1. 10 February – IB Economics Market failure practice question – Open book/notes – P. 154, Paper 1, essay questions (a and b) – Peer assess next time (Teacher can also assess) Start Unit 4. Measurement of Economic Progress – 2.1 Level of Economic Activity Externalities news article due tomorrow Practice exam on 26 February (Day 6) – Notecards OK Portfolio check on 27 February (Day 7)

2. Examining Real World Examples of Externalities 1.Choose an article on externalities. 2.Read the article. 3.Use diagrams to analyze the externality. 4.Referring to the diagram, explain the current situation and what the proposed remedy is. If there is no remedy mentioned in the article, please propose your own. (There is no word limit, but you needn't write a long explanation.) 5.Submit both a copy of the article and your diagrams/explanations.

3. Syllabus Item 78 Describe, using a diagram, the circular flow of income between households and firms in a closed economy with no government. Describe, using a diagram, the circular flow of income in an open economy with government and financial markets, referring to leakages/ withdrawals (savings, taxes and import expenditure) and injections (investment, government expenditure and export revenue).

4. Possible ways to show circular flow of income “The circular flow of income is a neoclassical economic model depicting how money flows through the economy.” Source: http://www.investopedia.com/terms/circular- flow-of-income.asp http://www.investopedia.com/terms/circular- flow-of-income.asp

5. Source: http://www.dineshbakshi.com/images/economics_diagrams/circular-flow-of- income-2.jpghttp://www.dineshbakshi.com/images/economics_diagrams/circular-flow-of- income-2.jpg

6. Source: http://2.bp.blogspot.com/_-LUlXoF3oOY/S- JxzXg8zNI/AAAAAAAAAGg/DOutaYPIv5A/s1600/CirFlow.jpghttp://2.bp.blogspot.com/_-LUlXoF3oOY/S- JxzXg8zNI/AAAAAAAAAGg/DOutaYPIv5A/s1600/CirFlow.jpg

7. Source: http://thepeaktimes.files.wordpress.com/2013/03/circular-flow-of-income.pnghttp://thepeaktimes.files.wordpress.com/2013/03/circular-flow-of-income.png

8. Circular Flow of Income – Closed Economy Create a circular flow of income without leakages and injections. What doesn’t a closed economy include?

9. Business basics: Declan Curry explains what GDP is http://news.bbc.co.uk/2/hi/business/8637712.s tm

10. Which of the four flows would not be used to calculate GDP?

11. Syllabus http://ibeconomics-isd.weebly.com/