Download 4. Leaving Cert Economics

Pat Younger
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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
5th Year Economics
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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:
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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 Sept
1
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Topic 1
Intro
Topic 2
Continued
Topic 4
Inflation
Topic 5
Topic 1
Topic 3
Topic 4
Topic 5
Topic 5
Topic 5
Intro. To
Micro:
D&S
Costs of
Production
Intro. To
Markets
Imperfect
Topic 3
National
Income
Elasticity
Topic 2
Budgeting.
Taxation ,
Debt,
Money &
Banking
National
Income
Privatisation
2
Utility
Topic 5
Topic 6
Topic 6
Topic 7
Topic 8
Oligopoly
FOP
Market
Trade and
The EU
Economic
Growth
&
Population
Employment
and
Emigration
Price
Discrim.
PC
Monopoly
Topic 2
Development
Topic 9
Economic
Aims,
Policies &
Conflicts
Overflow
Competition
Course Outline – Possibility?
Sept
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Topic 1
Topic 2
Topic 3
Topic 4
Topic 1
Topic 3
Topic 4
Topic 5
Topic 5
Introduction
Government
Budgeting,
Taxation
Borrowing,
National
Debt
Privatisation
National
Income
Money &
Banking
Demand,
Supply &
Markets
Elasticity
Costs
Markets
Markets
Monopoly
Imperfect
Competition
Privatisation
Nationalisation
Nationalisation
Topic 2
Government
Budgeting,
Taxation
Borrowing,
National
Debt
Privatisation
Nationaliastion
Topic 2
Topic 5
Utility
Markets
Perfect
Competition
Course Outline – Possibility?
Topic 1: Introduction to Economics
Topic 2: Utility
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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
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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
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Measurement & Uses of National Income
(textbook template + templates for testing)
Keynesian Determination of National Income
(textbook template + multiplier questions)
Circular Flow of National Income
Example 1: How to allocate income
Example 2
Substitution and Income Effect
Definitely or possibly a Giffen Good
Topic 3 : Elasticity
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Revision questions
Topic 4: Costs of Production
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A template for teaching costs
Topic 5: Markets
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Diagrams (see 2009 HL Q2 (b)
(alcohol advertising)
Topic X: Development of Economic Thought
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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
FIRMS
HOUSEHOLDS
Incomes
Output
Spending on the output of firms
Tax
GOVERNMENT
Government
Expenditure
Savings
Investment
FINANCIAL INSTITUTIONS
Imports
Exports
FOREIGN MARKETS
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
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.
Provision of essential services:
The state may provide those services to citizens which it
considers vital such as health care, education, public
infrastructure.
Economies of scale:
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.
Full employment
Historically centrally planned economies were able to achieve
full employment while those economies consider free
enterprise suffered from unemployment.
Economic Disadvantages
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
maybe restricted in their ability to change jobs by state requirements.
Consumers will have little say in what is produced and what is
available may be quite restricted.
Inefficiency:
Because there is little incentive for enterprise and innovation,
individuals and firms are not encouraged to take risks, work harder
or innovate.
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.
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
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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.
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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
3 sections
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Measurement & Uses of National Income (Income / Output/ Expenditure)
Keynesian Determination of National Income (Y=C+I+G+X-M)
Circular Flow of National Income
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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
+/- Net Factor Income from the rest of the world
Net National Product at Factor Cost
+ Capital Depreciation_____________________
Gross National Product at Factor Cost
+ Indirect Taxes
- Subsidies_______________________________
Gross National Product at Market Prices
Irish & foreign factors
Irish factors only
at the cost to the fop’s
at the prices paid in mkt
National Income
Uses of National Income
Limitations
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.
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.
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.
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.
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.
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
• 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 where
appropriate.
• Practice answering questions /
drawing diagrams.
Don’t
• 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
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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
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www.bized.co.uk
www.tutor2u.com
www.centralbank.ie
www.cso.ie
www.irlgov.ie/finance
www.adbusters.org
www.s-cool.co.uk/default.asp
www.examinations.ie