economics y10 chp 11-13 chp 11-13 textbook. what is economics about? do you remember the first...

Economics y10Economics y10Chp 11-13 Chp 11-13

Chp 11-13 TextbookChp 11-13 Textbook

What is economics about? What is economics about?

Do you remember the first lessons? Do you remember the first lessons?

Economics is about l______ r_____ Economics is about l______ r_____ versus U___________ wants. versus U___________ wants.


Managing Scarce ResourcesManaging Scarce Resources

The ProblemThe Problem

Scarcity = Scarcity = Limited…Limited… versus unlimited wantsversus unlimited wants


Explain the image below..Explain the image below..

http://footprint.wwf.org.uk/http://footprint.wwf.org.uk/


Economic Problem..Economic Problem..


What to produce?What to produce? How to produce?How to produce? For whom to produce?For whom to produce?

This is known as the Economic Problem! This is known as the Economic Problem!

This leads toThis leads to CHOICECHOICE


Extension: Read top p.43 and write down a sentence for each.

Economic Problem Activity Economic Problem Activity

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

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


Draw and explain in Exercise BookDraw and explain in Exercise Book


You watched this video? You watched this video?

Gangnam Style overload

GUESS: GUESS: How many Youtube hits did this video get?How many Youtube hits did this video get?

What could’ve been done instead of What could’ve been done instead of everyone watching this video? everyone watching this video?


We could’ve built 5 of these…We could’ve built 5 of these…


Answer Answer

2 billion hits!2 billion hits!

= = At 4:12 minutes, that equates to more than 140m hours

16,000 years.


The Cost of Gangnam style The Cost of Gangnam style

What other achievements were forgone in the time spent watching a sideways shuffle and air lasso? It took 50m man-hours to complete the “supercarrier” USS Gerald Ford last year. Had people not been watching PSY—the South Korean pop star who released the song in July 2012—they could have constructed three such ships.


Opportunity CostOpportunity Cost

““The cost of choice in terms of losing The cost of choice in terms of losing the benefit of the next best the benefit of the next best

alternative. alternative.

I chose to watch Gangnam style along with 2 billion other I chose to watch Gangnam style along with 2 billion other people, in choosing this option the 2 billion people have people, in choosing this option the 2 billion people have

sacrificed an alternative activity for example, building sacrificed an alternative activity for example, building skyscrapers. skyscrapers.


Examples of opportunity costExamples of opportunity cost When people make a choice they must make a When people make a choice they must make a

sacrifice. i.e, they must chose one thing and not sacrifice. i.e, they must chose one thing and not another. another.

You must decide to spend money on food or goods. You must decide to spend money on food or goods.

Family must decide to go on holiday or buy new carFamily must decide to go on holiday or buy new car

Government must decide to build new roads or Government must decide to build new roads or schools instead? schools instead?


Opportunity costOpportunity cost

Weighing up your decisionsWeighing up your decisions

College Student's Opportunity Cost

Would you choose a date over revision? Would you choose a date over revision?

Which choice has lower opportunity cost? Which choice has lower opportunity cost?


I recently bought a pair of shoes which I recently bought a pair of shoes which cost me £40cost me £40

I Could’ve bought…I Could’ve bought…


The TRUE Cost of somethingThe TRUE Cost of something

I can’t have everything I want.I can’t have everything I want.

Have to make a CHOICE Have to make a CHOICE

In buying shoes I have sacrificed the next In buying shoes I have sacrificed the next best alternative (CDs) best alternative (CDs)


THE BENEFIT FROM THE NEXT BEST THE BENEFIT FROM THE NEXT BEST ALTERNATIVE IS LOST. ALTERNATIVE IS LOST.

The shoes didn’t cost £40, the real cost The shoes didn’t cost £40, the real cost was….was….

The opportunity cost….The opportunity cost….


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

E.g. I decided to have a pizza today, E.g. I decided to have a pizza today, thereforetherefore forgoing the option of a sandwich forgoing the option of a sandwich instead. instead. ThereforeTherefore, the opportunity cost of , the opportunity cost of the pizza was the sandwich I sacrificed the pizza was the sandwich I sacrificed instead. instead.


Which patients to treat? Which patients to treat?

You’re a You’re a hospital hospital manager manager and must and must make tough make tough decisions..decisions..



The cost of c_____ in terms of losing the The cost of c_____ in terms of losing the b______ of the next best a________.b______ of the next best a________.

Explain to your partner then your teacher Explain to your partner then your teacher how the Hospital Manager Task illustrates how the Hospital Manager Task illustrates this problem. this problem.


Can you define / explainCan you define / explain

EconomicsEconomics

Economic ProblemEconomic Problem

ScarcityScarcity

ChoiceChoice



PPCPPC

Define Define

Production Possibility Curve Production Possibility Curve

The The maximummaximum quantities of different quantities of different combinations of output of combinations of output of two productstwo products, , given given current resources current resources and technology. and technology.


Production PossibilityProduction Possibility

Choice in the National EconomyChoice in the National EconomyGuns

Butter


I can choose to produce ALL guns

or ALL butter.

Or ideally, somewhere in

between.

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0 1 2 3 4 5 6 7 8Units of Meat Pies (millions)

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A production possibility curveA production possibility curve

Units of BC Units of MPUnits of BC Units of MP

aa 8m 0.08m 0.0 7m 2.2m7m 2.2m 6m 4.0m6m 4.0m 5m 5.0m5m 5.0m 4m 5.6m4m 5.6m 3m 6.0m3m 6.0m 2m 6.4m2m 6.4m 1m 6.7m1m 6.7m 0 7.0m0 7.0m

aa

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8m 0.08m 0.0 b 7m 2.2mb 7m 2.2m 6m 4.0m6m 4.0m 5m 5.0m5m 5.0m 4m 5.6m4m 5.6m 3m 6.0m3m 6.0m 2m 6.4m2m 6.4m 1m 6.7m1m 6.7m 0 7.0m0 7.0m

bb

A production possibility curveA production possibility curveU

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Units of Meat Pies (millions)

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8m 0.08m 0.0 7m 2.2m7m 2.2m c 6m 4.0mc 6m 4.0m 5m 5.0m5m 5.0m 4m 5.6m4m 5.6m 3m 6.0m3m 6.0m 2m 6.4m2m 6.4m 1m 6.7m1m 6.7m 0 7.0m0 7.0m

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8m 0.08m 0.0 7m 2.2m7m 2.2m 6m 4.0m6m 4.0m d 5m 5.0md 5m 5.0m 4m 5.6m4m 5.6m 3m 6.0m3m 6.0m 2m 6.4m2m 6.4m 1m 6.7m1m 6.7m 0 7.0m0 7.0m

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8m 0.08m 0.0 7m 2.2m7m 2.2m 6m 4.0m6m 4.0m 5m 5.0m5m 5.0m 4m 5.6m4m 5.6m 3m 6.0m3m 6.0m 2m 6.4m2m 6.4m 1m 6.7m1m 6.7m 0 7.0m0 7.0m


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6.6. Production Possibility Boundary or Frontier Production Possibility Boundary or Frontier or or CurveCurve

The production possibility curveThe production possibility curve what the curve showswhat the curve shows

• Unobtainable production – production outside the Unobtainable production – production outside the curvecurve

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xww



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• Increasing opportunity costsIncreasing opportunity costs

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• Increasing opportunity costsIncreasing opportunity costs

• Unemployed resources – production inside the Unemployed resources – production inside the curvecurve

v


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Shifting out the PPFShifting out the PPF

NowNow

O

Growth in potential outputGrowth in potential output


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NowNow

5 years’ time5 years’ time

O

Growth in potential outputGrowth in potential output


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Shifting out the PPFShifting out the PPF

Outward shift of PPCOutward shift of PPC

Two Reasons;Two Reasons;

Economic GrowthEconomic Growth Change in productive potential of an economyChange in productive potential of an economy

Technological ChangeTechnological Change Improvements in technologyImprovements in technology


What’s the difference? What’s the difference?

Engine v Food.. Engine v Food..


Capital v Consumer goodsCapital v Consumer goods


Capital v Consumer GoodsCapital v Consumer Goods

Capital goods tend to be machines and other Capital goods tend to be machines and other man made equipment. They can be used over man made equipment. They can be used over and ____ again (e.g. car trips) and some can and ____ again (e.g. car trips) and some can even make consumer g_______ (e.g. cooker)even make consumer g_______ (e.g. cooker)

Consumer goods on other hand are are Consumer goods on other hand are are n________ made or can only be used n________ made or can only be used ______. They are consumed and must be re-______. They are consumed and must be re-p________. p________.


Which is which Which is which


Car – Capital Carrots – Consumer FishFishing NetWater bottleWater pumpStaplerStaples Ladder Wheat Chicken shwarma BBQ

Draw and Explain Movements and Draw and Explain Movements and ShiftsShifts

Capital Goods

Consumption Goods

Shift

Movement

●

●●

A

B

C

●

●

D

E


PPC Activity PPC Activity

Read p.44-45Read p.44-45

Complete Activity on p.45 Complete Activity on p.45


Can you define ?Can you define ? The Economic Problem ?The Economic Problem ?

Choice Choice

NeedsNeeds


Scarcity Scarcity

Production Possibility Curves Production Possibility Curves


economics y10 chp 11-13 chp 11-13 textbook. what is economics about? do you remember the first...

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