Introduction to Economics
Objectives:
[Link] the concepts of scarcity and choice within an
economy.
[Link] the consequences a choice has on an
individual.
[Link] “opportunity cost”.
[Link] opportunity cost using a production possibility
curve.
Retrieved and modified from: [Link]
Give Your Opinion
According to Emerson: “want is a
growing giant whom the coat of Have
was never large enough to cover.”
Why does “want” exceed “have”?
[Link]
econproblem
Retrieved from: [Link]
Introduction to Economics
Listen to the following video clip and answer the
following questions:
[Link]
v=Um0yvrvY0Y8&list=PL1YVYQeHoZI1yx8ZgBiN7fpnScQxMeZ
n6
Questions:
1. Define the term Economics.
2. Define the term Scarcity.
3. Why can’t everyone get what they want in the world?
4. Why must choices be made?
5. What are the 3 essential economic questions?
6. Why do we have to give up something when we make
choices?
7. Define the term Opportunity Cost.
8. State the 3 economic laws.
Definitions
Economics is defined as a social
science that analyses how to allocate
scarce or limited resources among
unlimited wants.
An economy is the utilization of
resources to produce goods and services
to meet the needs and wants of society.
An economic good is a commodity or
service that is useful to man but that
must be paid for.
The Economic Problem - Scarcity
Unlimited Wants
Scarce
Resources –
Land, Labour,
Capital
Forced to make
Choices
Pic. of extraction of oil. Retrieved from,
[Link]/mining/
The Economic Questions
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?
Opportunity Cost
What are you giving up when you
purchase an iphone?
Definition – what you forego in order
to obtain the next best alternative.
Helps us view the true cost of decision
making.
Implies valuing different choices.
Activity – What yuh want darlin’ -
Doubles or Pie?
Your allowance is $10.
One doubles cost $2.
One pie cost $2.
Let’s represent this diagrammatically.
Representing the Combination of
Choices
Draw this table in your notebooks and fill in the missing figures:
Table 1: Combination of Goods
Doubles Pies
A 0 5
B 1 4
C 2 3
D 3 2
E 4 1
F 5 0
Graphing Opportunity Cost
A
B
C
D
E
F
The Production Possibility Frontier
Look at the following video clip:
[Link]
v=O6XL__2CDPU
Questions:
1. What do points along the curve
represent?
2. What do points inside the curve
represent?
3. What do points outside the curve
represent?
Production Possibility Frontiers
Show the different combinations of
goods and services that can be
produced with a given amount of
resources;
Any point on the curve – points of
efficiency;
Any point inside the curve – suggests
resources are not being utilised efficiently or
unemployment of resources;
Any point outside the curve – not
attainable with the current level of
resources or scarcity.
Summary of Points on the PPF
Types of Opportunity Costs
Increasing Opportunity Costs
Constant Opportunity Costs
Decreasing Opportunity Costs
What type of curve illustrates
the label below?
Increasing
opportunity
cost
per unit of
good B
What type of curve illustrates
the label below?
Increasing
opportunity
cost
per unit of
good B
What type of curve illustrates
the label below?
Constant
opportunity
cost
per unit of
good B
What type of curve illustrates
the label below?
Constant
opportunity
cost
per unit of
good B
What type of curve illustrates
the label below?
Decreasing
opportunity
cost
per unit of
good B
What type of curve illustrates
the label below?
Impossible;
Decreasing not
supported
opportunity by
cost economic
theory
per unit of
good B
Definitions
Increasing Opportunity Cost:
You give up more and more of one
good as you gain more of the other.
Constant Opportunity Cost:
You give up the same amount of one
good as you gain more of the other.
Decreasing Opportunity Cost:
You give up less and less of one good
as you gain more of the other.
Quick Quiz
Go to [Link] for a quick
quiz. A code will be given to you.
Evaluation
Attempt Past Paper Questions:
June 2019 Q1a
June 2018 Q1d
How can we get outside the curve?
Why is the PPC
concave?
What does point (A),
inside the PPC
illustrate?
What is the
significance of point
(X), outside the PPC?
Under what conditions
can point X be
reached?
Shifting the PPF
Moving from point B
to point A, could
eventually expand
the frontier from
G,G to H,H
Shifting the PPF
Listen to the following video clip and
write down the factors that would
cause a shift outwards or a shift
inwards:
[Link]
v=FwPiWz1a1Tw
Factors that shift the PPF
Outwards
Increases in Technology
Increases in Productivity
Increases in Education
Increases in International Trade
Increases in Resources
Evaluation
Attempt Past Paper Questions:
June 2008Q8a-c
June 2012 Q1d
June 2013 Q8c
June 2014 Q1
June 2015Q8a,b,d
Follow up Lesson
Economic Decisions
