MYP Individuals & Societies Topic Economic Drivers…

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MYP Individuals & Societies Topic Economic Drivers… | RevisionDojo

How Does Scarcity Create the Need for Allocation Choices?

Definition

Scarcity

The idea that available resources (land, labour, capital, entrepreneurship) are limited and unable to satisfy unlimited human needs and wants.

Economies exist because scarcity forces societies to make choices.
Since resources are limited, every society must decide what to produce, how to produce, and for whom to produce.
The forces that push these decisions in one direction or another are called economic drivers.
Key drivers highlighted in IB Individuals and Societies include:
1. Factors of production
2. Markets and the price mechanism
3. Incentives (profit and wages)
4. Government intervention, especially in the context of development.

Because of scarcity, producing more of one good usually means producing less of another (an opportunity cost).
This is why "economic drivers" matter: they explain why certain goods and services end up being produced, where production happens, and who benefits.
A useful way to frame allocation is the three core questions:
1. What to produce?
  1. Deciding between goods like food, phones, schools, hospitals, weapons, and public transport.
2. How to produce?
  1. Choosing between labour-intensive or capital-intensive methods, or clean or polluting technology.
3. For whom to produce?
  1. Determining which groups can access the output, and at what price.

Analogy

Think of the economy as a kitchen with limited ingredients.
Scarcity is the limited food in the fridge, allocation is deciding which meals to cook, and economic drivers are the preferences, costs, and rules that determine what ends up on the menu.

How Do The Factors of Production Drive What an Economy Can Make?

Definition

Factors of production

All resources or inputs used to produce goods and services.

Resources are commonly grouped into four factors of production, which strongly shape a country's production possibilities.

Definition

Land

All natural resources on Earth, including farmland and non-farmland. All the natural resources found below and above the ground.

Definition

Labour

All the physical work and mental skills that humans put into the production of goods and services.

Definition

Capital

Human-made factors of production used to produce goods and services.

Definition

Entrepreneurship

The unique human skills held by some individuals, including the ability to innovate, take business risks, and pursue new opportunities for running a business.

These factors are not just "inputs"; they are economic drivers because changes in any one of them can shift what gets produced.
1. More skilled labour can drive growth in services like IT, engineering, and healthcare.
2. More capital (machines, infrastructure) can drive mass production and higher output per worker.
3. Abundant land (e.g., fertile soils or oil reserves) can drive agriculture or energy exports.
4. Strong entrepreneurship can drive innovation, competition, and new markets.

Note

In MYP-style explanations, it is often helpful to distinguish between "having resources" (potential) and "being able to use them well" (productivity).
Many development strategies focus on improving the productivity of labour and capital.

How Do Markets Use the Price Mechanism to Coordinate Decisions?

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Definition

Paywall

(on a website) an arrangement whereby access is restricted to users who have paid to subscribe to the site.

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Note

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MYP Individuals & Societies Economic Drivers Notes

How Does Scarcity Create the Need for Allocation Choices?

How Do The Factors of Production Drive What an Economy Can Make?

How Do Markets Use the Price Mechanism to Coordinate Decisions?

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How Does Scarcity Create the Need for Allocation Choices?

How Do The Factors of Production Drive What an Economy Can Make?

How Do Markets Use the Price Mechanism to Coordinate Decisions?

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Social Groups and Human Interaction4 subtopics

Origins of Empires4 subtopics

Structures and Functions of Empires5 subtopics

Decline and Collapse of Empires4 subtopics

Human Impacts on Natural Environments4 subtopics

Population Change and Social Effects6 subtopics

Urban Systems and Sustainable Management4 subtopics

Economic Decision-Making and Production6 subtopics

Trade, Fairness and Global Exchange4 subtopics

Development and Standards of Living4 subtopics

Sustainable Use of Earth’s Resources4 subtopics

Historical Perspectives and Changing Worldviews3 subtopics

MYP Individuals & Societies Economic Drivers Notes

Social Groups and Human Interaction4 subtopics

Origins of Empires4 subtopics

Structures and Functions of Empires5 subtopics

Decline and Collapse of Empires4 subtopics

Human Impacts on Natural Environments4 subtopics

Population Change and Social Effects6 subtopics

Urban Systems and Sustainable Management4 subtopics

Economic Decision-Making and Production6 subtopics

Trade, Fairness and Global Exchange4 subtopics

Development and Standards of Living4 subtopics

Sustainable Use of Earth’s Resources4 subtopics

Historical Perspectives and Changing Worldviews3 subtopics

How Does Scarcity Create the Need for Allocation Choices?

How Do The Factors of Production Drive What an Economy Can Make?

How Do Markets Use the Price Mechanism to Coordinate Decisions?

anim nostrud sit dolore minim proident quis fugiat velit et eiusmod nulla quis nulla mollit dolor sunt culpa aliqua

Duis aute irure dolor in reprehenderit

Excepteur sint occaecat cupidatat non proident

Unlock the rest of this chapter with a free account

How Does Scarcity Create the Need for Allocation Choices?

How Do The Factors of Production Drive What an Economy Can Make?

How Do Markets Use the Price Mechanism to Coordinate Decisions?

anim nostrud sit dolore minim proident quis fugiat velit et eiusmod nulla quis nulla mollit dolor sunt culpa aliqua

Duis aute irure dolor in reprehenderit

Excepteur sint occaecat cupidatat non proident

Unlock the rest of this chapter with a free account