HLC-ECONOMICS-SECOND TERM-2025_2026

ECONOMICS FOR YEAR 11 SECOND TERM 2024/2025 ACADEMIC SESSION

TABLE OF CONTENT

• 1. PRODUCTION POSSIBILITY CURVE (Pages 2-6)
  • Meaning of production possibility curve
  • Graphical illustration of PPC
  • Laws of variable proportion
  • Concept of Total, Average and Marginal Productivity
• 2. COST CONCEPTS (Pages 7-10)
  • Meaning of cost to an accountant and economists
  • Meaning of cost of production
  • Types of costs
  • Short-run and long-run costs
• 3. REVENUE CONCEPTS (Pages 10-12)
  • Meaning of revenue to an economist
  • Types of revenue ( TR, AR and MR)
  • Graphical illustration
• 4. ECONOMIC SYSTEMS (Pages 13-17)
  • Meaning of economic systems
  • Types of economic systems
  • Features of each, advantages and disadvantages
• 5. LABOUR MARKET (Pages 18-21)
  • Meaning of labour market
  • Concept of labour force
  • Factors affecting the size of labour force
  • Efficiency of labour
  • Mobility of labour (meaning, types and importance)
• 6. SUPPLY AND DEMAND FOR LABOUR (Pages 21-27)
  • Meaning of supply and demand for labour
  • Wage determination
  • Unemployment (meaning, types and trade union)
• 7. OPEN DAY AND MID-TERM BREAK
• 8. MARKET STRUCTURE (Pages 28-29)
  • Perfect market (meaning, types)
• 9. IMPERFECT MARKET (Pages 29-38)
  • Meaning, types with graphic illustration
  • Price determination
  • Equilibrium position
  • Short run and long run
• 10. INDUSTRIES IN NIGERIA (Pages 39-41)
  • Meaning of plant, firm, industry, factory, and industrial estate
  • Types of industries
  • Strategies for industrialization
  • Link between agricultural and industrial development
• 11. LOCATION AND LOCALIZATION OF INDUSTRY (Pages 42-47)
  • Meaning
  • Factors affecting the location of industry
  • Advantages and disadvantages

WEEK 1: PRODUCTION POSSIBILITY CURVE

LESSON OBJECTIVE

• At the end of the lesson, students should be able to:
• Describe the concept of PPC with graphical illustration
• State the law of variable proportion
• Distinguish between the concept of TP, AP, and MP

REFRENCE

• Essential Economics for Senior Secondary Schools, by C. E. Ande; Tonad Publishers Limited; Sixth Edition (June, 2020);

PRODUCTION POSSIBILITY CURVE

• The production possibility curve (PPC), also known as the production possibility frontier (PPF), is a graphical representation of the maximum amount of two different goods or services that can be produced by an economy, assuming all resources are fully utilized, and the technology used for production remains constant.

• The PPC is a visual representation of the opportunity costs that an economy must make when deciding how to allocate its scarce resources between different production possibilities.

• The curve shows the different combinations of two goods that can be produced with a given set of resources and technology.

• The PPC is a curved line that slopes downward from left to right, reflecting the concept of increasing opportunity costs.

• This means that to produce more of one good, an economy must sacrifice the production of some amount of the other good.

• Slope interpretation:

  • The slope of the curve represents the rate at which one good must be sacrificed for an additional unit of the other good.

• Inefficient Resource Utilization:

  • Points inside the PPC represent inefficient use of resources, as the economy is not fully utilizing its resources to produce as much as it can.

• Unattainable Production Levels:

  • Points outside the PPC are unattainable with the given resources and technology, as the economy lacks the necessary resources to produce at those levels.

• Efficiency Analysis:

  • The PPC is a useful tool for analyzing an economy’s production efficiency, identifying potential for economic growth, and making decisions about resource allocation.

THE LAW OF VARIABLE PROPORTIONS

• The law of variable proportions is also known as the law of diminishing returns and it states that as you increase the amount of one input while keeping all other inputs constant, the output will eventually increase at a decreasing rate.

• Example:

  • Consider a factory that produces flashlights; if the machinery and workers are fixed, increasing the number of workers will initially increase flashlight production. However, after a certain point, adding more workers will yield a smaller increase in output due to limited machinery capacity.

CONCEPTS OF TOTAL, AVERAGE AND MARGINAL PRODUCTS

1. TOTAL PRODUCTIVITY (TP):

   • Refers to the overall quantity of a commodity derived from a given quantity of productive resources.

2. AVERAGE PRODUCTIVITY/OUTPUT (AP):

   • Output per unit of the variable factor employed.
   • Mathematically represented as:
     ext{Average Output} = rac{ ext{Total Product}}{ ext{variable factor (number of men)}}

3. MARGINAL PRODUCTIVITY (MP):

   • Addition to total product brought about by the employment of an additional unit of the variable factor.
   • Mathematically represented as:
     ext{M.P.} = rac{ ext{Change in TP}}{ ext{Change in Variable factor}}

TABLE FOR TOTAL, AVERAGE AND MARGINAL PRODUCTIVITY

• Productivity Explanation:
  • The table above illustrates how Total Product (TP), Average Product (AP), and Marginal Product (MP) change with varying levels of the variable factor.
  • For instance, at a variable factor of 6 workers, TP is 90, leading to AP of 15 (since rac{90}{6}).
  • MP can be calculated as:
    ext{MP} = rac{(85-72)}{(5-4)} = 13

RELATIONSHIP BETWEEN TOTAL, AVERAGE AND MARGINAL PRODUCTS

• The relationship can be demonstrated graphically, showing that initially, both TP and AP increase.
• As MP reaches zero, TP peaks and then begins to decline, indicating diminishing returns after maxing out productivity.

WEEK 2: COST CONCEPTS

LESSON OBJECTIVE

• At the end of the lesson, students should be able to:
• Evaluate the accountants and economist’s view of cost
• State and explain the types of cost with a diagram and illustration
• Differentiate between short run and long run costs

REFERENCE

• Essential Economics for Senior Secondary Schools, by C. E. Ande; Tonad Publishers Limited; Sixth Edition (June, 2020);

BASIC COST CONCEPTS

• Cost can be defined as the prices that a producer pays for the factors of production used in the process of producing goods and services.

TYPES OF COSTS

1. Fixed Cost (FC):

   • A cost which remains the same regardless of the level of output produced.
   • Examples include costs of machinery, vehicles, and land.
   • Mathematically represented as:
     ext{FC} = ext{Total Cost} - ext{Variable Cost}

2. Variable Cost (VC):

   • A cost that changes as output changes.
   • Also known as direct or prime costs, examples include raw materials and labor wages.
   • Represented as:
     ext{VC} = ext{TC} - ext{FC}

3. Total Cost (TC):

   • The minimum cost incurred to produce a certain quantity of a commodity, calculated as:
     ext{Total Cost} = ext{Fixed Cost} + ext{Variable Cost}

4. Average Fixed Cost (AFC):

   • Fixed Cost per unit of output.

5. Average Variable Cost (AVC):

   • Variable Cost per unit of output.

6. Average Total Cost (ATC):

   • Total cost per unit of output.
   • Mathematically represented as:
     ext{ATC} = rac{ ext{Total Cost (TC)}}{ ext{Total Output (tq)}} ext{ or } ext{ATC} = ext{AFC} + ext{AVC}

7. Marginal Cost (MC):

   • The change in total cost as a result of producing one additional unit of output.

SHORT-RUN AND LONG-RUN COSTS

• Short-run:
  • A period when one or more inputs are fixed in quantity.
• Long-run:
  • A period when all inputs can be varied freely.

ECONOMISTS' COST VS. ACCOUNTANTS' COST

• Economists' perspective involves opportunity cost, reflecting the value of forgone alternatives.
• In contrast, accountants focus on actual money spent.

EXPLICIT AND IMPLICIT COST

• Explicit cost:
  • Cash expenditures on production resources like salaries and materials.
• Implicit cost:
  • Costs for self-owned resources utilized in production, e.g., owner’s time and capital.

WEEK 3: REVENUE CONCEPT

LESSON OBJECTIVE

• At the end of the lesson, students should be able to:

1. Relate the meaning of cost according to economists to the meaning of revenue
2. State the formula for calculating various revenue concepts
3. Calculate revenue using graphs, schedules, and curves

REFERENCE

• Essential Economics for Senior Secondary Schools, by C. E. Ande; Tonad Publishers Limited; Sixth Edition (June, 2020);

REVENUE CONCEPTS

• Revenue refers to the money income a firm earns from selling its goods and services, calculated as price multiplied by quantity sold.

TYPES OF REVENUE

1. Total Revenue (TR):

   • Total income derived from the sale of products.
   • Formula:
     ext{Total Revenue} = ext{Price} imes ext{Quantity} ext{ (TR = P x Q)}

2. Average Revenue (AR):

   • Same as the price per unit of the commodity.
   • Mathematically represented as:
     ext{AR} = rac{ ext{TR}}{ ext{Total Units Sold}}

REVENUE SCHEDULE OF A FIRM