1. Introduction to Markets
Intro to Economics - Markets
Introduction to Markets
1st Economic’s Lesson!!

2. Is Economics a dry subject?
The truth is that economics touches in some way upon just about everything important that happens in our world.
For example, the level of interest rates has a major impact on everything from company profits to housing affordability - so it is worth an investor's while to have an understanding of what's going on at a wider level.

3. A-Level Economics
What you'll find in our A-Level is "the big picture" - lessons on interest rates, politics, global markets, employment statistics, environmental issues, standards and living and lots more.
It is of course impossible to know the future - but you can at least get a better idea of which path the world is heading down.

4. Your first set of theory to learn
Economics Markets
Your first set of theory to learn

5. Introduction to Markets
Intro to Economics - Markets
Introduction to Markets
Market – any place or process that brings together buyers and sellers with a view to agreeing a price
The basis of how an economy operates – through production and subsequent exchange

6. Intro to Economics - Markets
TASK…
On whiteboards – write a list of 5 ‘market’ places that you can think of.
Now share your list with two other people.
What ‘markets’ do you agree on?
What ‘markets’ are you unsure of?
Be prepared to feedback ideas….

7. Different types of markets
Intro to Economics - Markets
Different types of markets
Organised markets – commodities e.g. rubber, oil, sugar, wheat, gold, copper, etc.
Financial markets – stocks, shares, currencies, financial instruments
Goods markets – the supply and demand of goods and services in general, food, clothing, leisure, houses, cars, etc.
Factor markets – the supply and demand of factors of production – land, labour and capital

8. Introduction to Markets
Intro to Economics - Markets
Introduction to Markets
A market does NOT have to be a physical place – like a shop!
The market place consists of all those who have items/services for sale and all those who are interested in buying those items/services
Many businesses have global markets because of the developments in technology – see or

9. Introduction to Markets
Intro to Economics - Markets
Introduction to Markets
Supply – the amount producers are willing to offer for sale at various prices
Supply – reflects the cost of the resources used in production and the returns/profits required
Demand – the amount consumers desire to purchase at various alternative prices
Demand – reflects the degree of value consumers place on items – price and satisfaction gained from purchase (utility)

10. Factors affecting the efficiency of markets
Intro to Economics - Markets
Factors affecting the efficiency of markets
The amount of information about the markets held by consumers and producers
The ease with which factors of production can put to alternative uses
The extent to which price is an accurate signal of the true utility and true cost in determining the level of demand and supply (externalities)

11. More factors affecting the efficiency of markets
Intro to Economics - Markets
More factors affecting the efficiency of markets
The degree to which firms hold monopoly power
The degree to which property rights are clearly defined
Whether the market can provide goods and services (public goods)

12. Is gold's the best bet?

13. FTSE 100 – is this a good place to invest?
Intro to Economics - Markets
FTSE 100 – is this a good place to invest?
Shows FTSE for 1 day, 1 week, 1 month & 1 year – interpret figures – all from BBC markets page

14. Stock Markets

15. What would you invest in?
Commodities – US data
What would you invest in?

16. Intro to Economics - Markets
FT Commodities – UK

17. Interpreting data – Sterling V Dollar
Intro to Economics - Markets
Interpreting data – Sterling V Dollar
Get students to ‘describe’ what they see – important to be able to see the importance of time scale !
How strong / weak is the £ to the $?

18. Intro to Economics - Markets
Cash Market - Gilts

19. Burgernomics! The Big Mac Index

20. FTSE 100 data 06/09/07

21. Intro to Economics - Markets
Your tasks…You will be given a ‘market sheet’ to interpret…need to think about:
What is being traded on the market you are looking at?
Who do you think the buyers and the sellers would be?
Why might they be buying and selling these items?
Some of these markets are 'futures' markets - what do you think this means?
What has happened to the price in the markets that you are looking at?
Why do you think the price might have changed?

22. Homework
Think of more obvious markets that you are aware of - shops, banks, leisure facilities, pubs, restaurants, night clubs and so on – SELECT ONE….
Write an explanation of the market –
Who are the buyers and the sellers in these markets?
How does each group make decisions about purchases?
What factors affect the efficiency of the market?
For example - if you go to a night club, what determines which one you will go to? If you were the owner of a night club, what factors would you have to think about in offering your service and how would you go about attracting customers?