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 –
http://www.edexcel.com/gce2008/busi
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