Monday, April 21, 2008
CHECKLIST on CRITICAL ‘A” Level Examination Skills :
- Candidates must have KNOWLEDGE & UNDERSTANDING of Economics at H2 level
Candidates must demonstrate greater depth of ANALYSIS and EVALUATION - Ability for INDEPENDENT LEARNING
Develop HIGHER ORDER THINKING and REASONING SKILLS with particular emphasis on CRITICAL THINKING - Demonstrate an ability to exercise independent JUDGEMENT and to carry out independent assessments
Implies a need for candidates to develop an ability to think for themselves and to work things out for themselves.
Not sufficient simply to recall what one has been taught or even what one has learnt
Implication for assessment of Paper 1 – CASE STUDY:
To assess candidates’ ability to work things out for themselves they will need to be:
Presented with at least some material with which they will not be familiar
Confronted with certain issues situations which they are unlikely to have encountered previously
CRITICAL THINKING for Better Grade
Emphasis on CRITICAL ANALYSIS, ASSESSMENT & EVALUATION in addition to
· “an UNDERSTANDING of fundamental economic principles, theories and concepts and of the methods of analysis used by an economist.”
[Aim of H2 syllabus – you need to be very familiar with the FUNDAMENTAL ECONOMICS THEORIES of H2 syllabus - outlined below for your ease of reference ]
Implications of adopting a CRITICAL APPROACH
Questions that encourage CRITICAL THINKING:
· What are the strengths and weaknesses of arguments/theories/explanations ?
· Are they logically sound and coherent ?
· How realistic are the initial/underlying assumptions/premises ?
· What evidence is there to support any conclusions/recommendations?
· How reliable/relevant is this evidence ?
· How convincing/plausible/robust are the conclusions /
· Are there alternative theories/explanations ?
· How objective are those promoting a particular line of argument/policy recommendation ?
· What are the advantages and disadvantages of particular policies ? (Need to present Balanced view)
· What is the magnitude of these advantages/disadvantages and to whom do they accrue ?
· How convincing are the arguments/evidence supporting the alleged advantages/disadvantages ?
· What criterion (eg goals of government: GEES – GROWTH, EFFICIENCY, EQUITY, STABILITY) is being/should be used to weigh up the respective advantages and disadvantages accruing to different groups ?
Challenging & Higher Order part of the question is designed to :
Presents candidates with a formidable challenge and an opportunity to demonstrate their ability to apply their knowledge of economic principles to a specific issue which they are unlikely to have encountered previously in the course of their studies.
Requires candidates to work out for themselves how the question should be answered. (Contrast this with the practice of reproducing answers prepared in advance – so use the model answers from published materials with care – these answers are only good for that specific question. You should put on your THINKING CAP when answering the exam questions).
Requires candidates to identify what are the relevant economic concepts and theories underlying the question. (Contrast with a standard lower order thinking question which asks candidates to explain a given theory and to illustrate how it might be applied to a particular issue or problem).
Requires candidates to apply critical thinking to a real world issue.
Provides candidates with an opportunity to demonstrate the INTER-CONNECTEDNESS between a wide range of different economic concepts and theories.
What are Economics Exams about ?
What exams try to test & how you should approach them ?
Majority of queries relate to understanding the needs of the questions and what to include and not include in answers.
§ What are the problems ?
Many of the mistakes relate not to the knowledge that students have, but to the way in which this knowledge needs to be used to address certain questions.
For “Advanced” Level Economics – Any notions that all you need is to memorise a body of knowledge in order to be OK needs to be banished at an early stage.
§ What is required of you ?
The examination paper is trying to provide you with the opportunity to demonstrate the range of skills you have developed.
These skills include knowledge of Economics Theories. But to get the higher grades at A Level, you will need to demonstrate that not only can you understand this knowledge, but you can also apply it in a variety of different contexts.
You must also need to show that you can break an issue down into smaller parts in order to analyse what is happening and to make some judgements on the issues you are dealing with.
The 4 Assessment Objectives
Knowledge & Understanding
In Economics, you will have to build up a lot of knowledge about the subject eg supply, demand, elasticity, consumer surplus, macroeconomic objectives, the Phillips Curve etc.
Selecting Knowledge
In examinations, you will be asked to apply the knowledge you have built up to a wide range of different contexts. These might range from congestion charging in London to the action taken against a business by the Environment Agency or policies made by the US government to promote the use of ethanol-powered cars.
In each case there is a different scenario but the knowledge you need to use stays the same. In this example it involves the use of the concept of externalities and market failure.
You are not expected to be an expert in any of these fields but you should be able to recognise the basic economic principles involved in each case and thus offer some development of the issue.
Developing Application Skills
It pays to keep abreast of key news items, as they are often used in exam questions.
Try to watch the news at least once a day or scan through the headlines of the newspapers. As you read, try to make some links to how these issues might relate to Economics.
Higher Order Skills
Analysis
Analysis means breaking down a topic or issue into smaller, more manageable parts to help us understand or explain what is happening.
Critical Thinking
This means basically, do not believe everything you hear or read. Be prepared to ask questions. In exams you will often read articles or be presented with evidence to consider that contain many opinions and views about an issue. Be prepared to try and recognise normative statements when you see them and question their validity.
With the example of externalities, you might be expected to analyse the issue of the London congestion charge. You might have to break it down to explain what the congestion charge consists of, what the effects of the congestion charge have been on different stakeholders and what the consequences might be on individual road users, the city of London as a whole, public transport and local businesses.
In other words, you are making a quite complicated issue more understandable. You will never be able to cover every aspect of a topic in the time you have but you should aim to identify the key characteristics, reasons and consequences of an issue.
In terms of critical thinking, if you read an article about a local business complaining that the congestion charge has cut its business by 45%, think whether this is likely to be typical of all businesses. Where is this business situated ? Does that make a difference ? What evidence is this person presenting to support their claim ? Forty-five per cent sounds a lot, but 45% of what ? Is this percentage of their turnover, profit, sales or passing trade ?
Making a judgement : Evaluation or Assessment
This skill is considered higher order because it is personal and because it necessitates your drawing together a range of information and ideas to arrive at informed conclusions. In other words, you are being asked to make judgements about issues.
In economics this is often made all the harder because there is rarely a right answer to anything. This may seem obvious but it is very important. Your view – provided it has some evidence to support it – is no less valid than that of the chancellor of the exchequer’s; it is just that he may be able to bring more evidence and detail to a discussion.
What the examiners are looking for is some evidence of independent, supported, creative thinking on your part and that does not come easily.
You can build this skill through debate and discussion but be prepared to listen to other views, think about them and consider them in the light of what you already know and think. You will be expressing a personal judgement and even though the examiner may not agree with your choice, that is not an issue. The examiner will be interested in trying to see what support you give for your choice.
Assessing & Evaluating in examinations
In examination questions, you will be asked to assess important issues. It might be that you have to assess the role of aid in relieving poverty or the efficacy of tradable permits in reducing pollution; you may have to evaluate the strength of the case for the Monetary Policy Committee (MPC) increasing interest rates etc.
In each case, if you have done the other parts well, the evaluation becomes easier as you will have the basis for arriving at your judgement. If you have identified that aid, for example, has tended to relieve immediate problems of hunger in 4 out of 5 cases you have referred to, but that the overall levels of absolute poverty have not changed in the last 25 years, then you might be in a very good position to conclude that aid is not the best solution to poverty in less economically developed countries.
“It depends”
With this last skill, therefore, it is important to be bold and brave and to keep at the back of your mind all the time the idea that your opinion is valid. It also helps to use what I refer to as the “it depends” rule. If you are asked about whether, given the data, a rise in interest rates is justified, you might want to ask what it depends on. It depends on how big the rise in the interest rate might be – a quarter point rise in the interest rate might send out the right signals but a 1% rise might be too heavy-handed and cause too much disruption to manufacturing or retail spending. It depends on how strong the indicators are of a possible rise in inflation. It depends on what the perceived effects might be on other parts of the economy and so on.
Remember that even the UK Monetary Policy Committee (MPC) has to make a judgement every month when it make its decision about interest rates. It has knowledge of the economy; it has to apply that knowledge, analyse the economy and make its judgement about the direction of rates. Many people might not agree with its analysis or judgement but that does not deter it from arriving at its decision.
Summary
Having gone through this process, it would be worth looking at a past examination question and trying to identify what knowledge you would use in answering it, how you would apply that knowledge to the context, what the key points in your analysis would be and how you might arrive at an evaluation. Such exercises are invariably more useful in honing and developing your skills than shutting yourself in your bedroom, reading your lecture notes over and over again.
By Andrew Ashwin
Extract from Economic Review Vol 23 Feb 2006
Please take note of the thinking skills which the H2 Economics syllabus 9732 aims to test as specified below:
Syllabus 9732 (H2 Economics)
AIMS
The syllabus is intended to provide the basis for a broad understanding of Economic. Specifically, the syllabus aims to develop in candidates:
1 an understanding of fundamental economic principles, theories and concepts, and of the methods of analysis used by an economist;
2 the ability to use the tools of economic reasoning to explain, analyse and resolve economic issues, and evaluate policy decisions;
3 the habit of reading critically, from a variety of sources, to gain information about the changing economic activities and policies at the national & international levels;
4 the ability to use evidence in making rational arguments in economic context and understand the roles of various economic agents.
ASSESSMENT OBJECTIVES
Candidates are expected to demonstrate:
Understanding of
1 the main concepts, principles and theories employed within the field of economics
2 methods of analysis in economics
Ability to
3 understand and interpret economic information presented in textual, numerical or graphical form
4 select and apply economic concepts and principles to explain and analyse contemporary events at the micro and macro levels
5 recognise unstated assumptions
6 Make interpretations and valid inferences from information presented and evaluate the reliability of information given.
7 Evaluate alternative theoretical explanations and perspectives of economic problems, issues and policy decisions
8 Organise and communicate economic ideas and arguments in a clear, logical and appropriate form
Saturday, April 12, 2008
In this video clip, Milton Friedman sets out to explain the power of the free market, as a superior way to central planning in allocating scarce resources to unlimited wants.
He uses the example of a pencil and how simple profit maximization has led to co-operation among people living around the world.
To me, many of the critics of the free market could actually benefit from viewing this video. Many of such critics only want to latch on the usual arguments that the free market does not ensure income equality.
They often forget that it is precisely because of the free market that everyone can purchase their goods at the lowest possible price. That itself is valuable even if you are a philantropist. For example, even if you are Mother Theresa, and you want to help the poor by donating blankets to them, using the free market would ensure that you are able to purchase the blankets at the lowest possible cost, allowing more of the poor to benefit from your deed.
In the following article from the New York Times, Paul Krugman attempts to explain some of the reasons why grain prices have increased recently.
As an economist, Paul Krugman is using the demand and supply model, which is the standard model for explaining price changes. Some of these reasons include
1) Derived demand: Demand for meat, a normal good, is growing as the income of the Chinese population is increasing. As it takes a huge amount of grain to feed animals to a certain weight before slaughtering them for the meat, an increase in the demand for meat leads to an increase in the demand for wheat as well.
2) Increase in cost of production: Oil prices are going up and since modern agricultural production requires the use of heavy machinery, this will decrease the supply of grains.
3) Climatic changes in Australia also lead to a decrease in the supply of grain production.
To me, I felt really enlightened by the first reason. It never occured to me that demand for meat has such an impact on the grain market. Some people might confused this with the term "externality", in the sense of arguing that the emergence of more meat eaters cause an externality to the vegetarians as it cause grain price to increase.
But in this case, it is not a true externality, as all these actions occur within the context of the market system. This will be called as a pecuniary externality.
=============
April 7, 2008
Op-Ed Columnist
Grains Gone Wild
By PAUL KRUGMAN
These days you hear a lot about the world financial crisis. But there’s another world crisis under way — and it’s hurting a lot more people.
I’m talking about the food crisis. Over the past few years the prices of wheat, corn, rice and other basic foodstuffs have doubled or tripled, with much of the increase taking place just in the last few months. High food prices dismay even relatively well-off Americans — but they’re truly devastating in poor countries, where food often accounts for more than half a family’s spending.
There have already been food riots around the world. Food-supplying countries, from Ukraine to Argentina, have been limiting exports in an attempt to protect domestic consumers, leading to angry protests from farmers — and making things even worse in countries that need to import food.
How did this happen? The answer is a combination of long-term trends, bad luck — and bad policy.
Let’s start with the things that aren’t anyone’s fault.
First, there’s the march of the meat-eating Chinese — that is, the growing number of people in emerging economies who are, for the first time, rich enough to start eating like Westerners. Since it takes about 700 calories’ worth of animal feed to produce a 100-calorie piece of beef, this change in diet increases the overall demand for grains.
Second, there’s the price of oil. Modern farming is highly energy-intensive: a lot of B.T.U.’s go into producing fertilizer, running tractors and, not least, transporting farm products to consumers. With oil persistently above $100 per barrel, energy costs have become a major factor driving up agricultural costs.
High oil prices, by the way, also have a lot to do with the growth of China and other emerging economies. Directly and indirectly, these rising economic powers are competing with the rest of us for scarce resources, including oil and farmland, driving up prices for raw materials of all sorts.
Third, there has been a run of bad weather in key growing areas. In particular, Australia, normally the world’s second-largest wheat exporter, has been suffering from an epic drought.
O.K., I said that these factors behind the food crisis aren’t anyone’s fault, but that’s not quite true. The rise of China and other emerging economies is the main force driving oil prices, but the invasion of Iraq — which proponents promised would lead to cheap oil — has also reduced oil supplies below what they would have been otherwise.
And bad weather, especially the Australian drought, is probably related to climate change. So politicians and governments that have stood in the way of action on greenhouse gases bear some responsibility for food shortages.
Where the effects of bad policy are clearest, however, is in the rise of demon ethanol and other biofuels.
The subsidized conversion of crops into fuel was supposed to promote energy independence and help limit global warming. But this promise was, as Time magazine bluntly put it, a “scam.”
This is especially true of corn ethanol: even on optimistic estimates, producing a gallon of ethanol from corn uses most of the energy the gallon contains. But it turns out that even seemingly “good” biofuel policies, like Brazil’s use of ethanol from sugar cane, accelerate the pace of climate change by promoting deforestation.
And meanwhile, land used to grow biofuel feedstock is land not available to grow food, so subsidies to biofuels are a major factor in the food crisis. You might put it this way: people are starving in Africa so that American politicians can court votes in farm states.
Oh, and in case you’re wondering: all the remaining presidential contenders are terrible on this issue.
One more thing: one reason the food crisis has gotten so severe, so fast, is that major players in the grain market grew complacent.
Governments and private grain dealers used to hold large inventories in normal times, just in case a bad harvest created a sudden shortage. Over the years, however, these precautionary inventories were allowed to shrink, mainly because everyone came to believe that countries suffering crop failures could always import the food they needed.
This left the world food balance highly vulnerable to a crisis affecting many countries at once — in much the same way that the marketing of complex financial securities, which was supposed to diversify away risk, left world financial markets highly vulnerable to a systemwide shock.
What should be done? The most immediate need is more aid to people in distress: the U.N.’s World Food Program put out a desperate appeal for more funds.
We also need a pushback against biofuels, which turn out to have been a terrible mistake.
But it’s not clear how much can be done. Cheap food, like cheap oil, may be a thing of the past.
Welcome to the HCI economics blog for year 2 economic students! Here is an opportunity for you guys and girls to earn GNA points for your faculty, by posting stuff related to economics.
To further define what we meant by the term "economic stuff", what you can do is any of the following
Review of interesting economic articles from journals or Internet.
Economic jokes/cartoons that illustrate certain economic concepts.
Video clips depicting certain economic concepts.
Q & A’s, “forum-like” postings on views and comments that are economics related.
I will be posting a few examples of what we, the economic teachers, are looking for in the later entries. We are basically looking for quality and not quantity. Your review should show clearly the economic perspective and some reflection on how it has enhanced your learning.
You will be able to earn anywhere from 0 to 100 Gna points for each posting.
So if anyone of you is interested to earn GNA points, please send an email to tantw at hc.edu.sg (replace at with @ and remove all the spacing), and you will receive an invitation to enable you to post in this blog. Have fun!
Regards,
Mr Kelvin Tan
