Transcript 4. Leaving Cert Economics
Pat Younger
• • • • • Good Counsel College, New Ross,Co.Wexford.
September 1980 (part of the ‘
greying population
’) All boys schools – approx.800 students Examiner since 1986: Chief Advising Examiner since 1995 (OL).
Chief Advising Examiner since 2000 (HL).
Education Officer, Economics Ctte. NCCA (no longer!) [email protected]
/ (087) 2840350
5 th Year Economics
• • • • •
Stimulate thinking and critical awareness Challenge student’s existing opinions and views Take time to show the breadth of economics Encourage students to watch the news / current affairs Consider / use the following articles:
The Economic Problem The ghostly poor who are all around – Nuala O’Faolain We have failed miserable to create a fair society – John Lonergan Capitalism – A Love Story (Michael Moore)
Course Outline – Possibility?
Year 1 Sept
Topic 1 Intro
Oct
Topic 2 Continued Topic 2 Budgeting. Taxation , Debt, Privatisation Topic 3 Money & Banking
2
Topic 5 Oligopoly Price Discrim.
Topic 6 FOP Market
Nov
Topic 4 Inflation Topic 5 National Income
Dec
Topic 5 National Income
Jan
Topic 1 Intro. To Micro: D & S Topic 2 Utility
Feb
Topic 3 Elasticity Topic 6 Trade and The EU Topic 7 Economic Growth & Development Topic 8 Population Employment and Emigration Overflow Topic 9 Economic Aims, Policies & Conflicts
Mar
Topic 4 Costs of Production
Apr
Topic 5 Intro. To Markets PC Monopoly
May
Topic 5 Imperfect Competition
Course Outline – Possibility?
Sept Oct Nov Topic 1 Introduction Topic 2 Government
Budgeting, Taxation Borrowing, National Debt Privatisation Nationalisation
Topic 3 National Income Dec Topic 4 Money & Banking Jan Topic 1 Demand, Supply & Markets Feb Topic 3 Elasticity Mar Topic 4 Costs Apr Topic 5 Markets Monopoly Privatisation Nationalisation May Topic 5 Markets Imperfect Competition Topic 2 Government
Budgeting, Taxation Borrowing, National Debt Privatisation Nationaliastion
Topic 2 Utility Topic 5 Markets Perfect Competition
Course Outline – Possibility?
• • • • •
Topic 1: Introduction to Economics
What is economics?
How an economic system works
(market economy)
Types of economic systems
(China & Communism)
Free Enterprise
(How a market economy works)
Disadvantages of Free Enterprise
(revision test)
• • • • •
Topic 2: Government in the Economy
Reasons for government involvement Budgeting
(worksheet: how to reduce a CBD)
Taxation
(Universal child benefit)
Privatisation & Nationalisation
(article)
The National Debt
(Test + solutions / revision worksheet
• • •
Topic 3: National Income
Measurement & Uses of National Income
(textbook template + templates for testing)
Keynesian Determination of National Income
(textbook template + multiplier questions)
Circular Flow of National Income • • • •
Topic 2: Utility
Example 1: How to allocate income Example 2 Substitution and Income Effect Definitely or possibly a Giffen Good •
Topic 3 : Elasticity
Revision questions •
Topic 4: Costs of Production
A template for teaching costs •
Topic 5: Markets
Diagrams (see 2009 HL Q2 (b)
(alcohol advertising)
• •
Topic X: Development of Economic Thought
A template for introducing it How to summarise the key ideas
Introduction to Course
• • • • •
What is
economics
? (allocation of scarce resources) How an
economy system
works
Introduce Circular Flow of Income
Functions
of an economic system:
What ? How? For Whom?
Types of Economic Systems
: Free Enterprise
Characteristics / Advantages / Disadvantages
Disadvantages
:
Give rise to reasons for Government Involvement in the economy
Introduction to Economics
Incomes for supplying F.O.P's
HOUSEHOLDS Incomes
Tax
FIRMS Output
Spending on the output of firms
GOVERNMENT
Government Expenditure Savings
FINANCIAL INSTITUTIONS
Investment Imports
FOREIGN MARKETS
Exports
Free Enterprise
(use 2007 HL exam)
Characteristics
:
Market mechanism
: resources are allocated through the market / price mechanism.
Ownership of factors or production
: nearly all factors of production are privately owned.
Limited government interference
: government exists to supply public goods; provide a legal framework within which markets can work and prevent the creation of monopolies.
Decentralised decision making
: the allocation of resources; the decisions on what to produce; how to produce and who gets the commodities: decided by individuals /entrepreneurs.
Motivated by Self-Interest
: consumers, producers and property owners are motivated by this.
[Consumers aim to maximise their utility / Producers aim to maximise profit / Owners of factors aim to maximise their return]
Free Enterprise
Economic Advantages Economic Disadvantages Reduced inequalities in society / More even distribution of wealth:
The government may place great emphasis on providing all citizens with a minimum standard of living e.g. subsidising essential food.
Shortages in goods and services
: Because the state may limit prices there may be excess demand and so shortages develop and the available goods may be allocated by a queuing system
Restricted choice / freedom for individuals
: Workers may be allocated particular jobs or in particular areas and
Provision of essential services
: Consumers will have little say in what is produced and what is The state may provide those services to citizens which it available may be quite restricted.
considers vital such as health care, education, public infrastructure.
Economies of scale
:
Inefficiency:
Because there is little incentive for enterprise and innovation, individuals and firms are not encouraged to take risks, work harder or innovate.
The large scale of production may mean that the firm benefits from economies of scale. The government may be more efficient in the provision of those commodities which require a large capital investment e.g. energy generation ; roads etc.
Low economic growth:
: As all individuals are not motivated by self-interest this may result in reduced economic activity resulting in poor economic growth rates.
Full employment
Historically centrally planned economies were able to achieve full employment while those economies consider free enterprise suffered from unemployment.
Bureaucracy / Corruption / High Taxes:
With so many decisions to be made it may mean that the system becomes over bureaucratic further reducing incentives to work / or be innovative. Taxes may have to rise to fund the administration involved. Corruption may develop within society.
Introduction contd
• Use the disadvantages of a free enterprise economic system as an introduction to the -
Government in the Economy
• Arising from the disadvantages of free enterprise:
What are the reasons why the government chooses to become involved in the economy?
Redistribution of wealth / provision of essential services / creation of jobs / best use of scarce resources etc.
************************** This approach to introducing the course can be used to introduce concepts such as:
Scarcity / opportunity cost / Creation of wealth – and its measurement Karl Marx / John Maynard Keynes / Adam Smith Markets: demand & supply / the factor market and product market
(in other words an outline of the course)
National Income
1.
2.
3.
3 sections Measurement & Uses of National Income
(Income / Output/ Expenditure)
Keynesian Determination of National Income
(Y=C+I+G+X-M)
Circular Flow of National Income
Measurement Think of the economy in sectors
(Agriculture, Industry & Services)
Consider a factor of production supplying itself to each sector Each FOP produces a good or provides a service
(Output)
Each FOP receives an income
(Income)
Each FOP spends its income on the goods & services it needs
(Expenditure)
National Income
Relationships Net Domestic Product at Factor Cost Irish & foreign factors +/- Net Factor Income from the rest of the world Net National Product at Factor Cost Irish factors only + Capital Depreciation_____________________ Gross National Product at Factor Cost at the cost to the fop’s + Indirect Taxes
-
Subsidies_______________________________ Gross National Product at Market Prices at the prices paid in mkt
National Income
Uses of National Income 1. Indication of alterations in our standard of living
Any change in our national income figures will indicate the level of economic growth, or otherwise, within the country from one year to the next, and give a general indication of changes to the standard of living, if any. Used by trade unions to justify wage demands.
2. Means of comparing the standard of living in different countries.
We can use the national income statistics to compare the standard of living in our country with that of other countries.
3. Assists the government in formulating economic policy.
Governments have a greater influence on the development and growth of the economy. To effectively plan for this governments’ need information about our economy such as that provided by the National Income statistics.
4. Evaluate economic policy
To assess changes to the economy and economic changes in the various sectors, and to provide a benchmark against which progress can be monitored, it is useful to have national statistics.
5. EU Budget Contributions / Benefits
The wealth revealed in our national income statistics will determine the contribution (if any) which Ireland must make to the EU budget.
The figure will also be used within the EU to determine those countries which require financial aid from the EU and the amount of that aid .
Limitations Population changes
If national income grows at a slower rate than population, then national income per head decreases and the average standard of living will fall. Hence population changes must be considered with changes in national income when assessing a country’s economic performance.
Inflation/deflation
An increase in prices will increase national income but standard of living may fall. So changes in national income must be compared with changes in prices to determine the impact on standard of living / economic performance.
Employment / Unemployment
If a person is unemployed rising national income will not necessarily mean that this person’s average standard of living is rising.
Levels of taxation
When considering a person’s standard of living one should take into account rates of income tax and levels of indirect tax within the country. An increase in either of these may result in a drop in a person’s standard of living.
Measures flow of wealth not welfare
Rising GNP may be accompanied by changing working or living conditions which may cause a loss of welfare e.g. traffic congestion and so a person’s standard of living may fall.
Teaching Economics - Advice
Do Don’t
• • • • • • Use relevant
Stimulus material
– from the newspaper / TV / radio Use
worksheets
to introduce
or
consolidate a topic Encourage
critical discussion / thinking
Use
Ordinary Level questions
to stimulate discussion Use the
textbook
appropriate.
where
Practice
answering questions / drawing diagrams.
• • • • • Rely on the
textbook
alone. Despair!
the
language involved is new and complex
at the beginning!
Expect that students will ‘get the hang’ of it immediately – be prepared for ‘the wall’.
It takes time to understand the concepts
Student Learning Personal Responsibility
• • • • • • • Need to
concentrate in class
– crucial to understanding.
Suitable Homework
: best to review class work Next Class: recap yesterday’s work Use worksheets – where appropriate Current TV / Radio / local news: is anything in the news?
Organisation
: of class notes / handouts / worksheets With Class tests: re-correct and show how marks can be gained through statement / explanation + giving examples
Websites
• • • • • • • •