Unit 3: 10 years of UK macro data

This series of charts from the BBC shows some aspects of the UK economy during 10 years of Gordon Brown at the treasury

http://news.bbc.co.uk/1/shared/spl/hi/pop_ups/07/business_brown0s_britain/html/1.stm

Unit 1: Contrasting demand for alcohol: Guinness and Whisky

Two stories from the BBC. A clip about falling demand for Guinness in Ireland and the UK and an article about the rising world demand for whisky
< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_6240000/newsid_6248300?redirect=6248398.stm&news=1&bbwm=1&nbwm=1&bbram=1&nbram=1 >

http://news.bbc.co.uk/1/hi/business/6248304.stm

a) Using the factors that influence demand, explain why demand for Guinness may be falling in Ireland and the UK
b) Using the factors that influence demand, explain why world demand for whisky may be rising c) Use a diagram to show what happens to the demand for Guinness around St Patricks day

Unit 2: Government action to stop market dominance

The EU has blocked Ryanair from taking over Air Lingus

http://news.bbc.co.uk/1/hi/business/6244894.stm

The reaction of Michael O'Leary from Ryanair to this judgement can be seen at

< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_6240000/newsid_6243900?redirect=6243902.stm&news=1&nbram=1&bbram=1&bbwm=1&nbwm=1 >

A summary of the position comes from Geoff Riley's blog

http://www.tutor2u.net/newsmanager/templates/?a=2459&z=1

a) On what grounds has the merger been blocked?
b) What possible advantages to consumers might have arisen from the combined airline according to Michael O'Leary?
c) Explain whether you agree or disagree with the EU decision decision

Unit 2: Government intervention with maximum prices regulations

The BBC reports that the Government in Zimbabwe is to cut the price of basics in half to counter their rampant runaway inflation

http://news.bbc.co.uk/1/hi/business/6240636.stm

A video report can be seen at

< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_6240000/newsid_6243600?redirect=6243694.stm&news=1&nbwm=1&nbram=1&bbram=1&bbwm=1 >

a) Draw a S&D diagram to show the effect of this maximum price on one of the listed items
b) Explain the likely consequences in this product market: How will consumers react? What will producers do? What will be the consequences for consumers in the market?

Unit 1: Demand for high priced wines

Majestic report rising sales and profits

http://news.bbc.co.uk/1/hi/business/6237170.stm

a) Use demand theory to explain the rise in demand for £20 bottles of wine
b) Draw a demand diagram to show this effect

Unit 3: Rising exchange rates

A good little BBC article about rising exchange rates

http://news.bbc.co.uk/1/hi/business/6236598.stm

a) What is causing the £ to rise?
b) Draw a S&D diagram to show this rise
c) What drawbacks are identified to this rising value of the £

Unit 3: Economic growth in Brazil

A good article from the BBC explaining the potential for growth in Brazil, but also explaining what is holding it back

http://news.bbc.co.uk/1/hi/business/6763275.stm

a) What factors are stated in the article that form the basis for Brazil's economic growth
b) What is preventing Brazil growing at a faster rate?

Unit 2: Externalities associated with driving

This article from the freakonomics site explains the externalities associated with driving and tries to put a price on them (in the American context)

http://www.freakonomics.com/blog/2007/06/18/hurray-for-high-gas-prices/

a) What are the negative externalities identified?
b) Why are they negative externalities?
c) To what extent would you support the conclusion that gas (ie petrol) taxes need to more than double?

Unit 1: The price of oil; price elasticity of supply

These two BBC articles try and explain the latest rise in the price of crude oil

http://news.bbc.co.uk/1/hi/business/6758891.stm

http://news.bbc.co.uk/1/hi/business/6755077.stm

a) Is supply elastic or inelastic? What reasons are given to explain this ?
b) What is happening to demand?
c) Draw a S&D diagram (using these 2 answers) to show why the price has been rising

Unit 1: Price Elasticity of Demand in the newspaper market

A great article from the Guardian that shows how the concept of PED can be applied in the real world

http://business.guardian.co.uk/story/0,,2103615,00.html

a)What will happen to demand for the FT ans WSJ following the price rise?
b) Why then are the 2 firms raising the selling price?
c) What do the firms believe will happen to their toal revenue from newspaper sales?
d) Is demand for these newspapers therefore elastic or inelastic?
e) Which of the factors that effects elasticity are applicable in this case?

Unit 3: Latest unemployment/inflation figures and an explanation of food inflation

Two BBC articles with the latest statistics

http://news.bbc.co.uk/1/hi/business/6743693.stm

http://news.bbc.co.uk/1/hi/business/6747659.stm

a) What are the trends in each case?
b) What reasons are given for each change?

This BBC clip explains why food prices are rising at almost double the inflation rate

< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_6740000/newsid_6748000?redirect=6748005.stm&news=1&nbwm=1&nbram=1&bbwm=1&bbram=1 >

a) Why, if food prices are rising so fast, is the inflation rate not rising as well?

Unit 2: Tradable permits; EU carbon trading failings

This bbc aricle suggests the EU carbon trading system is not reducing CO2 emissions

http://news.bbc.co.uk/1/hi/business/6748031.stm

a) State the reasons from the article why is the system seen to be failing
b) Suggest ways in which the system could be improved so that it achieved the objective

Unit 2: Are plastic bags demerit goods?

This BBC clip says Belgium will follow the example of Eire and tax plastic bags

< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_6730000/newsid_6739700?redirect=6739771.stm&news=1&nbram=1&nbwm=1&bbram=1&bbwm=1 >

a) Would you agree that plastic bags are demerit goods? Are both conditions present?
b) How does the free market fail if plastic bags are given away?
c) Draw a diagram to show the effect of the tax on the bags
d) Explain the effect and how it overcomes the market failure
e) Evaluate how likely is it that the tax will reduce the market failure
f) Explain one other method the government could have used to reduce the market failure and suggest two drawbacks to using this method

Unit 2: Restrictions on advertising a demerit good

When the market fails, a government can step in and use regulation to try and correct the market failure

This BBC story highlights such a case

http://news.bbc.co.uk/1/hi/health/6732805.stm

a) How would the market fail if the advertising was allowed to take place?
b) Why have the government (in the form of the ASA) intervened here?
c) Why is whole fat milk a demerit good? Make sure you cover both aspects of what makes a demerit good

Unit 2: Waste as a demerit good

A good summary of why waste is a demerit good and what the options are for government to reduce this market failure, from Geoff Riley

http://www.tutor2u.net/newsmanager/templates/?a=2433&z=1

Unit 2: Alcohol consumption; another example of alcohol as a demerit good

A BBC article on excessive alcohol consumption in Australia



http://news.bbc.co.uk/2/hi/asia-pacific/6708533.stm

(a) Identify some of the external costs of rising alcohol consumption among young people
(b) With the aid of a diagram, show how alcohol misuse may lead to market failure
(c) Which government policies do you think might be most effective in the long run in combating some of the social costs of alcohol dependency?

Unit 2: Government failure in Ireland with rubbish charging

An interesting tale

http://www.freakonomics.com/blog/?p=1318&akst_action=share-this

a) What is the market failure the government is trying to correct?
b) How have they attempted to counter the market failure?
c) How is this an example of Govenment failure?

Unit 2: Tradable permits: How carbon trading works and possible drawbacks

A great clip from the BBC explaining carbon trading and its drawbacks

< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_6720000/newsid_6728800?redirect=6728863.stm&news=1&nbwm=1&nbram=1&bbwm=1&bbram=1 >

This aticle suggests the current scheme is not working properly

http://news.bbc.co.uk/1/hi/programmes/file_on_4/6720119.stm

Unit 3: Measuring inflation

Confused by the different measures of inflation? This Guardian article may make things clearer

http://business.guardian.co.uk/story/0,,2080394,00.html