Ukraine 10 клас Economics (profile level)
Chapters: 2
1. Fundamental concepts of economics
Economics as a science (5 h) · Main economic phenomena (8 h) · Consumer, needs and interests (7 h) · Scarcity and producer choice (8 h) · Property relations (3 h) · Economic systems and circular flow (4 h)
- Economics Basics: How People, Firms and the State Choose – Economics is the science of how people, firms and governments use limited resources to meet unlimited wants. Needs are met by goods and services (free vs economic goods, consumer vs capital goods, private vs public goods). Because of scarcity, every society answers What, How and For whom to produce. Three economic agents act: households (work, consume, save), firms (produce and sell to earn profit = revenue − cost) and the state (rules, taxes, public services). Economics uses methods like observation, models and statistics; it splits into microeconomics (one household, firm, market) and macroeconomics (whole economy: GDP, unemployment, inflation, cycles). Social goals include growth, full employment, stable prices, fair income sharing and sustainability.
- Factors of Production: Land, Labour, Capital and Enterprise – Factors of production are the resources used to make goods and services. There are four: land (natural resources, rewarded with rent), labour (human effort, rewarded with wages), capital (man-made tools and machines, rewarded with interest) and enterprise (organising the others and taking risk, rewarded with profit). Because wants are unlimited but these resources are scarce, every society must choose what to produce, how and for whom. The purpose of economic activity is to satisfy as many wants as possible.
- Introduction to Microeconomics and the Production Possibility Frontier – Microeconomics studies single units like one buyer or one firm; macroeconomics studies the whole economy. Resources are scarce and have other uses, so every economy must decide what, how and for whom to produce. The production possibility frontier (PPF) shows the best mixes of two goods an economy can make with all its resources used fully. Moving along it has an opportunity cost, which usually rises, so the PPF is concave.
- Property Law: Ownership and Property Rights – Ownership is the strongest right a person can have over a thing. It gives three powers: to keep it (possess), to use it and earn from it, and to sell, give away or change it (dispose). Property can be owned privately, jointly, by a cooperative or by the state. The law protects owners, but ownership also has limits: you must not harm others, and the state may take property for a public need if it pays fair compensation.
- Economic Systems: Who Decides What, How and for Whom? – Every society has limited resources and must decide what to produce, how to produce it and for whom. A traditional economy answers by custom, a market economy by prices and private choice, and a command (planned) economy by a government plan. Capitalism is built on private ownership and markets; socialism on shared or state ownership and planning. Real countries are mixed economies: markets make most goods while the government provides public services, rules and support.
2. Fundamental processes of the market economy
Market answers to what, how, for whom (7 h) · Money in the market economy (7 h) · Demand, supply and market price (8 h) · Elasticity of demand and supply (8 h) · Market structure: different markets (7 h) · Incomes in the market economy (8 h) · Market infrastructure (10 h)
- Money and Credit – Money is a medium of exchange that removes the need for a double coincidence of wants. Banks take deposits and give loans. Credit can help people grow, or trap them in debt, depending on its terms. Formal loans from banks and cooperatives are cheaper and regulated; informal loans from moneylenders are costly. Self-Help Groups bring cheap credit to poor women.
- Perfect Competition and Price Determination – In perfect competition, very many firms sell the same product to very many buyers, so each firm is a price taker. The market price is set where market demand equals market supply (Qd = Qs). If demand rises, price and quantity both rise; if supply rises, price falls and quantity rises.
- Demand and Price Elasticity of Demand – Demand is the quantity of a good buyers are willing and able to buy at each price in a period. Market demand adds up all buyers' demand at each price. Demand depends on own price, income, prices of related goods, tastes, expectations and number of buyers. A change in own price moves us along the curve; a change in any other factor shifts it. Price elasticity of demand (Ed) = % change in quantity ÷ % change in price; it can also be judged from total expenditure.
- Factor Markets: How Firms Hire Land, Labour and Capital – Factor markets are where firms buy the inputs they need: land (paid rent), labour (paid wages), capital (paid interest) and enterprise (earning profit). Demand for a factor is derived from demand for the product it makes. A profit-maximising firm hires a factor up to the point where its marginal revenue product (MRP = MP × MR) equals its marginal resource cost (MRC). In a perfectly competitive factor market MRC is the market wage; a monopsony (single buyer) faces MRC above the wage, so it hires fewer workers and pays less.
- Income Inequality – Income inequality means income is shared unevenly between people. Economists rank people from poorest to richest, split them into five groups of 20% (quintiles) and compare their shares. The Lorenz curve plots the cumulative share of income against the cumulative share of people; the further it bends from the straight line of equality, the more unequal the society. The Gini coefficient = A ÷ (A + B) turns this into one number between 0 (perfect equality) and 1 (one person has everything). Wealth (what you own) is usually more unequal than income (what you earn). Causes include differences in skills, education, inherited wealth, discrimination and technology. Governments reduce inequality with progressive taxes, benefits, minimum wages and public services such as free schooling and health care.
- The Financial Sector: Banks, Insurers and Markets – The financial sector is all the firms that deal with money: banks, building societies and credit unions, insurance companies, and financial markets such as the stock market and bond market. Its main job is to link savers, who have spare money, with borrowers, who need money. Banks take deposits, pay interest and lend at a higher interest rate. Insurers collect small premiums from many people and pay out to the few who suffer a loss, so risk is shared. Financial markets let firms and governments raise money by selling shares and bonds, and let investors buy and sell them. The sector also runs payments (cards, transfers, UPI) and currency exchange. It matters because it turns savings into investment that builds factories, homes and jobs. When it fails, as in the 2008 crisis, the whole economy suffers.