What is Economics about?

Famous economics graduates

AS Economics In Outline

1 Microeconomics – Markets in Action

2 Macroeconomics – The International Economy

Recession 2008?

What caused it?

The success of ebaY

Auctions are transforming the way that markets workWhat lies behind the success of ebaY?

Studying Economics

Economics best described as a social science

It’s all about CHOICE

– You

– Me

– Family

– Football teams

– Businesses

– Government

– Countries

MICRO

V.

MACRO

What to produce?

How to produce?

For whom to produce?

This is known as the ?

CHOICECHOICE

The Economic Problem

SCARCE RESOURCES V UNLIMITED WANTS

Problem of scarcity

This is a simple way of looking at problems in the world, but economists use _______ to explain a whole range of issues.

Why is this so?

What is the Latin term we use when discussing models?

What did you do this week?What would be your perfect day?

“Just a perfect day”

Scarcity (why can't every day be like this for everyone?)

Trade-offs & opportunity cost (limited time, why x not y, what else could they be doing?)

Incentives & utility (why have they chosen these particular things? Rational decision taking)

Diminishing returns (why do they have a variety of activities in their day?)

Merit Goods (Why didn't they choose to spend it at school?)

Opportunity Cost

Unlimited wants versus limited (scarce) resources leads to CHOICE;

Explain with an example how opportunity cost is central to the choices we, our family or governments must make.

Opportunity Cost

Scarcity & Choice

Opportunity Cost:

“The cost of choice in terms of the next best alternative foregone”

Real cost v. Money cost

You’re a Government Minister Now

What would be your priorities. How would you decide

What to produce

How to produce

For Whom?

‘Postal Lottery’

There are national concerns regarding the treatment patients receive from the NHS, especially in relation to where they live. Local Health Authorities have a major say in how resources are allocated locally. Some life giving drugs are available in some parts of the country but not others.

Explain how this example illustrates scarcity, choice and opportunity cost.

Make your own model

Can you illustrate ‘The Economic Problem’ by Linking key economic terms together?

Include ‘opportunity cost’. What does this important economic term mean?

Some current topicsMicro and macroeconomics in action

Who benefits from globalisation?

Why have some countries become richer under globalisation and

others much poorer?

China – a seismic global shift

“Let China sleep, for when she wakes, she will shake the world.” Napoleon Bonaparte

Global shift

Largest economies in 2025

USA

China

Japan

Germany

India

UK

France

Russia

South Korea

Global shift

Largest economies in 2025 Largest economies in 2050

USA China

China USA

Japan India

Germany Japan

India Brazil

UK Mexico

France Russia

Russia Germany

South Korea UK

What is?

Economics

Economic Problem

Factors of Production

Goods and Services

Scarcity

Choice

Opportunity Cost

Production

Can a product be a service?

Sample some economics!