Economicsis about resources and the decisions we make about how to use them to meet the needs of the people in a society. Resources are scarce relative to wants so decisions have to be made:What to produceHow much to produceHow to produceHow to allocateThe fundamental concept in economics is opportunity cost. Once a decision is made about resource allocation there will be an opportunity cost i.e. the next best alternative foregone once a decision has been made. Economists see the world with an ‘opportunity cost’ perspective. They respond to issues and events by considering what next best alternative has been foregone.Example: The 1980s … are coal mines ‘uneconomic’?A business person would want to know the costs of running the coal mine compared with the revenue it generates.An economist would ask ‘what are all the costs of keeping it open compared with all the costs of closing it?’If the coal mine is not making a profit a business person would close it.An economist would consider:Unemployment benefit paid to the former coal miners who have lost their jobsLost tax revenue from unemployed coal minersThe impact on other local businesses as increased unemployment reduces spending power in the area (cafes, pubs, shops may go out of business)Unemployment in firms which supply components to coal minesBy the end of Key Stage 5, the intention is that students learn to think, speak and write like an economist.They will respond to real world issues of resource allocation by asking what alternative has been foregone.They will have a good understanding of economic concepts and economic models and will be able to use these to predict the behaviour of economic agents.At the same time, they will recognise the situations in which these predictions may not become a reality.They will understand that economic modelling is based on sets of assumptions; and will learn to manipulate these assumptions and see whether/how this changes the predictions.They will be able to apply economic concepts and models to both macroeconomic and microeconomic situations in the real world.Written work will be clear, accurate and detailed; and will be structured in the following way: identify / explain / analyse / evaluate / judgement. Students as economists will be able to identify and explain relevant economic theories, to analyse what the theory predicts in given situations, to evaluate why this may not happen and to make judgements about the circumstances in which it is more or less likely to occur. A clear chain of reasoning will run through all written work using the PEEL framework. Economic terminology will be used with confidence.
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