Well-Being(Economic) well-being: Equality is not the same as equity. Equality refers to the same or similar economic outcomes for different groups or individuals. Equity relates to fairness, a normative concept. A normative statement is one that makes a value judgment. Such a judgment is the opinion of the speaker; no one can “prove” that the statement is or is not correct. Inequity (unfair) is often referred to as inequality, in economics, and may refer how income, wealth or even opportunity is distributed in society. Irrespective of society or economic system, inequity and inequality are significant issues, both between societies (e.g., Zimbabwe and Denmark) and within societies (e.g., men and women in Saudi Arabia). An area of economic debate is whether markets or governments can, or even should, create more equity and reduce inequality in societies. ScarcityScarcity: Scarcity is a central concept in economics. Scarcity is the situation in which available resources, or factors of production, are finite, whereas wants are infinite. There are not enough resources to produce everything that we need and want. The basic economic problem that arises because people have unlimited wants but resources are limited. Because of scarcity, various economic decisions must be made to allocate resources efficiently. ChoiceChoice: Economics is the study of choice because resources are scarce and many needs and wants cannot be satisfied. As such, choices must be made, and whenever a choice is made an opportunity arises. Households, businesses and governments are always making choices between alternatives competing with each other. The consequences of such choices, present and future, is studied in economics. ChangeChange: Change is an essential concept in economics. As economists, we need to be aware that the economic world is in a state of constant change and adjust our thinking accordingly. Change is an important concept in economic theory and in empirical evidence from the real world. Change is relevant to economic variables (e.g., a change in the unemployment numbers) and from one situation to another (e.g., a Russian invasion of a sovereign nation). Our economic world is subject to profound and continuous economic change that occurs in technologies, institutions, and societies, as well as structural change (a dramatic shift in the way an industry or market functions). SustainabilitySustainability: Sustainability focuses on meeting the needs of the present without compromising the ability of future generations to meet their needs. Sustainability refers to limits on current economic activities that harm our environment by depleting and degrading resources, negatively impacting future generations (e.g., climate change won’t impact boomers as severely as Gen Zs or Gen Alphas). Good economic analysis considers sustainability as our world’s resources, boundaries and capacities are pushed to their limits. | InterdependenceInterdependence: Individuals, communities and countries are interdependent, not self-sufficient. Economic groups such as consumers, households, businesses, and governments all interact together within and across national borders to achieve their economic goals. The more these groups interact, the more they are interdependent. The economic world is highly interdependent, and decisions made by economic actors can cause many unintended consequences for other economic actors. When conducting an economic analysis, it is important to consider interdependencies. EfficiencyEfficiency: Efficiency is quantifiable – a ratio of inputs to outputs. Efficiency could be using less inputs to achieve the same quantity of output or using the same amount of inputs to achieve greater output. Allocative efficiency is where scarce resources are put to their best possible use in producing goods and services in optimal combinations for society, minimising the waste of resources.
InterventionIntervention: In economics, intervention means governments getting involved to rectify perceived failure in markets (e.g., taxation and redistribution). Markets may be the most efficient at organising scarce resources, but they often fail to achieve many of the goals of societies such as economic well-being, equity, or sustainability. Such failures may be considered just cause for government intervention, however, there is considerable disagreement between policy makers and economists as to the need for intervention, the type of intervention to be used, and the extent of any such intervention. There is much debate about the merits of the free market and the merits of intervention. EquityEquity: Equity, being different to equality (sameness), refers to the normative concept of fairness. Fairness has a different meaning from one person to the next. Inequity (unfair) is often referred to as inequality, in economics, and may refer how income, wealth or even opportunity is distributed in society. Irrespective of society or economic system, inequity and inequality are significant issues, both between societies (e.g., Zimbabwe and Denmark) and within societies (e.g., men and women in Saudi Arabia). An area of economic debate is whether markets or governments can, or even should, create more equity and inequality in societies. |
IB Economics:1.1 What is economics? teaching and learning PowerPoint notes for HL and SL IB Economics.
You have below, a range of practice activities, flash cards, exam practicequestionsand an online interactive self test to ensure you have completemastery of the IB Economics requirements for the Introduction to Economics: What is economics?topic.
Test how well you know the IB EconomicsIntroduction to Economics: What is economics?topic with the interactive self-assessment quizzes below. Each interactive quizselects30 questions at random from a much larger question bankso keep on practicing!Aim for a score of at least 80 per cent.
