Thursday, November 30, 2006

Unit 2: Market dominance and Government action: Fines in the rubber industry

A brief article in the Guardian illustrating action the European Community will take if they believe firms are colluding to abuse their market power,,1959891,00.html

...and a link to more on this on Geoff Riley's blog where there is more on the context of the decision

Wednesday, November 29, 2006

Unit 2: Social costs and social benefits: Donald Trump and golf course developments

Here are 2 stories from the Guardian about the American developer Donald Trump's plan for a golf development in Scotland. Read both articles and then

a) Identify private costs associated with the project
b) Identify external costs associated with the project
c) Identify private benefits associated with the project
d) Identify external benefits associated with the project
e) How might decision makers use cost-benefit analysis to help decide whether this proposed project be allowed to go ahead,,1957686,00.html,,1959410,00.html

Unit 3: Exchange rates and the Balance of Payments: The decline in the value of the dollar

Here's an article from the Guardian and a BBC news clip from Evan Davies explaining the impact of the decline in the value of the dollar

a) If the dollar is falling, what is happening to the value of the pound?
b) What is the effect of this on UK import prices costed in dollars?
c) What is the effect of this on UK export prices to the USA?
d) What does economic theory tell us shoul happen to the current account of the Balance of Payments as a result?
e) Will this actually happen? It depends on which economic concept?,,1958016,00.html

<;bbram=1&bbwm=1&nbram=1&nbwm=1&nol_storyid=6190094 >

Anothe article describing the effects on the UK economy both positve and negative

Friday, November 24, 2006

Unit 1: The price of wine

This article explains the effect of the recent drought on the Australian wine market

a) Draw a D&S diagram to show the effect of this on the wine market
b) Describe what your diagram shows

Unit 1: Opportunity cost and the PPC: Drugs choices

This articl clearly shows the choices that have to be made by hospitals

a) Draw a PPC to show the choices faced by the doctors
b) What does the PPC show?
c) How does it illustrate the idea of opportunity cost?

Tuesday, November 21, 2006

Unit 2: Competition policy; control of monopoly

From Geoff Riley's blog comes this excellent presentation explaining the actions governments can take if they believe there to be a market failure through market dominance

It has many links in it which can illustrate numerous points of economic theory

Monday, November 20, 2006

Unit 2:Negative externalities and taxation of packaging

From Geoff Riley comes information on the idea of using taxation to discourage excess packaging.

a) In what way is excess packaging a negative externality?
b) Evaluate how successful you think a scheme such as this would be

Unit 1: Market structure: Games consoles

From Geoff Riley's blog comes this page with plenty of links so you can explore the market for games consoles

a) What type of market structure do you think the games console market is?
b) Are all the criteria of that market structure present? If not, TO WHAT EXTENT does any model explain the games console market?

Unit 1: Economies of scale: Pubs

What economies of scale might arise from increasing the size of your pub chain as in the article below?

Friday, November 17, 2006

Unit 2: Government response to demerit goods: Junk food advertising ban

Ofcom is planning to restrict the advertising of junk food

a)Who is the ban aimed at?
b) Why is junk food regarded as a demerit good in this case ? You need to cover both criteria
c) Why is the ban on advertising these products aimed at children and not total?

Here is the response of the manufactures

d) Evalute the validity of their response

Thursday, November 16, 2006

Unit 1: Economies of scale: Easyjet

This article says that easyjet plans to continue to expand and grow its fleet of aircraft

From the content of the article and your knowledge of the airline industry, suggest economies of scale the easyjet may gain from expansion. Will they get economies in the 5 catagories on the syllabus?

Unit 1: The demand for eggs

To what extent do you think this report will influence the demand for eggs in the UK?

Unit 1: Objectives of firms: Social entreprenneurs

This article highlights the fact that not all firms have the objective of maximising profits.

a) What are the objectives of these entreprenneurs?
b) What about profit? How does this fit into our syllbus content?

Geoff Riley adds some more detail to this story at

Wednesday, November 15, 2006

Unit 3: How good a measure of inlation is the CPI?

From Geoff Riley's blog comes this really useful article summarising how the CPI is created and its failings as a true measure of inflation

Tuesday, November 14, 2006

Unit 2: Private benefits and external costs from the Russian heavy metal industry

This article highlights the issue of private benefits and external costs

a) What is a private benefit?
b) What private benefits to the workers and people of the town are identified?
c) What is an external cost?
d) What examples of external costs are identified and in each case explain why are they an external cost

Monday, November 13, 2006

Unit 1: Opportunity cost and the PPC: Hong Kong harbour

Read the article about Hong Kong

a) Draw aPPC to show the 2 choices Hong Kong has
b)Show where Hong Kong was on the PPc 10 year ago, now and in the future
c) Explain the opportunity cost of the proposed development using your diagram,,1946219,00.html

Unit 1: Market structure; search engines

In May 2005, the global market share of total search was:

Google 51%
Yahoo 24%
MSN 13%
AOL 5%
Ask Jeeves 5%
Others 2%

a) How would you describe the market?
b) Using your knowledge of the firms and their products, give examples of the features of the market structure for these firms

Saturday, November 11, 2006

Unit 1: The demand for housing

Abbey have announced that they will provide a mortgage up to 5 times the applicants salary in some circumstances,,1937195,00.html

a) What will happen to the demand for houses as a result of this policy?
b) Why? Which factor that influences demand has altered?
c) Draw a diagram to show this change

Unit 1: Market structure; more on the broadband market

From my post the other day, the current broadband market is broken down as follows:

Market share June 2006
NTL 27% BT 24% AOL/Carphone Wharehouse 13% Tiscali 11% Wanadoo 9% All other providers 16%

Today comes news that Vodafone is to enter this crowded market,,1945365,00.html

a) Which market structure does the broadband market best represent?
b) What barriers to entry are there to the market?
c) How will Vodafone be able to overcome these barriers?
d) Evaluate the impact Vodafone's entry is likely to have on the market

Unit 1: Production Possibility Curves

This link will take you to the short run wbsite

Click on the PPC link for an excellent stage by stage explation of PPC's with moving images. A great revision aid

The supply and demand pwerpoints are much weaker and I would not bother with them......but you might think differently!

Thursday, November 09, 2006

Unit 1: The price of champagne

The most expensive champagne in the world!

a) How can Supply and Demand theory explain the price of this champagne?
b) What will happen if the manufacturers have got it all wrong and have set the price too high?

Unit 2: Alcohol and market failure

An outstanding powerpoint presentation from tutor2u on this topic

Unit 1: Substitutes, Elasicity of Supply and the aircraft industry

This article tells us that Fedex has swiched its order from Airbus to Boeing.

a) What does it tell us about the cross elasticity of demand for the 777 and A380?
B0 Given the delays in delivering the A380, what can you say about the pelaticity of supply for the aircraft?
c) Why might this be the case?

Unit1: Competition; Nike v Adidas

A news clip from the BBC highlighting the tactics used by these 2 trainer giants

a) What type of market structure is the trainer market?
b) How do their actions support your choice of market structure?;amp;bbram=1&bbwm=1&nbram=1&nbwm=1&nol_storyid=6131312

Wednesday, November 08, 2006

Unit 2: Reducing climate change effects

This article by the environmentalist George Monbiot in the Guardian is written from a left-ish liberal conservationist perspective....but is he right?

Practice your evaluation skills by trying to counter the arguments he puts forward,,1935560,00.html

Unit 1: Opportunity cost: Trident missiles or decreased CO2 emissions?

This article is quite long but you'll get the idea fairly quickly

a) What is the opportunity cost of replacing trident?
b) Draw a PPC to show this trade-off,,1939422,00.html

Unit 1: The price of gas

This Guardian article shows how both supply and demand determine the price of a product

a) What does it say is happening to supply?
b) How does the demand for gas change?
c) Taking the 2 sides, why does the article argue that prices will remain high?,,1938259,00.html

Unit 1: Demand for Burger King products

Half way down this article are the reasons given for Burger King sales

a) Which factors that influence demand are these
b) What has happened to the demand curve?
c) How do you think Burger King will react?
d) What effect will this have on the demand curve?,,1937038,00.html

Unit 2: Demerit goods: Light bulbs

This article suggests the UK is wasting energy and producing more CO2 than it should as we still use old fashion lightbulbs

a) Why are these lightbulbs an example of a demerit good?
b) What methods could the government use to try and overcome this market failure?
c) Which approach(es) would you recommend they use, and why?,,1938668,00.html

Unit 2: Government action; the higher cost of motoring

If the government is serious about decreasing CO2 from cars, it will have to make motoring less attractive. This article sets out possible government actions

a) What sort of action is it in each case
b) Suggest 2 possible drawbacks in each case to pracice your evauation technique,,1935027,00.html

Unit 2: Carbon Trading

This short section from the Guardian should clarify what carbo trading is and how successful it has been so far,,1934988,00.html

Unit 1: Demand for Digital Televisions

THis article shows the change in consumer purchases of TV's from analogue to digital continues to grow

Look at the list of factors that influence demand and work out which have caused this change in behaviour,,1940301,00.html

Unit 1: Market structure; the broadband market

Read the article and using that and the data below,

a) explain what sort of market you believe the broadband market in the UK to be
b) say which of the criteria for that market are/are not present

Market share June 2006

NTL 27%
BT 24%
AOL/Carphone Wharehouse 13%
Tiscali 11%
Wanadoo 9%
All other providers 16%,,1939399,00.html

Monday, November 06, 2006

Unit 1: Objectives of Firms

From Geoff Riley's blog comes this story of a change of objective for Cadbury's

What would you say is their objective now?

Unit 1: The price and PES of Uranium

A great little story from Geoff Rileys blog

a) What has happened to supply?
b) What does the article tell you about the Price Elasticity of Supply for uranium?

Unit 3: Supply side policies

This from Geoff Rileys blog explains how decreasing taxes may lead to economic growth......but it's not only the result of tax decreases

Unit 2: Inequality of income

This BBC article shows the inequality of income that can arise in a free maket

a) Do you think this inequality is fair or should the Government intervene?
b) If so, how could they intervene?
c) If not, what purpose does this large inequality serve?