Y12 Economics
The Basic Economic Problem
06/09/12 – Mr Davis
Wednesday, 10 October 12
Starter
• Decide amongst yourselves how you are going to distribute the biscuits
Learning Outcomes:
I understand the basic economic problem; I can explain the four factors of production; I understand some of the implications of
limited economic resources
Wednesday, 10 October 12
Course Details
• AS split into 2 units
– ECON 1
• Exam in January
• 50% of the AS
– ECON 2
• Exam in June
• 50% of the AS
• Big focuses:
– Independent learning
– Current affairs
– Effort
Learning Outcomes:
I understand the basic economic problem; I can explain the four factors of production; I understand some of the implications of
limited economic resources
Wednesday, 10 October 12
Learning Outcomes
• I understand the basic economic problem
• I can explain the four factors of producRon
• I understand some of the implicaRons of limited economic resources
Learning Outcomes:
I understand the basic economic problem; I can explain the four factors of production; I understand some of the implications of
limited economic resources
Wednesday, 10 October 12
Economic AcRvity
• We have limited resources and unlimited wants
• Economics exists to decide:
– What to produce
– How to produce it
– Who to produce it for
• There are a huge number of influences on these quesRons
Learning Outcomes:
I understand the basic economic problem; I can explain the four factors of production; I understand some of the implications of
limited economic resources
Wednesday, 10 October 12
Which quesRon wins?
• For the key economic quesRons, decide what incenRves there are which might influence each quesRon
– What to produce
– How to produce it
– Who to produce it for
Learning Outcomes:
Wednesday, 10 October 12
Simplifying It
• For each of the products, try to simplify the producRon process
– e.g. Corn Flakes
• Raw materials -­‐> Finished product
Learning Outcomes:
I understand the basic economic problem; I can explain the four factors of production; I understand some of the implications of
limited economic resources
Wednesday, 10 October 12
Input/Output Model
Inputs
Production
Outputs
Learning Outcomes:
I understand the basic economic problem; I can explain the four factors of production; I understand some of the implications of
limited economic resources
Wednesday, 10 October 12
Factors of ProducRon
Land
Labour
Production
Outputs
Capital
Enterprise
Learning Outcomes:
I understand the basic economic problem; I can explain the four factors of production; I understand some of the implications of
limited economic resources
Wednesday, 10 October 12
Who decides?
• The key economic quesRons are decided by a mix of:
– Private firms (Private sector)
– Governments (Public sector)
– Not-­‐for-­‐profit organisaRons (Voluntary sector)
Learning Outcomes:
I understand the basic economic problem; I can explain the four factors of production; I understand some of the implications of
limited economic resources
Wednesday, 10 October 12
Types of economy
Mixed Economy
Decisions are made by
all 3 sectors
Free-market Economy
All decisions are made
by the private sector
Command Economy
All decisions are made
by the government
Learning Outcomes:
I understand the basic economic problem; I can explain the four factors of production; I understand some of the implications of
limited economic resources
Wednesday, 10 October 12
ApplicaRon
• Read the case study on inequaliRes of consumpRon and answer the quesRons that are with it
• Uniservity > InequaliRes case-­‐study
Learning Outcomes:
I understand the basic economic problem; I can explain the four factors of production; I understand some of the implications of
limited economic resources
Wednesday, 10 October 12