Economic Methodology and the Economic Problem

Economic Methodology and the Economic Problem

Learning Objectives

• At the end of the lesson, you will understand the fundamental economic problem of scarcity and resource allocation. 
• you will be able to describe how the price mechanism works in a competitive market. 
• you will comprehend the laws of demand and supply and their role in the price mechanism.

What do you already know about the economic problem of scarcity and resource allocation?

The Basic Economic Problem

Students will explore the core economic issue of scarcity and how it necessitates the allocation of resources in an economy.

Resource Allocation

The process by which the scarce resources are distributed among producers, and by which goods and services are distributed among the consumers.

Price Determination in a Competitive Market

The focus will shift to the price mechanism in a competitive market, anchored by the laws of demand and supply that govern it.

The Functioning of the Price Mechanism

Price mechanism: The system by which the forces of demand and supply determine the prices of goods and services and allocate resources in an economy.

The Laws of Demand and Supply

Demand: The quantity of a good or service that consumers are willing and able to purchase at various prices during a certain period of time. Supply: The quantity of a good or service that producers are willing and able to offer for sale at various prices during a certain period of time.

Write down 3 things you learned in this lesson.

Have students enter three things they learned in this lesson. With this they can indicate their own learning efficiency of this lesson.

Write down 2 things you want to know more about.

Here, students enter two things they would like to know more about. This not only increases involvement, but also gives them more ownership.

Ask 1 question about something you haven't quite understood yet.

The students indicate here (in question form) with which part of the material they still have difficulty. For the teacher, this not only provides insight into the extent to which the students understand/master the material, but also a good starting point for the next lesson.