Unit 1 Secondary 3 Economics Teaching Slides

ECONOMICSSECONDARY 3

UNIT 1: THE ECONOMIC PROBLEM

SINGAPORE SCHOOL

Pantai Indah Kapuk

SECTION 1:WHAT IS THE ECONOMIC PROBLEM?

RESOURCES USED TO MAKE GOODS AND SERVICES ARE SCARCE (LIMITED).

HUMAN WANTS ARE UNLIMITED.

THEREFORE, THE ECONOMIC PROBLEM THAT WE ALL FACE IS ABOUT HOW WE CAN ALLOCATE LIMITED RESOURCES IN ORDER TO SATISFY UNLIMITED HUMAN WANTS.

RESOURCES

RESOURCES INCLUDE:

A) NATURAL RESOURCES SUCH AS OIL, GOLD, COAL, IRON ORE, ETC.

B) LAND

C) LABOUR (MANPOWER/PEOPLE)

D) CAPITAL (MACHINERY, TOOLS, ETC)

RESOURCES

RESOURCES ARE IMPORTANT BECAUSE THEY ARE USED TO MAKE GOODS SUCH AS CARS, HOUSES, TV AND TO PROVIDE SERVICES LIKE BANKING, INSURANCE, ETC.

ANY RESOURCES THAT ARE NOT SCARCE ARE CALLED FREE GOODS SUCH AS THE AIR THAT WE BREATHE.

NEEDS AND WANTS

NEEDS ARE GOODS OR SERVICES THAT ARE ESSENTIAL FOR LIVING.EXAMPLES: WATER, FOOD, SHELTER, CLOTHING, ETC.

WANTS ARE GOODS OR SERVICES THAT PEOPLE WOULD LIKE TO HAVE, BUT WHICH ARE NOT ESSENTIAL FOR LIVING. EXAMPLES: GOLD WATCHES, KFC, CARS, TELEVISION, ETC.

CHOOSING WHAT WE WANT

SINCE WANTS ARE UNLIMITED AND THE RESOURCES USED TO PRODUCE GOODS AND SERVICES ARE LIMITED,

PEOPLE MUST CHOOSE WHICH WANTS THEY WANT.

CHOICE IS NECESSARY BECAUSE SCARCE RESOURCES CAN BE USED IN MANY WAYS TO MAKE MANY DIFFERENT GOODS OR SERVICES.

CHOOSING WHAT WE WANT

SCARCE RESOURCES HAVE ALTERNATIVE USES (OPTIONS), BUT PEOPLE CAN ONLY CHOOSE ONE OPTION AS RESOURCES ARE SCARCE.EXAMPLE: SPARE LAND CAN BE USED TO BUILD A SPORTS COMPLEX OR A LEISURE CENTRE OR A SUPERMARKET, ETC.

PEOPLE CAN ONLY CHOOSE TO DO ONE OF THESE OPTIONS AS LAND IS A SCARCE RESOURCE.

HOMEWORK 1EXERCISE 5: ALTERNATIVES

SECTION 1 CONCLUSION:

PEOPLE, NATIONS AND THE WORLD MUST CHOOSE WHICH GOODS AND SERVICES TO MAKE BECAUSE THEY CANNOT MAKE EVERYTHING THAT THEY WANT.

SECTION 2:OPPORTUNITY COST: THE COST OF CHOICE

LIMITED RESOURCES, BUT SO MANY WANTS FORCES PEOPLE TO DECIDE WHICH WANTS THEY WILL SATISFY. THEY MUST MAKE A CHOICE. EVERY CHOICE THEY MAKE INVOLVES GIVING SOMETHING UP. THIS IS CALLED OPPORTUNITY COST.

OPPORTUNITY COST IS THE REAL COST OF GIVING UP (SACRIFICING) ANOTHER THING IN ORDER TO CHOOSE SOMETHING.EXAMPLES:A) WHEN A MAN CHOOSES TO BUY THE HOLIDAY, THE CAR BECOMES THE OPPORTUNITY COST.

SECTION 2:OPPORTUNITY COST: THE COST OF CHOICE

B) WHEN THE COMPANY DECIDES TO BUY MACHINE A, SO MACHINE B BECOMES THE OPPORTUNITY COST.C) WHEN THE GOVERNMENT CHOOSES TO BUILD THE ROAD, SO THE SCHOOL BECOMES THE OPPORTUNITY COST.

SECTION 2 CONCLUSION:

LIMITED RESOURCES AND UNLIMITED WANTS LEAD TO SCARCITY. CHOICE IS NECESSARY AND IT LEADS TO OPPORTUNITY COST.

SECTION 3WHAT IS ECONOMICS FOR?

ECONOMICS IS THE STUDY OF HUMAN BEHAVIOR ABOUT THE ALLOCATION OF LIMITED RESOURCES IN ORDER TO SATISFY PERSONAL AND NATIONAL REQUIREMENTS.

THEREFORE, THE PURPOSE OF ECONOMICS INVOLVES DECIDING HOW BEST TO USE SCARCE RESOURCES IN ORDER TO MAKE GOODS AND SERVICES TO SATISFY AS MANY WANTS AS POSSIBLE.

ECONOMICS TRIES TO INCREASE PEOPLE’S CHOICE.

SECTION 3WHAT IS ECONOMICS FOR?

SECTION 3 CONCLUSIONS:

WHEN PEOPLE HAVE MORE GOODS AND SERVICES TO CHOOSE FROM, THEY ARE BETTER OFF.

PEOPLE WHO LIVE IN DEVELOPED COUNTRIES USUALLY HAVE MORE RESOURCES TO PRODUCE MORE GOODS AND SERVICES TO CHOOSE FROM.

SECTION 3WHAT IS ECONOMICS FOR?

PEOPLE WHO LIVE IN A POORER COUNTRY HAVE FEWER RESOURCES TO MAKE GOODS AND SERVICES TO CHOOSE FROM.

IN SOME COUNTRIES, PEOPLE HAVE VIRTUALLY NO CHOICE AT ALL.

HOWEVER, THE SATISFACTION OF WANTS BY THE MAKING OF GOODS AND SERVICES CREATES PROBLEMS OF POLLUTION AND THE DESTRUCTION OF THE ENVIRONMENT.

SECTION 4A CONFLICT OF INTERESTS

SCARCE RESOURCES CREATE ALTERNATIVE USES.

ALTERNATIVE USES CREATE A CONFLICT OF INTERESTS. (DISAGREEMENT IN INTERESTS)

EXAMPLES:

THE CREATION OF MORE ROADS MAY NOT SATISFY THE WANTS OF THE FARMERS AND NATURE LOVERS.

EXERCISE 9ANYTOWN CONFLICT: A CASE STUDY

ECONOMICS TEXTBOOK PAGE: 11(ESTIMATED DURATION: 45 MINUTES)

2 GROUPS OF THREE OR FOUR STUDENTS.

THE REST OF THE CLASS WILL BE THE COUNCIL WHICH DECIDES BY MAJORITY VOTE HOW IT WILL SPEND THE ₤10 MILLION.

HOMEWORK 2EXERCISE 11: CONFLICTS

SECTION 4 CONCLUSION:

SCARCE RESOURCES LEAD TO ALTERNATIVE USES. THESE USES, IN TURN, LEAD TO A CHOICE MAKING THAT MAY CREATE CONFLICT OF INTERESTS.

DECIDING BY MAJORITY VOTE CAN BE ONE REMEDY TO AVOID OR MINIMISE CONFLICT OF INTERESTS.

SECTION 5VALUE JUDGEMENTS

A VALUE JUDGEMENT IS A JUDGEMENT BASED UPON OUR OWN OPINIONS.

WHAT IS RIGHT AND FAIR FOR ONE PERSON MAY NOT BE FOR ANOTHER.

ECONOMICS IS NOT ABOUT VALUE JUDGEMENTS OR OPINIONS THAT CANNOT BE PROVEN. IT CAN BE TESTED OR PROVED AGAINST FACTS.EXAMPLE: THE NUMBER OF UNEMPLOYMENT CAN BE TESTED BY COUNTING THE NUMBER OUT OF WORK.

SECTION 5VALUE JUDGEMENTS

SUGGESTING THAT GOVERNMENT SHOULD SPEND MORE MONEY ON REDUCING UNEMPLOYMENT IS A VALUE JUDGEMENT BECAUSE THERE COULD BE OTHER EFFECTIVE WAYS OF REDUCING UNEMPLOYMENT.

SECTION 5 CONCLUSION:

ECONOMICS DEALS WITH SATISFYING PEOPLE’S WANTS AND BECAUSE CONFLICTS ARISE DUE TO SCARCITY, WE CANNOT ALWAYS AVOID MAKING VALUE JUDGEMENTS AND SAYING WHAT SHOULD BE OR WHAT OUGHT TO BE.