds resources are finite – i.e. there are limited amounts of land, water, oil, food etc on this planet Scarcity means that economic agents (individuals, firms, governments) can only obtain a limited amount of resources at any given time. Resources which are scarce are called Economic Goods

Scarcity Not all resources are scarce Resources which are not scarce are called Free Goods As the population increases some free goods have grown scarce, such as food or clean beaches.

Infinite Wants People have a limited number of needs but an infinite number of wants The Economic Problem – the allocation of scarce resources between competing uses Discussion: What are the minimum needs for a teenager living in the UK now? How might this differ from a teenager in sub-Saharan Africa?

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?

Positive and Normative Economics Positive Statements: –Statements which are capable of being verified or refuted via data or further investigation Normative Statements: –Value judgements which cannot be verified by data or further investigation

Exam Technique Any phrase which contains words such as “should”, “ought”, “better”, “fair” etc are obviously normative statements as these words are subjective Always define both positive and normative statements in an exam Always state which piece of data or which fact can be proved in a positive statement

Positive or Normative? Arsenal are better than Tottenham 75% of the price of a packet of cigarettes is tax The economy grew by 0.3% in the first quarter of 2013 The UK should leave the EU Increasing the top rate of tax to 50% would increase fairness

January 2011

June 2011