G11 - Week 9 - Day 1

In-class work

1. Exercises 1-3, page 133
2. Positive Externalities of Production as a Market Failure
3. Positive Externalities of Consumption as a Market Failure

Upcoming

1. Ch. 5-6 assessment on Thursday, October 20th
2. Make sure to be reading news sources and collecting real-life examples of market failures 

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From the blogosphere

1. More Migration Thoughts
2. A Trump Presidency Will Kill Thousands, Possibly Millions

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Currently Reading

Other People's Money: The Real Business of Finance

In most Western economies today, the assets and liabilities of banks exceed the assets and liabilities of the government and the aggregate annual income of everyone in the country. But these assets and liabilities are mainly obligations from and to other financial institutions. Lending to firms and individuals engaged in the production of goods and services— which most people would imagine was the principal business of a bank— amounts to less than 10 per cent of that total. In Britain, with a particularly active financial sector, that figure is less than 3 per cent. (Kindle Locations 181-185)

G11 - Week 8 - Day 2

In-class work

1. Chapter 5 exercise questions/closure - 10 minutes
2. Introduction to Market Failure - Negative Externalities of Production
3. Negative Externalities of Consumption as a Market Failure
1. Exercises 1-3, page 133

Upcoming

1. Ch. 5-6 assessment on Thursday, October 20th
2. Make sure to be reading news sources and collecting real-life examples of market failures 

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From the blogosphere

1. Free trade has been good for the poor
2. Dueling Samuelson’s Ghost

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Currently Reading

Exodus: How Migration Is Changing Our World

The above diagram shows what can potentially happen when large groups of migrants move into a host country. The diaspora (migrants living in the host country) can indefinitely grow in size when they are unable or unwilling to integrate into the host country's society. This can lead to a number of issues, namely a break down of mutual regard and perhaps emigration of the host citizens to other countries.

G11 - Week 8 - Day 1

In-class work

1. Exercises 8-18 on page 107 (HL Only)
2. The Effects of a Per Unit Subsidy
1. Exercises 19-23 on page 109
3. Calculating the Effects of a Subsidy using Linear Equations (HL Only)
1. Exercises 24-34 on page 112
4. Determining the Effects of Price Ceilings and Price Floors
5. Calculating the Effects of Price Controls using Linear Equations (HL Only)
1. Exercises 35-46

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From the blogosphere

1. The Great Californian Bag Surplus, by Bryan Caplan
2. WTO Doha deal would make world $11-trillion richer by 2030: Economists
3. Feeding people is smart: It's the best investment to do good in the world

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Currently Reading

Exodus: How Migration Is Changing Our World

I will refer to the combination of institutions, rules, norms, and organizations of a country as its social model. Even among high-income countries social models differ considerably. America has particularly strong institutions and private organizations, but somewhat weaker public organizations than Europe, and Japan has much stronger norms of trust than either of them. But though they differ in detail, all high-income societies have social models that function remarkably well. Quite possibly, different combinations work well because the components adapt so as to fit each other: for example, institutions and norms may gradually evolve so as to be well suited given the state of narratives and organizations. But such adaptation is not automatic. On the contrary, hundreds of different societies existed for thousands of years before any of them happened upon a social model capable of supporting the ascent to prosperity. Even the Glorious Revolution was not undertaken with the objective of unleashing prosperity: it was triggered by a mixture of religious prejudice and political opportunism. The English social model that emerged in the eighteenth century was replicated and improved in America. This in turn influenced social revolution in France, which exported its new institutions by force of arms across western Europe. The key point I wish to convey is that the present prosperity enjoyed in the Western world, and which is belatedly spreading more widely, is not the outcome of some inevitable march of progress. For thousands of years until the twentieth century ordinary people were poor, everywhere. A high living standard was the privilege of extractive elites rather than the normal reward for productive work. Had it not been for a fortuitous combination of circumstances that relatively recently produced a social model conducive to growth, this dreary state of affairs would most likely have continued. In poor countries it continues still.

If the prosperity of the high-income world rests on this platform, it has crucial implications for migration. Migrants are essentially escaping from countries with dysfunctional social models. It may be well to reread that last sentence and ponder its implications. For example, it might make you a little more wary of the well-intentioned mantra of the need to have “respect for other cultures.” The cultures— or norms and narratives— of poor societies, along with their institutions and organizations, stand suspected of being the primary cause of their poverty. Of course, on criteria other than whether they are conducive to prosperity these cultures may be the equal of, or superior to, the social models of high-income societies. They may be preferable in terms of dignity, humanity, artistic creativity, humor, honor, and virtue. But migrants themselves are voting with their feet in favor of the high-income social model. Recognizing that poor societies are economically dysfunctional is not a license for condescension toward their people: people can as readily earn the right to respect while struggling against a hostile environment as while succeeding in a benign one. But it should put us on our guard against the lazier assertions of multiculturalism: if a decent living standard is something to be valued, then on this criterion not all cultures are equal. (pp. 33-35)

G11 - Week 7 - Day 3

In-class work

1. Indirect taxes' Effect on Supply - part 2
1. Exercises 1-2 on page 99
1. Exercises 3-7 on page 103-104 (HL Only)
2. Calculating the Effects of a Specific, Indirect Tax (HL Only)
1. Exercises 8-18 on page 107
3. The Effects of a Per Unit Subsidy
1. Exercises 19-23 on page 109
4. Calculating the Effects of a Subsidy using Linear Equations (HL Only)
1. Exercises 24-34 on page 112
5. Determining the Effects of Price Ceilings and Price Floors
6. Calculating the Effects of Price Controls using Linear Equations (HL Only)
1. Exercises 34-46

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From the blogosphere

1. Economic Question of the Day
2. Trump Plans Quote of the Day
3. Immigration and the  experts

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Currently Reading

The Fourth Industrial Revolution

The first industrial revolution spanned from about 1760 to around 1840. Triggered by the construction of railroads and the invention of the steam engine, it ushered in mechanical production. The second industrial revolution, which started in the late 19th century and into the early 20th century, made mass production possible, fostered by the advent of electricity and the assembly line. The third industrial revolution began in the 1960s. It is usually called the computer or digital revolution because it was catalysed by the development of semiconductors, mainframe computing (1960s), personal computing (1970s and 80s) and the internet (1990s). 

Mindful of the various definitions and academic arguments used to describe the first three industrial revolutions, I believe that today we are at the beginning of a fourth industrial revolution. It began at the turn of this century and builds on the digital revolution. It is characterized by a much more ubiquitous and mobile internet, by smaller and more powerful sensors that have become cheaper, and by artificial intelligence and machine learning. 

Digital technologies that have computer hardware, software and networks at their core are not new, but in a break with the third industrial revolution, they are becoming more sophisticated and integrated and are, as a result, transforming societies and the global economy. This is the reason why Massachusetts Institute of Technology (MIT) Professors Erik Brynjolfsson and Andrew McAfee have famously referred to this period as “the second machine age” 2, the title of their 2014 book, stating that the world is at an inflection point where the effect of these digital technologies will manifest with “full force” through automation and and the making of “unprecedented things”.

Schwab, Klaus. The Fourth Industrial Revolution (Kindle Locations 113-127). World Economic Forum. Kindle Edition. 

G11 - Week 7 - Day 2

In-class work

1. Peer review and mark ch. 3-4 assessments
2. Indirect taxes' Effect on Supply - part 1
3. The Effects of an Excise Tax - Elastic Demand  (HL Only)
4. The Effects of an Excise Tax - Inelastic Demand (HL Only)
1. Exercises 3-7 on page 103-104

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From the blogosphere

1. Presidential Candidate Plans for Achieving American Prosperity
2. What are the world’s biggest problems?

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Currently Reading

Education for Sustainable Happiness and Well-being

Countless agencies, governments, and organizations have been dedicated to meeting even the most foundational schooling needs for children, and yet, as the United Nations Education, Scientific, and Culture Organization (UNESCO) reported in 2015, key global Education for All (EFA) goals that governments agreed to at the World Education Forum in Dakar in 2000 have not been attained, though some important headway has been made: 

There has been tremendous progress across the world since 2000— but we are not there yet. Despite all efforts by governments, civil society and the international community, the world has not achieved Education for All. 

On the positive side, the number of children and adolescents who were out of school has fallen by almost half since 2000. An estimated 34 million more children will have attended school as a result of faster progress since Dakar. The greatest progress has been achieved in gender parity, particularly in primary education, although gender disparity remains in almost a third of the countries with data. Governments have also increased efforts to measure learning outcomes through national and international assessments, using these to ensure that all children receive the quality of education they were promised. 

And yet, for all this progress, 15 years of monitoring shows sobering results. 

There are still 58 million children out of school globally and around 100 million children who do not complete primary education. Inequality in education has increased, with the poorest and most disadvantaged shouldering the heaviest burden. The world’s poorest children are four times more likely not to go to school than the world’s richest children, and five times more likely not to complete primary school. Conflict remains a steep barrier, with a high and growing proportion of out-of-school children living in conflict zones. Overall, the poor quality of learning at primary level still has millions of children leaving school without basic skills. (UNESCO 2015, p. i)

O'Brien, Catherine. Education for Sustainable Happiness and Well-Being (pp. 205-206). Taylor and Francis. Kindle Edition. 

G11 - Week 7 - Day 1

In-class work

1. Work on ch. 3-4 commentary assessment
2. Hand in hardcopy by end of class

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From the blogosphere

1. Firms that Discriminate are More Likely to Go Bust
2. Is Sustained 4 Percent Annual Real Growth Achievable?
1. “As we noted in our 16 Myths document, the last time the U.S. had 4 percent growth on average for 25 years was 1940-1964. And in the modern context with an aging population and a large percentage of women now already in the labor force, pursuing a number of pro-growth policies mentioned would only achieve about 3 percent real growth at best over the long run. Therefore, it would be very difficult to achieve sustained 4 percent annual real GDP growth.”
3. These charts prove that the world is getting dramatically better, not worse

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Currently Reading

Education for Sustainable Happiness and Well-being

EDUCATION FOR SUSTAINABILITY  

Education for sustainability is more than just a new curriculum. It is about how the content and process of education can be interwoven with real-life contexts to create opportunities for young people to take the lead in building sustainable communities and societies. Peter Senge (2014, p. 325) 

Peter Senge (2014) recounts the story of 12-year-old Analise during a student presentation evening. There were 250 people gathered to hear about the students’ sustainability projects. Analise represented her group and briefly described the wind turbine project that she and her peers had created at their middle school. Installing the wind turbine had involved many of the steps that Zhao (2012) outlined in product-oriented learning, including a presentation to the principal and the town’s mayor, as well as garnering expertise from parents to explore engineering and investment options. The scope of the project itself is impressive. Even more impressive is her wisdom and courage to challenge the adult audience. Senge tells us that once her presentation was finished,  

Analise set aside her notes and standing calmly, some 75 pounds of fierce determination said, “We children are often hearing that ‘you children are the future.’ We don’t agree with that. We don’t have that much time. We need to make changes now. We kids are ready, are you?” (Senge, 2014, p. 328)  

Analise is absolutely right. We need to make changes now. Muddling along with small revisions to curricula here and there is drastically out of step with the pressing need for educators to demonstrate greater leadership in sustainability education. (p. 85)

G11 - Week 6 - Day 2

In-class work

1. Applications of Elasticity (PED, XED and YED)
2. Find news article for practice IA assessment of ch. 3-4
1. How to Structure an Economics IA
2. Evaluation in Economics
3. Sample Micro IB Economics IA
4. Assessment Marking - See IA Rubric
3. Ch. 3-4 practice commentary will be handed in at the end of next class (hardcopy)

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From the blogosphere

1. Egalitarianism versus Online Education
2. Robert Shiller on Open Borders

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Currently Reading

Education for Sustainable Happiness and Well-being

“Many of the arguments in favor of innovation build on the premise that the most innovative countries are also the most economically competitive. Hence, the need for education to shift from contributing to the older industrial model of economic development to the modern era where the knowledge economy is paramount. Discussions rarely make the connection to sustainability. Tony Wagner is an exception: 

What we urgently need is a new engine of economic growth for the twenty-first century. The solution to our economic and social challenges is the same: creating a viable and sustainable economy that creates good jobs without polluting the planet. And there is general agreement as to what that new economy must be based on. One word: innovation. (Wagner, 2012, p. 2) 

Wagner builds on the work of Teresa Amabile (1998) regarding creativity to discuss the factors that help to develop innovators. Both Amabile and Wagner see critical thinking, developing expertise, and motivation as the three key factors that interact with one another. Likewise, they both have the view that motivation is more important than expertise and creative thinking skills because this determines what you will do with the skills you have developed. They further distinguish between intrinsic and extrinsic motivation. Extrinsic motivation refers to factors outside oneself. It could mean that motivation comes from other people, a desire for approval, good grades, or fear of failure. Intrinsic motivation is more internal and is associated with interest, curiosity, satisfaction, a sense of achievement, and so on. Wagner believes that the essential ingredients for intrinsic motivation are play, passion, and purpose. This was borne out through his interviews with innovators. 

As an interesting side note, positive psychologists have found that people who are intrinsically motivated tend to report greater life satisfaction, so there is an association between intrinsic motivation and happiness (Brown & Kasser, 2005; Kasser, 2014). For example, people who are extrinsically motivated tend to place greater value on popularity, social image, and financial success. In contrast, people who are intrinsically motivated are inclined to have values that contribute to their well-being or that of others." (pp. 60-61)

1. Do you think schools operate with the above ideas as primary to their purpose?
2. If no, how would schools operate differently if they did devote themselves to the above ideas?