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Economics

Mark Twain International School

Economics Course Description

The Economics course is the best option for students who want to know more about the world they are living in.

Why?

• all of us are consumers, from the day we are born, to the day we die;
• we all have to produce (work) in order to sustain our consumption;
• we all suffer the consequences produced by the economy and economic decisions.

Also, whether we want or not, we will be constantly bombarded with terms such as:

• economic boom or depression;
• inflation and unemployment;
• wage increases or minimal wages;
• taxes and subsidies;

It is therefore important for students to be aware of the rules laid out by the economies we live in, but also to be active participants in these economies.

Focus

The focus of this course is on understanding the interdependence of complex activities present in current economies, but also dealing with one of the life’s biggest conflict: the conflict between the scarcity of resources and the infinity of needs and wants.
Shortly, economics is about trying to solve this conflict in part, as solving it entirely is not possible for now, and may never be possible.

Concepts

The IB DP Economics course proposes a number of nine key concepts. Understanding these concepts is similar to understanding economics, so a great focus is placed on them.

The nine concepts and their relation to the course is summarized as follows:

1. Scarcity

The limited availability of economic resources and the infinity of needs and wants; How to make the best use of our limited resources in order to maximize the results.

2. Choice

Not all needs and wants can be satisfied, so choices have to be made; Whenever a choice is made, something is sacrificed (opportunity cost); What are the consequences of choice?

3. Efficiency

How do we maximize our outputs while minimizing our inputs?

4. Equity

How is equity different from equality?
What role should governments play in creating equity?
What are the consequences of governments enforcing equity or equality?

5. Economic well-being

Financial security, both present and future;
Meeting basic needs;
Increasing the variety of choices individuals can make; Achieving personal satisfaction.

6. Sustainability

Behaving in such a way that our current consumption of resources and satisfaction of needs does not compromise the ability of future generations to consume the same resources and satisfy their needs.

7. Change

As does every aspect of our lives, the economy is also constantly changing; Individuals must be prepared to understand change and adapt.

8. Interdependence

Individuals, businesses, communities and countries are all interdependent. The more we trade with each other, the more interdependent we are. Every economic decision will have consequences.

9. Intervention

What should be the role of the government in the economy?
Should the government enforce certain outcomes, or should markets be let free?

Overview

The IB DP Economics course proposes a four-part structure, one of them being an introduction:

Part I: Introduction to economics

Basic economic concepts will be presented in this part and students will get to understand basic models economists use.
There is also a brief history of economic thinking, which lets us understand today’s debates regarding various economic systems.

Part II: Microeconomics

Major concepts will be studied in this part:
• Demand and supply, the two single market forces;
• Market equilibrium and market failure;
• Competition (for HL);
• The role of governments in microeconomics.

Part III: Macroeconomics

Macroeconomics is the “big picture” and looks at the economy from a national level
perspective. The focus is on:
• Macroeconomic objectives (such as economic growth);
• Aggregate demand and aggregate supply, as well as macro indicators (such as the Gross Domestic Product – GDP);
• Government intervention – demand-side policies and supply-side policies.

Part IV: The global economy

This part goes in two main directions: international economics and development. When talking about international economics, following topics are crucial:
• What is free trade and why do we need free trade?
• Types of protectionist measures and reasons for using them;
• Economic integration (such as the EU);
• Exchange rates – why do currencies increase or decrease their value?
• Balance of payments – what happens if a country imports too much?

The topic of development will bring up a few topics as well:
• The pursuit for sustainable development;
• How to measure development;
• Challenges faced by some countries in achieving development.

Course duration

2 years (incl. examination session)

Teacher

IB DP Economics Teacher: Alexandru Natsis – Economist