A new academic year starts
Welcome to the juniors, who are starting on their IB/AP economics courses, and welcome back to the seniors, who now have less than a year to go (only nine months!) until their economics courses are completed.
I hope that you will find the material here useful. But remember that your most useful resource is an awareness of and an interest in events happening in the world around you that have relevance for a study of economics.
For example, I am interested that PM Theresa May of the UK is visiting Japan for the first time this week. Apparently, the Japanese government and firms are very concerned about future economic relations between the UK and the EU after “Brexit”. Many Japanese firms (including, for example, Nissan and Panasonic) have invested in the UK (Foreign Direct Investment or FDI) by building factories. They have then exported their goods to the rest of Europe. They want clarification that the business environment, and in particular tariffs etc, will not change after Brexit. But I fear that they will be disappointed.
The topic of SAND came up with the juniors last week. They seemed doubtful that it was an economic good, even in Tokyo. (We all agreed that it was a free good with zero opportunity cost in the Sahara desert.) I have found out a little more about sand (source below). Apparently, it has many uses. We need sand for our water filtration and septic systems. A typical house has more than 100 tons of sand in its foundation, driveway, and windowpanes. And road-building needs even larger amounts. Singapore is the world’s highest per person user of sand at 5.4 tons per inhabitant (UN 2014).
In fact the world requires so much sand that the UN says we might not have enough. However, as the juniors move into studying markets they will learn that when there is not enough supply, the price goes up which leads to innovation. Engineers–perhaps those from Singapore– will be incentivised to find more efficient production methods and/or substitutes.