IGCSE Economics
Price Elasticity of Supply
Oct 25th
From flickr.com. Uploaded on April 2, 2007 by SideLong
Before starting to understand Price Elasticity of Supply, it is worth recapping Price Elasticity of Demand. Click on the following link:
www.business2000.ie provides an interactive quiz on PED
This site introduces the main concepts of Price Elasticity of Supply:
Slideshow from http://www.econ.ucsb.edu
This site gives a useful overview of PES:
This web page details price elasticity of supply, but is a little complicated:
http://dotlearn.com/topics/Economics/1040/content/
This web page provides information on how time effects PES:
This site gives a useful interactive demonstration of PES calculations:
http://www.college-cram.com/study/economics/presentations/619
This video from pajholden helps understand the concept further (note, this is suited to A Level / IB students):
Finally, if you think you’ve made yourself an expert in PES, you can test your understanding using the following quiz:
Supply and Demand Interacting – The Equilibrium Price
Sep 28th
Understand Demand? Understand Supply? Now we need both hands to clap, and when we put them together we can understand how prices are arrived at when market forces are left to their own devices (and also when they’re not). What Adam Smith called the invisible hand … you need to know this concept like the back of your own (not so invisible) hand.
Quite a lot of video tutorials on this fundamentally important economic concept.
Probably the best way to start (again) – take it away mjmfoodie:
Perhaps more detailed, jodiecongirl tackles market equilibrium:
But for an even deeper level of detail, here are two videos by richardmckenzie (note his tutorials are geared towards an MBA course!):
http://www.whitenova.com/thinkEconomics/supply.html
Now that you have hopefully grasped the fundamentals, it is worth checking your understanding further through these interactive tutorials:
http://hadm.sph.sc.edu/courses/econ/sd/sd.html
Notice that the above tutorial continues on to another page:
http://hadm.sph.sc.edu/courses/econ/sd/SD3.html
There are two good podcasts publishes by Biz/Ed which also include transcripts and possible questions:
Supply
Sep 27th
Introduction and summary by MJMFoodie:
jodiecongirl runs through the determinants of supply:
jodiecongirl explains movements along and shifts of the supply curve:
Follow up activities to check your understanding:
Original MS Powerpoint file here
Causes of Inflation
Sep 14th
MJMFoodie overview:
1) Monetary Inflation
Watch the first part of this video until 1 minute 30 seconds in (you can watch the rest for a historical example of inflation in the US, but this is not essential to our understanding at this point)
2) Demand Pull and Cost Push Inflation
Introducing Demand
Sep 13th
EXCEL spreadhseet to explore / predict how a demand ‘curve’ might work.
MJMFoodie video introducing demand:
Slideshow to prompt discussion / thought around the different variables that might move the demand curve. [IB students should know how this relates to the concept of ceteris paribus (look it up) and that changes in these variables are breaking the ceteris paribus assumption. IGCSE students need not worry too much about this.]
Link to original MS Powerpoint here.
If you need to review this, see the video on determinants of demand by jodiecongirl
These changes cause the entire demand curve to shift either to the left or the right.
MJMFoodie video on change in demand versus change in quantity demanded
Check the difference between “movements along" and “shifts of” the demand curve by exploring these interactive examples:
Changes to the Demand Curve at www.joehoy.com
You need to be really clear that demand is different from quantity demanded. This interactive tutorial by www.reffonomics.com should emphasise this even more:
The Difference Between Quantity Demanded and Demand
Also, jodiecongirl gives an excellent summary on changes in demand and shifts of the demand curve:
Once you think you have understood the concepts introduced above, here are some activities to attempt on line to check and consolidate your understanding.
Economics Interactive Tutorial by Sam Baker at the University of South Carolina
Visit this animation and explore it to answer the following questions:
http://www.bized.co.uk/learn/economics/markets/mechanism/interactive/demand1.swf
The diagram shows the amount consumers would like to purchase at a price of £5 (32) What happens in the following cases?
- Price rises to 8
- Price rises to 9
- Price falls to 3
- Price falls to 1
Explain why people may react in the way you have observed.
[Activity taken from http://www.bized.co.uk/learn/economics/markets/mechanism/interactive/part1.htm]
The Circular Flow Of Income
Sep 9th
To view an excellent introductory animation to introduce the concept of the circular flow of income, visit this page from the excellent Macroeconomics, Manfred Gärtner, Resources For Students site. A large copy of the same flash file is here.
A couple of youtube videos should also help explain this model.
First the long one:
Source: lousycracker
And now a shorter video:
Source: BrynJonesOnline
Source: jodiecongirl – best suited to A-Level or IB students
Video: Circular Flow of Income – Macroeconomics [pajholden – best suited to A-Level or IB students]
Once you think you’ve begun to understand it, you can explore an interactive circular flow for yourself, also from the above mentioned Manfred Gärtner site. Click here.
S-Cool website gives quite a detailed explanation, best suited to A-Level or IB students here.
The Economic Health Of A Country
Aug 26th
[License: Some rights reserved by juhansonin]
As we begin to explore macroeconomics, it is worth thinking about some of the key things that we will be looking at and how they apply to a real life country.
Economists agree that there are four main macroeconomic goals which most governments consider when managing their economy (and some governments, as we know, manage their economies more directly than others). The four macroeconomic goals are:
1) Growth (an increase in the country’s total output)
2) Low Unemployment (or put another way, high employment)
3) Stable General Price Level (while it is accepted that a small amount inflation is manageable, both high inflation and deflation are seen to be undesirable).
4) A Healthy Balance of Payments (for example, importing more goods and services than those that a country exports can be seen to be undesirable in the long run).
Sometimes, a fifth macroeconomic goal is added, although we should recognise that it clearly appears to be of variable importance to the different governments of the world:
5) Equity (an even distribution of wealth within the country)
There are other macroeconomic goals that are sometimes considered which you may come across in your research.
A good research task is to consider these macroeconomic goals for a country and gather data on a number of economic indicators for your country. Examples of such indicators include:
- GDP and / or GNP
- GDP per capita / and or GNP per capita
- Rates of Inflation
- Interest Rates
- Unemployment Levels
- Balance of Trade (Imports versus Exports)
- Distribution of Wealth
You could choose a country that has signed up to the OECD. What does that stand for, and why would a country want to belong to this organisation?
Look at the economic health for your chosen country over the past ten years. Gather text, images and even video links to support your findings. If you can, try to see why they changes but don’t worry about this too much – this can be complicated and we haven’t even studied the theory yet.
A great way to present your findings would be to produce a ‘glog’ or online poster. You can host your glogs at http://www.glogster.com/ and teachers can even set up accounts for their class here: http://edu.glogster.com/
Make your glog as informative as possible. Try to mix up text, images, graphs and tables and possible short video clips (from youtube for example). Remember to give a title and explain your chosen country’s membership of the OECD.
Taxation
Aug 19th
The syllabus requires that you able to do the following:
describe the types of taxation (direct, indirect, progressive, regressive, proportional) and the impact of taxation;
Direct versus Indirect
Compare these two definitions:
http://en.wikipedia.org/wiki/Direct_tax
http://en.wikipedia.org/wiki/Indirect_tax
Can you explain the difference between direct and indirect tax with example taxes?
Progressive, Regressive, and Proportional Tax
ONE Massachusetts demonstrates the different types of taxes:
The arguments surrounding and Impacts of these types of taxes (Progressive, Regressive, and Proportional)
An argument in favour of Progressive Taxes by David Cay Johnston:
An argument against progressive taxes by Mike Huckabee:
Specific Examples of Taxation
This mjmfoodie video includes specific examples of US taxes, then a section on how taxes relates to the government’s budget (which is worth understanding in general terms) and finally a section reviewing the general types of taxes.
A good overview of different taxes (some of which is a little complex):
http://lhepburn.com/team/work/media/Economics/notes/ch14/ch14.swf
Another complex web page (at times) which is aimed at education higher than IGCSE but includes some very useful info on this topic:
http://tutor2u.net/economics/revision-notes/a2-macro-direct-indirect-taxation.html
Testing Your Understanding
A ‘tic tac toe’ game which puts some of the above to the test but you may also need to use your common sense and a bit of guesswork. Play as two people.
Use this interactive activity to classify different examples of taxes (US based):
Another interactive quiz:
Grade or No Grade – Taxes – by Dinesh Bakshi
Although aimed for A Level (higher qualification than IGCSE) this is an excellent summary of the main points regarding tax:
Taxation by busniesstudiesonline
A discussion on different taxes – this is quite a complex discussion at times – how much of it do you understand having studied the above?
Output, Costs, Revenue and Profit
Feb 1st
[Image: nDevilTV 
Some rights reserved]
The Cambridge IGCSE syllabus requires us to have a good understanding of the following:
We have seen useful videos on YouTube before, particularly MJMFoodie’s very visual explanations (which are often aimed at higher stages of education, such as IB). One of her useful videos (on fixed and variable costs) is here:
Another useful video by MJMFoodie gives an introduction to the topic and explains the idea of the law of diminishing returns.
A great idea for a learning activity to really understand this topic is for you to work with one other person towards producing your own video, MJMFoodie style. It should be simple – create a PowerPoint (or similar) with images. These images can be your own that you have drawn on the computer, scanned into the computer, or other images produced by other people. It is obviously preferable to use images that are not copyrighted, so some good places to visit for non-copyright images are here:
http://www.everystockphoto.com/
http://search.creativecommons.org/
As you assemble your slideshow, make sure you are working on your script to go with each slide. Later on you will want to record your voiceover while playing the slideshow. In that case, planning the video out is essential and you should start with your partner by story-boarding the video.
Your video should summarise this theory on costs, revenue and profit as outlined in the syllabus above. It should summarise it in a highly visual and accessible way. Your video should ideally last somewhere between 5 and 10 minutes.
A good starting point is to consult the relevant chapter in the text book you are using. A good text book is this one, which introduces the idea using Sue’s Teddy Bear Firm.
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Economics: A Complete Course for IGCSE and O Level: Endorsed by University of Cambridge International Examinations |
Other simple summaries of aspects of this topic are found here:
Tutor2U – Simple Overview of Output, Fixed Costs and Variable Costs
Tutor2U – Simple Overview of Revenue, Costs and Profit
Tutor2U – Simple Overview of Average Costs and the Scale Of Production
Market Failure
Nov 27th
These YouTube clips help us to understand some of the ideas to do with Market Failure. Some of the ideas in the first clip are not needed for IGCSE understanding (adverse selection and moral panic).
1) General understanding of Market Failure
2) Negative Externalities Explained
Note this uses Marginal Costs and Marginal Benefits curves. Marginal Benefits is the same as the Demand Curve. Marginal Costs is the same as the Supply Curve.
3) Public Goods
