Economics- What is it about?

Subject orientation handout>

Branch Note:

Economics is essentially a subject that looks at choices - how individuals, governments and businesses make them and what the consequences of making those decisions are. There is a strong likelihood that every issue raised in the class involves some form of decision or choice.

The economy is faced with three key questions that have to be answered - irrelevant of the complexity of the economic system involved.

1. What goods and services should be produced? - Should the economy focus on being self sufficient or concentrate on what it is good at? Should it devote resources to health and education or defence and policing? Should we devote more resources to housing? Should an economy use resources producing goods that are essentially useless - like 'free' toys in cereal packets, football sticker cards and so on?

2. How should goods and services be produced? - Should the economy use a system that is labour intensive and thereby ensures everyone has a job who wants one or should we use more efficient methods of production that involve the use of machines even if this means more pollution and fewer jobs? Should we devote more land to production and thus solve some problems of feeding the population at the expense of encroaching into areas of natural beauty?

3. Who should get the resources that the economy has produced? - Should an economy be geared to providing goods and services to every person as equally as possible or should those who work hard get more? How do we distribute our resources?

Attached text:

The most commonly asked question at induction evenings for prospective AS/A2 students!