Draft Unit 2: Market dominance and the Competition Commission: Supermarkets and their suppliers

http://news.bbc.co.uk/1/hi/business/7070488.stm


** More supermarkets called for **
The Competition Commission has called for the planning system to be changed so there can be more supermarkets.
< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7070000/newsid_7070500?redirect=7070555.stm&news=1&nbwm=1&bbram=1&bbwm=1&nbram=1&asb=1 >


** Fears of superstore takeover **
Some supermarkets may be forced to sell off land to prevent them monopolising the market.
< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7070000/newsid_7071300?redirect=7071306.stm&news=1&bbram=1&nbwm=1&nbram=1&bbwm=1&asb=1 >

Unit 3: Rising exchange rates

http://news.bbc.co.uk/1/hi/business/7069087.stm

Unit 2: Pay as you throw

This BBC article oulines the government plans to introduce trials of taxation on rubbish

http://news.bbc.co.uk/1/hi/uk_politics/7067971.stm

a) How is rubbish disposal an example of market failure?
b) Using a diagram, expain how will this plan reduce the market failure

The London mayor Ken Livingstone is scathing in his critisism of the plan

http://news.bbc.co.uk/1/hi/education/7080699.stm

c) Why does he not think the plan will work

Unit 2: Negative externalities associated with roadworks

Shopkeepers in a village in Wales are complaining that roadworks are cutting their trade by up to half according to this BBC report:
< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7060000/newsid_7064000?redirect=7064074.stm&news=1&nbwm=1&bbwm=1&nbram=1&bbram=1 >

a) Explain what is meant by a negative externality
b) Why are the drop in shopkeepers takings are a clear example of negative externalities?
c) How might these negative externalities have been reduced according to the report?

Unit 2: Market failure and vaccination

The Department of Health has announced more girls are to be vaccinated against cervical cancer virus HPV according to this BBC clip and article.
< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7060000/newsid_7063100?redirect=7063190.stm&news=1&nbwm=1&bbram=1&bbwm=1&nbram=1&asb=1 >

http://news.bbc.co.uk/1/hi/health/7062479.stm

a) Which type of market failure does this current low level of vaccination represent?
b) Using a diagram explain how the market for vaccination currently fail fails
c) Explain the measures the government is taking to overcome the market failure
d) To what extent do you believe these government actions will overcome the market failure

Unit 2: Taxation as a way to reduce market failure: Rubbish collection

The BBC reports the government is having second thought about it's idea to tax those whofail to recycle rubbish

http://news.bbc.co.uk/1/hi/uk_politics/7060607.stm

a) What market failure is this taxation meant to reduce?
b) Using a diagram, explain how the tax would reduce the market failure
c) If the tax was introduced, discuss the extent to which you believe it would be successful

Unit 2: Inequality as a market failure

The idea that the market fails due to the unequal distribution of income and wealth is a contentious issue. This BBC article shows why maybe it should be taken more seriosly

http://news.bbc.co.uk/1/hi/health/7059693.stm

Unit 2: Market failure: Obesity

The following BBC article about weighing schoolchildren and the clip on free school meals in Scotland show the government response to the free market failing due to childhood obesity

http://news.bbc.co.uk/1/hi/uk/7055735.stm
< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7050000/newsid_7055700?redirect=7055785.stm&news=1&nbwm=1&bbwm=1&bbram=1&nbram=1&asb=1 >

a) Why, in economic terms (ie in terms of costs and benefits) does the government worry if children become osese?
b) What form of intervention do these 2 schemes represent?
c) Discuss the extent to which either scheme is likely to be successful in reducing the market failure

Unit 1: Market share ; the games console market

This BBC article outlines the current state of the games concole market

http://news.bbc.co.uk/1/hi/business/7055937.stm

a) Using the information provided in the article, discuss to what extent the games console market reflects any market structure model

Unit 2: Alcohol consumption; Market failure and legislation

Doctors are calling for the compulsory labelling of alcoholic drinks to help stop binge drinking according to this BBC clip and article
< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7050000/newsid_7054600?redirect=7054680.stm&news=1&bbwm=1&nbram=1&nbwm=1&bbram=1 >

http://news.bbc.co.uk/1/hi/scotland/7053037.stm

a) What type of market failure is binge drinking?
b) How does the market fail?
c) What action is proposed in the articles to reduce the market failure?
d) What other actions could the government take?
e) Discuss the extent to which the proposed policy would reduce the market failure

Unit 1: The price of diesel: Rising costs mean rising prices

This BBC article clearly shows the link between rising costs of production and rising prices for consumers

http://news.bbc.co.uk/1/hi/business/7052504.stm

a) Using a S&D diagram, explain why the price of diesel has risen to above £1 a litre. Think what the demand curve will look like before you draw the diagram.

Unit 2: Information failure; salt in fast food

This BBC clip and associated article looks at a new report which shows frighteningly high levels of salt in fast food, especially Pizza Hut pizza. The report shows some fast food may contain more than a whole day's recommended salt intake.
< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7050000/newsid_7052100?redirect=7052102.stm&news=1&nbwm=1&bbwm=1&bbram=1&nbram=1&asb=1 >

http://news.bbc.co.uk/1/hi/health/7050585.stm

a) Explain what example of market failure this represents
b) What are the private benefits of pizza consumption?
c) What are the private costs of pizza consumption?
d) Using a diagram, explain how the market fails
e) Explain 2 different methods the government could use and explain how they would reduce the market failure
f) Comment on how likely these interventions by the government are to overcome the market failure

Unit 1: Increasing costs and the effect on prices

Two French food companies are raising the cost of their dairy products because of high milk prices according to this BBC clip
< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7040000/newsid_7041000?redirect=7041029.stm&news=1&bbwm=1&nbram=1&nbwm=1&bbram=1&asb=1 >

a) Using a S&D diagram, explain how an increase in the price of milk leads to an increase in the price of dairy products in the shops

Unit 1: The effect on demand of England's success at the rugby world cup

A good Guardian article explaining how a variety of products have seen demand increase as England have progressed in the world cup

http://business.guardian.co.uk/story/0,,2193215,00.html

a) What economic reasons can you use to explain the increase in demand for any particular product?

Unit 1: The demand for Coca Cola

Coke have announced mixed results for the last 3 months trading reflecting changing demand for their product

http://business.guardian.co.uk/story/0,,2193169,00.html

a) Identify the regions that have seen an increase in demand for Coke and use economic theory to explain why demand has increased
b) Identify the regions that have seen a decrease in demand for Coke and use economic theory to explain why demand has decreased
c) Draw a diagram to show the overall effect on demand

Unit 1: The price of oil and gold

This Guardian article states that the price of both oil and gold have risen recently

http://business.guardian.co.uk/story/0,,2189353,00.html

a) Using a diagram in each case, explain why the price has risen

Unit 2: External costs of dam building

The Chinese government announce mass population movement due to the effect of the 3 gorges dam

http://www.guardian.co.uk/china/story/0,,2190332,00.html

a) Why is this a great example of an external cost of building dams?

Unit 2: The external costs of obesity

This BBC article portrays a frightening future for the health of the UK population

http://news.bbc.co.uk/1/hi/uk/7043639.stm

a) Explain what is meant by an external cost
b) Explain the external costs associated with obesity
c) What is the market failure associated with obesity?
d) What actions have the government already taken to combat this market failure?
e) What actions are the government proposing to further combat this market failure?
f) Evaluate the likely success of the government's actions

Unit 1: Radiohead's album: A case of no consumer surplus?

This BBC article explains how radiohead are charging for their latest album as a download

http://news.bbc.co.uk/1/hi/entertainment/7037194.stm

a) Explain the concept of consumer surplus
b) Explain the method Radiohead are using to price their album
c) Comment on whether this means there is no consumer surlus in this market

Unit 1: The price of petrol: Increase in taxation

This BBC clip explains that the price of fuel is going up

http://news.bbc.co.uk/player/nol/newsid_7020000/newsid_7021300/7021381.stm?bw=bb&mp=rm&asb=1&news=1

a) Using a S&D diagram, explain why the price of fuel will rise
b) Using a S&D diagram, explain why the price of goods in the shops will rise
c) To what extent can car travel and public transport be regarded as substitutes?

Unit 2: Demerit goods and government action: Raising the age you can buy cigarettes

On the 1st Oct 2007, it became illegal to sell tobacco products to under 18's. This BBC clip and article both explain why the government has taken this action
< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7020000/newsid_7021300?redirect=7021376.stm&news=1&nbram=1&bbram=1&bbwm=1&nbwm=1&asb=1 >

http://news.bbc.co.uk/1/hi/uk/7021320.stm

a) Why are cigarettes a demerit good?
b) What type of actions does the government take to overcome the market failure associated with cigarette smoking
c) To what extent do you believe this latest initiative will overcome the market failure?