Unit 1: The price of cocoa

This BBC article says the price of cocoa is at a 23 year high

http://news.bbc.co.uk/1/hi/business/7798696.stm

a) Using a S&D diagram, explain why the price of cocoa is rising

Unit 1: Externalities associated with Christmas lights

A BBC clip explaining why a group of French activists are switching off neon lights

http://news.bbc.co.uk/1/hi/world/7798669.stm

a) Explain the positive externalities associated with neon lights.
b) Explain the negative externalities associated with neon lights.

Unit 1: Bolivia's alternative crops; opprotunity cost and the PPC

This BBC article explains that Bolivia's farmers are moving out of growing coca (the basis for cocaine) and in to growing rice

http://news.bbc.co.uk/1/hi/business/7760261.stm

a) Explain the reasons why this change in crops has occured
b) Using a PPC, explain the opportunity cost of growing more rice

Unit 2: Sharply rising unemployment in the uK

The BBC reports sharply rising unemployment

http://news.bbc.co.uk/1/hi/business/7787280.stm

This Ch4 article has a good video as well

http://www.channel4.com/news/articles/business_money/jobless+rise+amid+more+economy+fears/2886767

a) What are the new figures for the 2 measures of unemployment?
b) What is the difference in the 2 methods of recording unemployment?

Unit 2: The negative multiplier in action in Uttoxeter

This BBC clip shows how Uttoxeter has been effected by rising unemployment

http://news.bbc.co.uk/1/hi/england/7788858.stm

a) Explain how Uttoxeter is likely to suffer a negative multiplier effect in the near future
b) What will be the effect on the macroeconomic objectives of low inflation, economic growth, low unemployment and a balance of payments equilibrium in the local economy

Unit 2: The role of time lags in monetary policy

A really good little post on economics help explaining the role of time lags in monetary policy

http://www.economicshelp.org/2008/12/time-lags-in-economics.html

a) Given the information in the article, to what extent do you believe the BoE will be successful in using monetary policy to control inflation?

Unit 1: Poundland: An example of an inferior good?

This BBC clip reports the continued expansion of the Poundland chain

http://news.bbc.co.uk/1/hi/business/7783200.stm

a) Is Poundland an inferior good or can the growth of its sales be explained by the factors that effect demand?
b) What is likely to happen to Poundland sales when the UK comes out of recession

Draft

http://news.bbc.co.uk/1/hi/sci/tech/7777018.stm

Unit 2: Exchange rates: Costs and benefits of a low pound

Economics help has this good 2 sided summary of the costs and benefits of a low pound

http://www.economicshelp.org/blog/economics/costs-and-benefits-of-a-low-pound/

Unit 1: Demerit goods: Government action to decrease cigarette consumption

Today the govt announced plans to ban all point of sale displays of cigarettes, the latest in a long list of legislation aimed at decreasing consumption

http://news.bbc.co.uk/1/hi/uk/7774290.stm video
http://news.bbc.co.uk/1/hi/health/7771210.stm article

a) Why are cigarettes classed as demerit goods?
b) How does the free market fail in its provision of cigaretttes?
c) How will this govt proposal reduce the market failure?

Unit 1: Tradable permits and EU CO2 emissions

This BBC clip outlines opposition to the EU carbon trading scheme

http://news.bbc.co.uk/1/hi/world/europe/7772603.stm

a) Outline how the EU tradable permit scheme works
b) What is the main reason German heavy industry opposes the scheme?

Unit 2: Changes in the components of aggregate demand and their effect on economic growth in China

Economics help has this short explanation of what has driven China's recent economic growth and how things may change in the future

http://www.economicshelp.org/blog/china/chinese-exports-and-economic-growth/

Unit 1: Government action to overcome market failure: Cocaine use

The BBC reports the launch of a hard hitting campaign to reduce cocaine use

http://news.bbc.co.uk/1/hi/health/7762750.stm

a) Why type of market failure does cocaine use represent? Explain your reasoning
b) What are the private costs of cocaine use?
c) What are the external costs of cocaine use?
d) Using a diagram, explain how there is market failure in the cocaine market
e) To what extent do you believe this campaign will reduce the market failure associated with cocaine use?

Unit 1: Government action to overcome market failure: Excessive alcohol consumption

The BBC reports the govts latest plans to combat excessive alcohol consumption

http://news.bbc.co.uk/1/hi/uk_politics/7762594.stm

a) List the proposed alcohol reduction methods
b) To what extent do you think these measures will overcome the problems associated with excessive alcohol consumption

Unit 1: Roadworks and negative externalities

From the BBC comes this sorry tale of shops in severe difficulties due to roadworks

http://news.bbc.co.uk/1/hi/business/7755218.stm

a) Who are the 2 parties to the economic transaction?
b) Define what is meant by the term negative externalies
b) Explain why the shops are suffering negative externalities in this example

Unit 1: A van with reduced negative externalities

WE all know the negative externalities associated with road vehicles, but here from the BBC is something new

http://news.bbc.co.uk/1/hi/uk/7759400.stm

a) What are the reduced negative externalities associated with this van?
b) What negative externalities remain?
c) Using a diagram, explain how a subsidy from the govt will encourage consumption of these vans
d) Why might the govt be reluctant to subsidise such vans?

Unit 2: How does Inflation affect Firms?

From economics help comes this good summary of how inflation affects firms

http://www.economicshelp.org/blog/inflation/how-does-inflation-affect-firms/

Unit 2: Should we worry about a current account deficit?

From Economics help come two good summaries of the issues associated with a current account deficit: Excellent revision aids

http://www.economicshelp.org/2008/11/balance-of-payments-statistics-should.html
http://www.economicshelp.org/2007/03/does-current-account-deficit-matter.html

Unit 2: Should we worry about a current account deficit?

Unit 2: Rising unemployment and negative multiplier effects

Tutor2u has a series of stories highlighting the regional impact of firms laying off workers

http://www.tutor2u.net/blog/index.php/economics/comments/the-rise-of-cyclical-unemployment/

a) Explain the negative multiplier effects on the local economies of rising unemployment.

Unit 2: The menu Costs of Cutting VAT

The tutor2u blog has this good example of menu costs today

http://www.tutor2u.net/blog/index.php/economics/menu-costs-of-cutting-vat/#When:06:31:00Z

This BBC clip shows the effect on one firm

http://news.bbc.co.uk/1/hi/business/7757966.stm

Unit 2: The link between inflation and unemployment

A Good summary of the link from Economics help

http://www.economicshelp.org/blog/economics/inflation-unemployment-relationship/

Unit 2: Do fiscal stimulus packages work?

A good 2 sided look at the issue from Economics help

http://www.economicshelp.org/2008/11/do-economic-stimulus-packages-work.html

Unit 1: Negative externalities associated with binge drinking

Another example from the BBC of negative externalities associated with binge drinking and a possible solution trialled by the government

http://news.bbc.co.uk/1/hi/uk/7741067.stm

This clip also shows the private cost of excessive drinking by the young

http://news.bbc.co.uk/1/hi/health/7743321.stm

a) What negative externalities associated with binge drinking are identified in the clip?
b) What possible solution is being trialled by the government?
c) To what extent do you believe such schemes will reduce the market failure associated with binge drinking?

Unit 2: Negative multiplier effects from the decline of the Detroit motor industry

This BBC article has some examples of the negative multiplier in action

http://news.bbc.co.uk/1/hi/business/7737040.stm

a) Explain what is meant by the negative multiplier effect
b) Explain how the decline of the major motor manufacturers has lead to a negative multiplier effect in the city

Unit 1: Negative externalities associated antisocial driving

This BBC clip and associated article outline new government proposals for dealing with various types of antisocial driving such as driving under the influence of drugs and excessive speeding

http://news.bbc.co.uk/1/hi/uk/7738995.stm video
http://news.bbc.co.uk/1/hi/uk/7738919.stm article

a) Explain what negative externalities arise from antisocial driving
b) What forms of intervention in the free market are the government suggesting?
c) To what extent are the proposals likely to reduce the market failure?

Unit 2: Deflation: What is it and what are the dangers of deflation

CH4 news has this explanatory clip

http://link.brightcove.com/services/link/bcpid1184614595/bctid2579317001

Hugh Pym of the BBC has this article on what deflation is and the dangers it poses to the UK economy

http://news.bbc.co.uk/1/hi/business/7736193.stm article

His video clip explains the latest UK inflation dip and has something on deflation at the end of it

http://news.bbc.co.uk/1/hi/business/7735706.stm

Adrian Brown of the BBC has this analysis of deflation

http://news.bbc.co.uk/1/hi/business/7754487.stm

a) Why if fuel and food prices are falling is the economy not currently experiencing deflation?

Unit 1: External costs associated with obesity

This BBC clip shows how the NHS has adapted to cope with the growing size of some of their patients

http://news.bbc.co.uk/1/hi/england/7735717.stm

a) Define what is meant by a negative externality
b) Why is this additional expenditure by the NHS an example of the negative externalities associated with obesity

Unit 1: Developments in tradable permits carbon trading in the uk

The BBC reports that the tradable permits system is changing in the Uk

http://news.bbc.co.uk/1/hi/sci/tech/7736005.stm

a) Why are firms to be charged for 30% of the permits that they require?
b) To what extent do you believe this will reduce the market failure for 9i0 each firm and 9ii) the market as a whole

Unit 2: What should happen to interest rates?

The Economics help blog has this summary of why interest rates may fall further in the UK

http://www.economicshelp.org/blog/economics/outlook-for-interest-rates/

Unit 2: What's happening to inflation in the UK?

From Geoff Riley's tutor2u blog comes this great summary of recent movements in UK inflation in the UK and what might happen in the future

http://www.tutor2u.net/blog/index.php/economics/comments/disinflation-and-deflation/

The BBC has a summary video and article including an explanation of why deflation may not be as attractive as it seems

http://news.bbc.co.uk/1/hi/business/7734758.stm video
http://news.bbc.co.uk/1/hi/business/7734522.stm article

Unit 1: Information failure while trying to get a tan

The BBC has a classic example of information failure

http://news.bbc.co.uk/1/hi/health/7732712.stm video
http://news.bbc.co.uk/1/hi/health/7732690.stm article

a) What is the information failure in this market?
b) How might the market fail as a result?
c) What actions could the government take to reduce the market failure?

Unit 2:EU tariffs on Chinese candles

AP reorts the EU is putting variable tariffs on imports of Chinese candles for the next 6 months

http://www.google.com/hostednews/ap/article/ALeqM5jY-DSfzHnGwnfJsKxyAcn02B26yQD94FECD00

a) Explain what a tariff is
b) Using a suitable diagram, comment on the effect of the tariff on EU consumers

Unit 2: Inflationary noise

Economics help has this good description of inflationary noise and the problems it causes

http://www.economicshelp.org/blog/economics/inflationary-noise/

Unit 1: Car clubs, an inferior good?

The BBC has an interesting clip on the growth of car clubs

http://news.bbc.co.uk/1/hi/business/7728779.stm

a) Define an inferior good
b) To what extent would you argue that car clubs are an example of an inferior good

Unit 1: Negative externalities associated with smoking in the developing world

Two clips from the BBC on smoking in China and India; the figures are mind boggling!

http://news.bbc.co.uk/1/hi/world/asia-pacific/7726770.stm China
http://news.bbc.co.uk/1/hi/world/south_asia/7647665.stm India

a) What negative externalities are there for China and India of smoking on such a vast scale?
b) What private costs are there associated with smoking?
c) Comment on the likeyhood of the suggested government actions reducing the negative externalities

Unit 2: The state of the UK economy: Nov 2008

A great BBC clip showing the current position of the economy and the outlook for the economy over the next year

http://news.bbc.co.uk/1/hi/business/7724776.stm

a) What is happening, and predicted, for the 3 macroeconomic objectives mentiones; ie economic growth, inflation and unemployment?
b) Comment on the likely effect on the current account of the BoP if the predictions turn out to be true

Unit 2: Imported recession in Germany

An interesting BBC clip explaining that germany appears to have imported its recession

http://news.bbc.co.uk/1/hi/world/europe/7726218.stm

a) Using the AD formula, explain how Grermany has imported a recession
b) Using an AD/AS diagram, explain the effect on the German economy

Unit 1: External costs of obesity

BBC NI reports the external costs of obesity in the provinces at £500m

http://news.bbc.co.uk/1/hi/northern_ireland/7725986.stm

a) What is a negative cost?
b) Give examples of the external costs listed asociated with obesity
c) Suggest two measures the government can take to reduce the negative externalities associated with obesity and comment on how successful they are likely to be

Unit 2: Rising unemployment in the UK

This BBC clip and article rrising UK unemployment to an 11 year high

http://news.bbc.co.uk/1/hi/business/7723784.stm video
http://news.bbc.co.uk/1/hi/business/7724084.stm article

a) Why is unemployment rising?
b) What is the unemployment rate?
c) What are there 2 unemployment measures and what is the difference between them?
d) What actions can the government take to reduce the level of unemployment?

Unit 2: Conflicts of Objectives and Interest rates.

Form Economics help comes this summary of the conflicts of Objectives and Interest rates.

http://www.economicshelp.org/blog/economics/conflicts-of-objectives-and-interest-rates/

Unit 2: The Economics of Tax Cuts

Form Economics help comes this interesting summary of The Economics of Tax Cuts

http://feeds.feedburner.com/EconomicsEssays?format=xml

Unit 1: Falling demand for products in Wales

A sad tale showing the recession beginning to take effect in 3 different sectors of the Welsh economy

http://news.bbc.co.uk/1/hi/wales/7716867.stm

a) Use the concept of Income Elasticity of Demand to explain what is happening to these 3 companies

Unit 2:Government income/borrowing during a recession

A good summary of the topic from Economics help

http://www.economicshelp.org/2008/11/government-borrowing-in-recessions.html

a) Using an AD/AS diagram, explain how govt borrowing and the resulting increase in govt expenditure should increase economic growth. Make sure you draw the diagram to show very little inflation results in the economy

Unit 2: The problems of a Current Account Deficit

From Economics help comes this good summary of the problems associated with a Current Account Deficit

http://www.economicshelp.org/blog/economics/problems-of-a-current-account-deficit/

Unit 2: The Case for Lower Interest Rates

From Economics help comes a clear summary of the arguments as to why interest rates should fall in the UK

http://www.economicshelp.org/2008/10/case-for-lower-interest-rates.html

a) Why might decreasing interest rates not be the solution to the problems outlined?

Unit 2: Consumption, aggregate demand and economic growth

A gret little summary of the above links from tutor2u

http://www.tutor2u.net/blog/index.php/economics/comments/what-if-the-consumer-abandons-the-economy/

This BBC video clip also illustrates why the US economy is shrinking

http://news.bbc.co.uk/1/hi/business/7701255.stm

a) Using an AD/AS diagram, explain how a fall in consumption can lead to a fall in output in the economy
b) What other problems would arise in the economy if this was to occur?
c) What benefits might there be to the economy if this were to occur?
d) To what extent would such a series of events be beneficial to the UK economy in the long run?

Unit 1: Inferior goods in the UK economy

Tutor2u pointed out this article

http://edinburghnews.scotsman.com/features/Meet-the-credit-crunch-winners.4631545.jp

a) Define an inferior good including the term "income elasticity of demand"
b) To what extent do you believe the goods/services mentioned in the article are inferior goods?

From Economics help comes this look at the question of which is more important, low inflation or economic growth

http://www.economicshelp.org/blog/economics/growth-vs-inflation/

Unit 2: Keynesian economics

From tutor2u I learn of these great summaries of Keynesian economics in the Telegraph and Independent

http://www.telegraph.co.uk/finance/comment/rogerbootle/3264845/We-now-face-Keynesian-conditions-and-need-truly-Keynesian-solutions.html Telegraph

http://www.independent.co.uk/news/uk/politics/the-big-question-who-was-jm-keynes-and-does-he-offer-answers-to-the-economic-crisis-975460.html Independent

Unit 1: Poundland: An inferior good?

This article from the BBC highlights the growth of pounland and other £1 shops

http://news.bbc.co.uk/1/hi/business/7680302.stm

a) Discuss the extent to which these shops might be classed as inferior goods
b) If they are inferior goods, what could you say about the income elasticity of demand figure?

Unit 1: Are diamonds a superior good?

A clip from the BBC showing falling demand for diamonds

http://news.bbc.co.uk/1/hi/world/south_asia/7688073.stm

a) How has the recession in the USA effected demand for Indian diamonds?
b) How would you therefore describe demand for Indian diamonds and what can you say about the value for the income elasticity of demand for Indian diamonds?
c) Why might diamonds be regarded as a superior goods

Unit 2: Pros and cons of reducing interest rates

A great summary from Economics help of the pros and cons of reducing interest rates

http://www.economicshelp.org/2008/10/how-much-should-interest-rates-fall.html

Unit 1: The price of fish

A thanks to tutor2u for pointing out this example of supply and demand in action

http://news.bbc.co.uk/1/hi/england/7674195.stm

a) What is a market?
b) Using a S&D diagram, exlain why the price of fish sold in the market in Hull has risen

Unit 2: Why the £ is depreciating

A great post from the tutor2u blog on what determines the value of the £ and the effect of a depreciating $.

Some of it goes beyond what is needed at AS level, but it's very interesting

http://www.tutor2u.net/blog/index.php/economics/comments/why-is-the-pound-falling-in-value-and-does-it-matter/#extended

Unit 2: How to stimulate the economy

A great summary from the BBC on different approaches the government can take to stimulate the economy and the problems associated with different approaches

http://news.bbc.co.uk/1/hi/magazine/7682887.stm

a) Explain how fiscal policy can stimulate growth
b) What are the problems with using fiscal policy?
c) Explain how monetary policy can stimulate growth
d) What are the problems with using monetary policy?

Unit 2: Changes in real GDP over time

From the tutor2u blog comes this realy interestng chart (you can also look at the powerpoint to see more data)

http://www.tutor2u.net/blog/index.php/economics/comments/in-the-long-run/

a) Describe what has happened to real GDP in the period shown
b) Identify the periods the UK was in recession
c) To what extent do you believe the average UK citizen has benefitted from a rising standard of living over the period shown?

Unit 1: Changing equilibrium in the car market

A really good post from Geof Riley's tutor2u blog on changes in the car market

http://www.tutor2u.net/blog/index.php/economics/comments/why-are-the-car-companies-cutting-production/

a) Using a S&D diagram, explain why the change in equilibrium has occured in the car market
b) Use the concept of elasticity of SUPPLY to explain why customers are unlikely to see large falls in the price of cars from these manufacturers

Unit 1: How Firms Use Income Elasticity of Demand

From Economics help comes this useful revision aid

http://www.economicshelp.org/blog/economics/firms-use-income-elasticity/

Unit 2: Why we need economic growth

An interesting argument to recap ideas on the benefits of economic growth

http://news.bbc.co.uk/1/hi/magazine/7674841.stm

Unit 1: Information failure: Drinking and the risk of breast cancer

The BBC reports most women are unaware of the increased risk of breast cancer which follows excessive drinking

http://news.bbc.co.uk/1/hi/health/7675843.stm

a) Why is this an example of information failure?
b) How does the market fail?
c) What actions could the government take to reduce the market failure?
d) How successful do you think such measures would be?

Unit 1: The price of toys fron China

This excellent clip explains the reasons why toys from China are going to cost more for UK consumers and why Chinese toy manufactures are going out of business

http://news.bbc.co.uk/1/hi/world/7673192.stm

a)Using information from the clip, explain using S&D analysis why the price of toys will rise

Unit 2: Unemployment on the rise in the UK

Today come the worst unemployment figures for 17 years......... and the indication that the worse is yet to come. Lots of resources explain why

http://news.bbc.co.uk/1/hi/business/7670800.stm Jobless at 17 year high
http://news.bbc.co.uk/1/hi/business/7672198.stm How bad will it get?
http://news.bbc.co.uk/1/hi/world/asia-pacific/7672590.stm Video
http://news.bbc.co.uk/1/hi/world/south_asia/7672566.stm Video
http://news.bbc.co.uk/1/hi/business/7670909.stm BBC video
http://link.brightcove.com/services/player/bcpid1184614595?bctid=1859014778 Ch 4 video

a) What 2 measures are used to record unemployment?
b) What is the difference betwen the 2 measures?
c) Why has unemployment risen?
d) Why might there be much more unemployment to come in the months ahead?

An interesting analysis, including a powerpoint, comes from the tutor2u blog

http://www.tutor2u.net/blog/index.php/economics/contraction-in-employment-is-what-matters/#When:18:39:00Z

Unit 1: Inferior and normal goods

From the BBC comes this interesting article about 2 Whitbread brands

http://news.bbc.co.uk/1/hi/business/7668895.stm

a) To what extent is Premier Inns an inferior good?
b) To what extent is Costa coffee a normal good?

Unit 2: Inflation in the UK at 16 year high

Various articles explaining the rise in the CPI to 5.2% and why inflation may fall in the near future. Remember, we're talking about 5.2% a year.............whilst in Zimbabwe it 231% million!

http://www.guardian.co.uk/business/interactive/2008/may/13/inflation Guardian graphic
http://news.bbc.co.uk/1/hi/business/7669338.stm BBC video on why inflation may fall
http://news.bbc.co.uk/1/hi/business/7672069.stm BBC article on falling petrol prices
http://news.bbc.co.uk/1/hi/business/7668608.stm BBC article on why inflation has risen
http://news.bbc.co.uk/1/hi/business/7669841.stm and another on why it's likely to fall
http://news.bbc.co.uk/1/hi/business/7668717.stm BBC Video
http://link.brightcove.com/services/player/bcpid1184614595?bctid=1855547316 ch4 video

This tutor2u post is very clear and includes a powerpoint

http://www.tutor2u.net/blog/index.php/economics/comments/highest-inflation-for-16-years-but-no-panic/

Negative externalities and government action: Cars in China

An interesting clip from the BBC

http://news.bbc.co.uk/1/hi/world/asia-pacific/7667462.stm

a) What are the negative externalities that can be seen in the video clip?
b)Why do these negative externalities arise?
c) What actions is the government taking to reduce the negative exteralities?
d) From what is said in the clip, to what extent do you think the measures will be successful in reducing the market failure?

Unit 2: Zimbabwe inflation hits 231m%

If you thought things were bad in the UK, spare a thought for Zimbabwe where official inflation has hit 231 million percent!

http://news.bbc.co.uk/1/hi/world/africa/7660569.stm

Unit 1: Negative externalities associated with Health issues in the Uk

Two articles from the BBC showing negative externalities

http://news.bbc.co.uk/1/hi/health/7656214.stm obesity
http://news.bbc.co.uk/1/hi/health/7654153.stm smoking

a) Using a diagram, explain why obesity and smoking represent market failure

Unit 1: Legislation to reduce market failure: Cigarette smoking

The BBC reports a bus driver being fined for smoking on his bus

http://news.bbc.co.uk/1/hi/scotland/tayside_and_central/7663547.stm

a) What is the economic argument for banning smoking in public places?
b) To what extent do you think a £50 fine for being caught will reduce the market failure?

The BBC reports an example of negative externalities in China

http://news.bbc.co.uk/1/hi/world/asia-pacific/7665193.stm

a) Explain why the people falling sick is an example of a negative externality
b) Suggest 2 courses of action the government could take to try and reduce the possibility of such an incident happening again

Unit 1: Regulations to reduce binge drinking

The BBC reports new government proposals to reduce the market failure associated with binge/excessive drinking

http://news.bbc.co.uk/1/hi/uk/7665761.stm

a) How does binge drinking represent a market failure?
b) What are the new proposals?
c) To what extent do you believe any one, or the combined proposals, are likely to be successful?

Unit 1: Information failure: Electronic cigarettes

The BBC reports rising sales of electronic cigarettes

http://news.bbc.co.uk/1/hi/video_and_audio/7658334.stm

a) What is the information failure in the electronic cigarette market?
b) Does this represent asymmetric information in the market?
c) What is the outcome in the free market of this informatio failure?
d) What actions could government take to reduce/eliminate the market failure?

Unit 1: Positive externalities associated with hydrogen bikes

This BBC clip shows the new hydrogen bike developed by Loughborough University

http://news.bbc.co.uk/1/hi/england/7655831.stm

a) What would be the private cost of owning a hydrogen bike?
b) What would be the private benefit of owning a hydrogen bike?
c) What would be the positive externalities/external benefits of the hydrogen bike?
d) Are there any negative externalities/external costs associated with the bike?

Unit 2: Reducing Unemployment By Using Monetary Policy

This Economics help article summarises how using Monetary Policy should reduce unemployment....and why it might not

http://www.economicshelp.org/blog/unemployment/reducing-unemployment-by-using-monetary-policy/

Unit 2: The slowing British economy

This Ch4 clip summarises nicely the current position of the Uk economy

http://link.brightcove.com/services/player/bcpid1184614595?bctid=1832200503

a) What effect will falling consumer confidence (as shown by the decrease in sales at M&S) have on aggregate demand?
b) What effect will falling investment (as stated will happen at M&S) have on aggregate demand?
c) What negative multiplier effects may arise from these decreases in consumption and investment in the economy?
d) Using an AS/AD diagram, explain how a cut in interest rates could reverse this decline in output/economic growth
e) To what extent do you think such a cut in interest rates would alleviate the problems in the UK economy?

Unit 1: The costs of information failure: Premature death in China

This BBC article shows external costs associated with market failure due to information failure in China

http://news.bbc.co.uk/1/hi/world/asia-pacific/7652140.stm

a) What is the information failure in China?
b) What is the consequence of this information failure?
c) How is it suggested the information failure could be reduced?
d) To what extent do you believe such policies would be successful?

Unit 2: What are the current causes of inlation in the UK?

From the economics help blog comes this useful summary

http://feeds.feedburner.com/EconomicsBlog?format=xml

a) Explain the difference between cost push and demand pull inflation
b) Using an AS/AD diagram, explain how cost push inflation arises
c) The article ays inlation should ease due to less demand pull pressures: Using an AS/AD diagram, explain how this will occur

Unit 1: How good are government actions to overcome information failure: Food labelling

This BBC report suggests that Government actions may not result in much of a reduction in market failure due to information failure

http://news.bbc.co.uk/1/hi/health/7641476.stm

a) Using a S&D diagram, explain how the market for food fails
b) What form of action has the government taken to reduce the market failure?
c) Why is it failing to reduce the market failure as anticipated?

Unit 1: Actions to overcome information failure: Cigarette packets

The BBC reports the latest information campaign by government to reduce smoking

http://news.bbc.co.uk/1/hi/uk/7639138.stm

a) In what way does the market fail with smoking?
b) How is this campaign meant to reduce this market failure?
c) To what extent do you think the campaign is likely to succeed?

Unit 2: Interest rates: Should they rise or fall?

From the Economics Help blog comes this summary of the position the BoE currently finds itself in; to lower interest rates or not?

http://www.economicshelp.org/2008/09/interest-rate-forecasts-for-uk.html

Unit 1: Price Elasticity of Demand and football fans

The Guardian reports away fans are facing huge rises in the aveerage cost of an away trip

http://www.guardian.co.uk/football/2008/sep/24/1

a) Using the idea of Price Elasticity of Demand, evaluate the likely effect of this 21% rise in price for an away trip. You will lose marks if you mention Spurs are bottom of the league at the time of writing!

Unit 2 Changes in the types of output in the GDP

From Geoff Riley comes this interesting chart

http://www.tutor2u.net/blog/index.php/economics

a) Outline the changes that have occured in the relative importance of the identified components of GDP since 2000
b) Why do you think these changes may have occured?

Unit 1: Demand for Microsoft's Xbox

The BBC reports a price cut for the Xbox

http://news.bbc.co.uk/newsbeat/hi/newsbeat/newsid_7618000/7618515.stm

a) Using a demand diagram, explain the effect of the price cut
b) Explain how successful you think the price cut will be for Microsoft a) in the short run, b) in thelonger term

Unit 2: Rising unemployment in the UK

UK unemployment is rising according to this BBC clip

http://news.bbc.co.uk/1/hi/uk/7621225.stm

a) Why is the brick company laying off workers?
b) Using an AD/AS diagram, explain what is happening in the UK economy to cause this rise in unemployment
c) Suggest 3 different policy measures the government could use to reduce unemployment
d) Give one drawback of using each method

Unit 2: Pros and cons of inflation

From the Economics Help blog comes this great summary of why inflation is seen to be bad, but which also outlines the advantages of a low rate of inflation

http://www.economicshelp.org/blog/economics/pros-and-cons-of-inflation/

Unit 2: Inflation rises to 4.7% so why doesn't the BoE respond by using Monetary Policy?

From the BBC comes this clip and article about why inflation continues to rise and what the BoE is doing to try and return it to it's target of 2%

http://news.bbc.co.uk/1/hi/business/7618286.stm

Two other BBC video clips are at

http://news.bbc.co.uk/1/hi/business/7619088.stm
http://news.bbc.co.uk/1/hi/business/7619088.stm

This Ch4 video identifies another key reason for inflation, the fall in the value of the £

http://link.brightcove.com/services/player/bcpid1184614595?bctid=1797752529

a) Explain what sort of inflation the UK seems to be suffering
b) What are the main reasons given for the rise in inflation?
c) Using the table at the bottom, explain how some prices can be falling if inflation is rising
d) How does the falling £ push up inflation (CH4 video)
e) To what extent do you think the BoE is capable of reducing the current inflation rate?

Want to calculate your own inflation rate? You can do it via the ONS calculator at

http://news.bbc.co.uk/1/hi/business/7610430.stm

Unit 2: Government Expenditure in the UK

A great chart showing where Govt expenditure occurs in the UK economy

http://image.guardian.co.uk/sys-files/Guardian/documents/2008/09/12/13.09.08.Public.spending.pdf

Unit 2: Economic growth and standard of living

From the Economics help blog comes this look at Economic growth and standard of living in China

http://www.economicshelp.org/blog/economics/chinas-economic-growth-and-living-standards/

a) Evaluate the extent to which Economic growth is beneficial to the average Chinese citizen

Unit 1: The Economic Problem; a summary

A good summary of the introductory ideas from the AS syllabus from the Economics Help blog

http://www.economicshelp.org/2008/09/economics-and-scarce-resources.html

Unit 2: The effect of changing interest rates on the Australian economy (Monetary policy)

An interesting, short article from the BBC

http://news.bbc.co.uk/1/hi/business/7593189.stm

The Australian govt seems to face the same dilemma as the UK govt does!
a) Using an AS/AD diagram, explain how the cut in interest rates may lead to increased economic growth with little additional inflation
b) Using an AS/AD diagram, explain how the cut in interest rates may lead to increased inflation with little additional growth

Unit 2: The dilemma in setting interest rates (monetary policy)

A good clip from Ch4 on the dilemma facing the BoE in setting interest rates

http://link.brightcove.com/services/player/bcpid1184614595?bctid=1773162851

a) Explain the dilemma faced by the BoE when setting interst rates in terms of conflicting macroeconomic objectives
b) Use AD/AS diagrams to in each case to explain how the BoE could use interest rates to resolve the problems

Unit 1: Falling disposable incomes and the effect on demand for cars and budget hotels

3 articles from the BBC showing the effect on the demand for cars and budget hotels of falling incomes in the UK

http://news.bbc.co.uk/1/hi/business/7597387.stm Premier Inns
http://news.bbc.co.uk/1/hi/business/7599681.stm Bentley cars
http://news.bbc.co.uk/1/hi/business/7597954.stm New car sales

Use the concepts of normal/inferior goods to explain
a) The change in demand for Premier Inn rooms
b) The change in demand for Bentley cars
c) The change in demand for different types of cars. How does the idea of Complements also explain this change?

Unit 1: The demand for organic food

This BBC video clip reports a fall in demand for organic food

http://news.bbc.co.uk/1/hi/business/7601619.stm

a) Using the theory of demand, give 2 reasons why demand for organic food has fallen
b) Draw a diagram to show what happens to demand in each case
c) What term would you use to describe organic food given the change in sales as consumer incomes fall

Unit 1: Charity shops - an example of inferior goods?

An interesting article from the BBC

http://news.bbc.co.uk/1/hi/business/7591970.stm

a) Explain what is meant by an inferior good
b) What evidence is there in the article that charity shops are inferior goods?

Unit 1: Information failure: Perfume in pregnancy

This BBC article suggests possible information failure in the perfume market

http://news.bbc.co.uk/1/hi/scotland/edinburgh_and_east/7590641.stm

a) How does information failure represent market failure?
b) Evaluate 2 possible methods the govt could use to reduce the market failure in this case

Unit 1: Negative externalities associated with binge drinking

This BBC article (including a video) clearly shows the negative externalities associated with binge drinking

http://news.bbc.co.uk/newsbeat/hi/health/newsid_7588000/7588865.stm

a) What is a negative externality?
b) Why is binge drinking a negative externality?
c) How does the freee market fail in this case?
d) What actions can govt take to reduce this market failure?

Unit 1: The demand for chocolate

This BBC video clip is interesting when considering the demand for chocolate

http://news.bbc.co.uk/1/hi/business/7580488.stm

a) What economic factors influence the demand for chocolate
b) The video says price will rise but that this will not effect demand much at all. What does this tell you about the demand for chocolate?
c) Use economic theory to explain why this is the case
d) Draw a S&D diagram to show and then explain the effect of the increase in costs on the chocolate market

Unit 2 Monetary policy: The difficulty in setting interest rates when faced with conflicting macro economic objectives

The BBC reports the latest thoughts of the MPC on interest rates

http://news.bbc.co.uk/1/hi/business/7571925.stm

a) What problem means that interest rates should rise and how would that solve the problem?
b) What problem means that interest rates should fall and how would that solve the problem?

Unit 1: Opportunity cost in the NHS

This BBC video clip and asociated article shows how NICE has to make choices on which drugs the NHS can be prescribed

http://news.bbc.co.uk/1/hi/health/7579495.stm video
http://news.bbc.co.uk/1/hi/health/7579422.stm article

More on the story can be found at

http://news.bbc.co.uk/1/hi/health/7546572.stm

a) What is meant by opportunity cost?
b) How does this decision by NICE illustrate the economic problem and the concept of opportunity cost?
c) Using a PPC, show the choices open to NICE

Unit 2: Calculating inflation

This Ch4 video is great at explaining how students face an inflation rate much higher than the official CPI

http://www.channel4.com/news/articles/business_money/inflation+hits+students+hardest/2417272

This Ch4 article also shows the typical amounts spent by students on various items

http://www.channel4.com/news/articles/business_money/accommodation+biggest+student+cost/2431392

a) Explain why the student inflation rate is higher than the CPI. Include in your answer the following terms: basket of goods, weighting

Unit2: Inflation in Zimbabwe hits 11.2m%

The downward spiral of the Zimbabwe economy continues as inflation reaches a new high according to the BBC

http://news.bbc.co.uk/1/hi/business/7569894.stm

Unit 1: Business waste: Taxation as a way to overcome market failure

This BBC article suggests that the landfill tax has been successful in reducing the amount industry sends to landfill but that further action is needed to reduce business waste

http://news.bbc.co.uk/1/hi/sci/tech/7570909.stm

a) What sort of market failure is business waste?
b) Using a diagram explain how the landfill tax act as a stimulus to reduce the market failure
c) What advantages and disadvantages are there to using taxation to reduce the market failure associated with business waste?

Unit 2: Rising unemployment in the UK

The latest figures show rising unemployment figures

http://news.bbc.co.uk/1/hi/business/7557925.stm

a) Why is it suggested that UK unemployment is rising?

Unit 1: Government action to overcome market failure: Fresh fruit

This BBC video and associated article, outline government action to overcome market failure in the market for fresh fruit to overcome the problem of bad diet and obesity

http://news.bbc.co.uk/1/hi/health/7558827.stm video
http://news.bbc.co.uk/1/hi/health/7556850.stm article

a) What type of action is the government taking to increase consumption of fresh fruit?
b) How should this increase consumption of fresh fruit?
c) In economic terms, what sort of good is fresh fruit?
d) Why, in economic terms, is the govt so keen to increase consumption of fresh fruit?

Unit 2: Slowing economic growth in Germany

This BBC clip explains why economic growth in slowing in Germany

http://news.bbc.co.uk/1/hi/business/7560437.stm

a) How is economic growth measured?
b) Using the aggregate demand formula and using an AD/AS diagram, explain why growth is slowing in Germany

Unit 2: UK inflation up to 4.4% in July

This BBC clip and associated article, explain the latest rise in the CPI

http://news.bbc.co.uk/1/hi/business/7556483.stm video
http://news.bbc.co.uk/1/hi/business/7555788.stm article

a) Why do fast rising food, utility and fuel prices (all over 10%) result in only a 4.4% rise in inflation?

Unit 1: A campaign to overcome information failure: MMR

This BBC clip outlines a plan to get those wiithout full MMR protection immunised

http://news.bbc.co.uk/1/hi/health/7546531.stm

a) What is the private cost of getting a MMR jab?
b) What is the private benefit of getting a MMR jab?
c) What are the external benefits/positive externalities associated with a MMR jab?
d) How successful is the govt information campaign likely to be in reducing the market failure?

Unit 2: Proctionism and free trade: Who wins and who loses

From Economics Help comes this useful post on free trade and protectionism

http://www.economicshelp.org/2008/07/free-trade-policy-and-paradox.html

Unit 1: Tradable permits in action: Drax power station

From Geoff Riley comes this interesting post showing tradable permits in action

http://www.tutor2u.net/blog/index.php/economics/comments/drax-feels-the-heat-of-rising-carbon-prices/

a) What is the market failure associated with Drax?
b) To what extent does the article suggest that the tradable permits system will reduce the market failure in the long run?

Unit 1: Information faillure in the alcohol market in Scotland

The BBC has this clear example of information failure in the alcohol market in Scotland

http://news.bbc.co.uk/1/hi/scotland/7538747.stm

a) How does tha alcohol market fail if information failure exists?
b) What negative externalities occur as a result according to the article?
c) Given that both information failure and negative externalities exist, what sort of good is alcohol (in economic terms)?
d) Given the results of the survey, what actions could the Scottish government take to reduce the market failure?

Unit 1: Demand for Crocs

The Guardian reports that demand for Crocs shoes is falling

http://www.guardian.co.uk/business/2008/jul/26/retail.fashion

a) Use a demand diagram to show what has happened to demand for Crocs and use demand theory to explain why this has happened
b) What could the Crocs producers do to try and reverse this trend and increase demand again?

Unit 1: The impact of a techological advance on the PPC

This BBC article shows the impact of improving technology on an economy's output

http://news.bbc.co.uk/1/hi/world/europe/7528850.stm

a) Using a diagram, show and explain what has happened to output in Russia (label one axis Agricultural output and the other Industrial output)

Unit 1: River pollution: The inadequacy of government action to overcome market failure

This BBC article shows the legislation by itself may not eliminate market failure

http://news.bbc.co.uk/1/hi/northern_ireland/7532163.stm

a) What is the market failure in the free market?
b) Why do the pollution incidents still occur even though there is legislation which means they should not?

Unit 2: Free trade v Proectionism

A good clip from the BBC highlighting protectionism in action

http://news.bbc.co.uk/1/hi/business/7532191.stm

a) What forms of protectionism are used in the cotton industry?
b) Who loses from this protectionism and in what way do they lose?
c) Who would gain if there was free trade in cotton?
d) Given these advantages of greater globalisation, why do the protectionist measures remain?

Market structures: Oligopoly and the games console market

Geoff Riley has this interesting post about the changing nature of the games console market

http://www.tutor2u.net/blog/index.php/economics/comments/nintendo-poised-to-overtake-sony-in-the-consoles-battle/

Unit 1: Government action to overcome market failure: Trans fats in California

An interesting article from the BBC on banning trans fats in California

http://news.bbc.co.uk/1/hi/world/americas/7526624.stm

a) Using a diagram, explain what sort of market failure trans fats represent
b) Why has California taken this action?
c) To what extent do you think the action will reduce the market failure?

Unit 2: Slowing economic growth in the UK

This BBC clip and asociated article show economic growth in the UK slowing

http://news.bbc.co.uk/1/hi/business/7525678.stm video
http://news.bbc.co.uk/1/hi/business/7524834.stm article

a) How is economic growth measured in the UK?
b) Which components of aggregate demand are slowing according to the clip?

Unit 1: Notional, Effective and Price elasticity of demand for air travel

From Geoff Riley's blog comes this graet piece on demand

http://www.tutor2u.net/blog/index.php/economics/comments/cheap-flights-elasticity-and-effective-demand/

a) Explain the difference between notional and effective demand for airlines
b) What is the formula for PED?
c) Using the information provided calculate the PED for flights
d) Using the information provided calculate the exact fall in the number of passengers if prices rise by 20%
e) Why is the PED likely to be inelastic?

Unit 2: Decreasing consumer confidence

The BBC reports falling consumer sales

http://news.bbc.co.uk/1/hi/business/7523571.stm video

a) Why is a fall in consumption important for the UK economy
b) Comment on the likely effect of a fall in consumer confidence and a decrease in consumption on the UK economy

Unit 1: Allocative efficiency in the North American motor indusrty

Geoff Riley has this summary of changes at Ford in the USA

http://www.tutor2u.net/blog/index.php/economics/a-change-of-direction-for-ford/#When:13:04:00Z

The BBC reports similar changes at General MOtors in the USA

http://news.bbc.co.uk/1/hi/business/7538470.stm

a) Explain how these changes in what is produced represents a move towards greater allocative efficiency in the North American motor market

Unit 1: The effect on price of reducing subsidies

The BBC reports a decrease in the subsidy on petrol in Vietnam

http://news.bbc.co.uk/1/hi/business/7517944.stm

a) Using a S&D diagram, explain why the reduced subsidy will lead to an increase in the price of petrol
b) Will the price rise by most of the reduction in the value of the subsidy, or not? Explain your answer

Unit 1: How S&D explain the price of oil

A really good explanation of the application of S&D to the price of oil from the BBC

http://news.bbc.co.uk/1/hi/business/7519414.stm

a) What demand factors effect the price of oil?
b) What supply factors effect the price of oil?
c) Why does the price of oil change daily when many of these factors do not?

Unit 2: More evidence of alcohol as a demerit good

A great BBC video clip and associated article highlighting continued problems with excessive alcohol consumption in the UK

http://news.bbc.co.uk/1/hi/health/7519613.stm video
http://news.bbc.co.uk/1/hi/health/7518843.stm article

a) Why would alcohol be classed as a demerit good?
b) What actions have been taken so farto reduce the market failure?
c) What actions is the government now threatening?
d) To what extent do you believe the government can reduce the market failure associated with excessive alcohol consumption?

Unit 3: Is the CPI an accurate measure of Inflation?

An interesting article in the Guardian explaining why the CPI may be an accurate measure of inflation despite most people's perception that inflation is higher

http://www.guardian.co.uk/business/2008/jul/21/inflation.economicgrowth1

Unit 3: Zimbabwe inflation hits 2,200,000% and the central bank issues a Z$100billion note

If you thought the UK inflation rate may be worrying at 3.8%, just think what trying to operate in the Zimbabwe economy must be like

http://news.bbc.co.uk/1/hi/business/7509715.stm

This article from the Guardian explains how ordinary Zimbabwe citizens are dealing with the economic meltdown

http://www.guardian.co.uk/world/2008/jul/18/zimbabwe

And as a response to the falling purchasing power of the Z$, the govt issues a new note with a face value of......Z$100billion! What will it buy? According to this BBC article, a loaf of bread

http://news.bbc.co.uk/1/hi/world/africa/7515823.stm

This small section of a Guardian article shows what hyperinflation does to the purchasing power of money:

The demand for new higher denomination notes, as the value of existing ones plummeted, was reflected in the rapid increase in the numbers of noughts on money printed over the past two years.
In August 2006, the central bank issued a $5 note. A $500,000 note followed a year later. On 2 May 2008, a $500m banknote hit the streets but was swiftly near worthless, and $5bn, $25bn and $50bn notes followed just a fortnight later.

Unit 3: Inflation at 11 year high

These BBC article and Ch4 video clip, explain why CPI is at an 11 year high and the problems the BoE faces in trying to contain its increase

http://news.bbc.co.uk/1/hi/business/7506940.stm article
http://link.brightcove.com/services/player/bcpid1184614595?bctid=1668522825 video

Unit 3: The link between economic growth and unemployment

Two tables in this post by Geoff Rilet are really useful inseeing the link between these 2 government objectives

http://www.tutor2u.net/blog/index.php/economics/comments/turning-points-for-the-labour-market/

This BBC article explains the latest rise in unemployment

http://news.bbc.co.uk/1/hi/business/7508816.stm

a) Explain the time lagged link between changes in economic growth and the resulting changes in unemployment
b) Explain the latest rise, and recent trend, in unemployment

Unit 1: Demand for Magners cider

An interesting article from the BBC explaining how demand for cider has changed

http://news.bbc.co.uk/1/hi/business/7501136.stm

a) What reasons does the article suggest for the rise and fall in the demand for Magners cider?

Unit 2: Government legislation to reduce negative externalities: Rubbish in Japan

A great BBC video clip and article about a zero waste town in Japan

http://news.bbc.co.uk/1/hi/sci/tech/7499954.stm video
http://news.bbc.co.uk/1/hi/sci/tech/7502071.stm article

a) How does the council legislation reduce the negative externalities associated with waste?
b) What benefits are there to the town citizens of this system?
c) Comment on the likely success of such a scheme if it was introduced to your town/village/city

Unit 1: Demand for bullet proof cars in Brazil

An interesting video from the BBC

http://news.bbc.co.uk/1/hi/world/americas/7503139.stm

a) Using demand theory, explain why there has been a rise in the demand for bullet proof cars in Brazil

Unit 3: The effect of an appreciating exchange rate on China

An interesting report from thee BBC on the efect of the rising Yuan

http://news.bbc.co.uk/1/hi/business/7499267.stm

a) Why will an appreciating yuan reduce exports?
b) What will be the effect on imports?
c) What will the effect be on aggregate demand?
d) Using an AD/AS diagram, explain the likely effect on the Chinese economy of this appreciation
e) Comment on why the effects might not be as you suggest

Unit 3: The housing slump and negative multiplier effects

This article from Geoff Riley explains why the decline in the housing market may have far more wide ranging effects on the economy.

http://www.tutor2u.net/blog/index.php/economics/comments/housing-slump-and-negative-multiplier-effects/

Then watch the BBC video clip

http://news.bbc.co.uk/1/hi/business/7499432.stm

a) Explain how the multiplier effect can be applied to this decline in the housing sector and why it will lead to a further unemployment rise in the UK.

Unit 3: Carbon trading expands to involve aviation in the EU

A clip from the BBC and two articles from the Guardian about the expansion of the Carbon trading scheme with the inclusion of aviation

http://news.bbc.co.uk/1/hi/business/7496668.stm video
http://www.guardian.co.uk/travel/2008/jul/09/travelnews.theairlineindustry
http://www.guardian.co.uk/environment/2008/jul/09/carbonemissions.carboncapturestorage

a) Assess the likely success of using tradable permits as a means of reducing aviation CO2 emissions

Unit 3: Is the UK heading for recession?

This BBC clip questions whether the UK is heading for a recession

http://news.bbc.co.uk/1/hi/business/7495183.stm

a) What is a recession?
b) What happens to aggregate demand in a recession?
c) Why does unemployment rise in a recession?
d) What effect does rising unemployment have in the economy?
e) What actions could the government take to break this downward spiral?

Unit 2: Reducing negative externalities associated with rubbish and landfill

This BBC article reports an imaginative scheme to reduce landfill

http://news.bbc.co.uk/1/hi/uk/7497398.stm

a) How would this system work to reduce the market failure?
b) What is the difference between this system and taxing people by the amount of rubbish they produce?
c) Evaluate the extent to which either scheme would be likely to succeed

Unit 1: Cross elasticity of demand: The impact of rising petrol prices in India

A great little video clip from the BBC

http://news.bbc.co.uk/1/hi/business/7492855.stm

a) Calculate the XED for gas conversions as petrol prices rise

Unit 3: Fiscal Drag

From Geoff Riley comes this example of fiscall drag in action in the UK economy

http://www.tutor2u.net/blog/index.php/economics/comments/fiscal-drag/

Unit 1: A market in disequilibrium: Allotments

From Geoff Rileys blog comes this interesting tale of allotments in the UK

http://www.tutor2u.net/blog/index.php/economics/comments/cross-elasticity-demand-for-allotments/

a) Using a S&D diagram, show how the market for allotments is in disequilibrium
b) Which factors have caused the demand for allotments to increase and shift the D curve to the right?
c) Using a S&D diagram, explain the effect on the market of this increased demand

Unit 3: The multiplier effect of increased Government spending: Aircraft carriers

The BBC reports that the purchase of 2 huge aircraft carriers will result in more money going to 7 firms in different locations around the UK

http://news.bbc.co.uk/1/hi/england/7490041.stm

a) What effect will this purchase by the Government have on aggregate demand?
b) How could the orders to the 7 firms result in multiplier effects in the regions identified on the map?
c) What would determine how large the multiplier effect would be in each region?

Unit 3: Defining a recession

This Guardian article summarises nicely what a recession is

http://www.guardian.co.uk/business/2008/jul/04/economicgrowth.economics

Unit 3: Falling discretionary income in the UK

An interesting post on Geoff Riley's tutor2u blog about falling discretionary income in the UK

http://www.tutor2u.net/blog/index.php/economics/comments/discretionary-income-takes-a-battering1/

a) Using an AD/AS diagram, explain the likely effect on the UK economy of this fall in discretionary income
b) Why might your predicted effects not actually occur?

This CH4 video shows the effect on companies as consumer incomes fall

http://link.brightcove.com/services/player/bcpid1184614595?bctid=1646218576

Unit 1: Falling disposable incomes and the efect on demandemand

Two stories showing how demand falls as disposable incomes fall

Cars in the UK http://news.bbc.co.uk/1/hi/uk/7489877.stm

a) Why do you think the sales of diesel cars may have increased if the overall demand as down?

Coffee in the USA http://news.bbc.co.uk/1/hi/business/7484646.stm

Unit 2: The external costs of crime

The BBC reports the external cost of crime

http://news.bbc.co.uk/1/hi/uk/7489877.stm

a) Why is this £15bn an external cost?
b) To what extent would you take this to be an acurate figure?

Unit 2: Australia's proposed emissions trading scheme

The BBC reports plans in Australia to start a carbon emissions trading scheme

http://news.bbc.co.uk/1/hi/world/asia-pacific/7489817.stm video
http://news.bbc.co.uk/1/hi/world/asia-pacific/7489411.stm article

a) How would such a scheme work?
b) What drawbacks would there be to the introduction of such a scheme?
c) Comment on the likely success of this scheme compared to other actions the Australian government could take

Unit 1: Rising costs and rising prices: Dry cleaners

This article from the BBC explains the hard times drycleaners in the USA are facing

http://news.bbc.co.uk/1/hi/business/7482554.stm

a) Using a S&D diagram, explain what has happened in the drycleaning market

Unit 2: The effect of the smoking ban in the UK

The BBC reports that many smokers have given up since the smoking ban

http://news.bbc.co.uk/1/hi/health/7481594.stm

a) How has this legislation reduced the market failure?
b) What unintended negative consequences have ther been on the UK economy as a result of the ban? This clip expands on the problems

http://news.bbc.co.uk/1/hi/uk/7482716.stm

Unit 1: Cross elasicity of demand: The price of oil and the demand for scooters

Another interesting post from Geoff Riley on XED ad from the BBC on American car sales

http://www.tutor2u.net/blog/index.php/economics/comments/oil-prices-and-demand-for-scooters-cross-elasticity/

http://news.bbc.co.uk/1/hi/business/7482963.stm

a) Define XED
b) Would the XED for scooters/small Honda cars in response to a rise in the price of oil be +ve or -ve?
c) What does this tell you about the relationship?
d) Would the XED for SUV's/pick up trucks in response to a rise in the price of oil be +ve or -ve?
e) What about the XED for the complements for scooters mentioned in the article?

For those of you who would like to follow up on these ideas there is this great article from the Guardian on how American consumer behaviour is changing as the result of soaring petrol prices in the USA

http://www.guardian.co.uk/environment/2008/jul/02/fossilfuels.travelandtransport

Unit 3: The impact of US fiscal policy on economic growth

An interesting article from the BBC showing the effect of the recent tax rebates in the USA on economic growth

http://news.bbc.co.uk/1/hi/business/7478711.stm

a) What was the fiscal boost the American government gave the economy?
b) Using an AD/AS diagram and the AD formula, explain how this has lead to the increased economic growth
c) Explain why the rise in economic growth has not been as high as some economists predicted

Unit1: Elasticity of supply: Scotch whisky

This Times article suggests the supply of whisky is running out in the face of rising demand

http://www.timesonline.co.uk/tol/life_and_style/food_and_drink/article4228200.ece

a) Why is supply likely to be inelastic according to the article?
b) Using a S&D diagram, show the effect on consumers of a rise in the world demand for scotch whisky

Unit 2: The benefits of international trade: China

This BBC video outlines the benefits to the UK of international trade

http://news.bbc.co.uk/1/hi/business/7474580.stm

a) What are the benefits to the UK of international trade with China?
b) Why might China's inflation rate be rising?
c) What effects could that inflation have on the UK

Unit 1: More fines for collusion in the air freight industry

The BBC reports more fines for collusion in the air freight industry

http://news.bbc.co.uk/1/hi/business/7475946.stm

a) How would you describe the air freight industry in terms of market structure?
b) What was the economic motivation for the firms to collude?
c) To what extent do you think such fines will deter future collusion?

Unit 2: Positive externalities from developing Inverness harbour

The BBC reports that the redevelopment of Inverness Harbour is almost complete

http://news.bbc.co.uk/1/hi/scotland/highlands_and_islands/7473551.stm

a) What private costs are associated with the development?
b) What private benefits would there be associated with the development?
c) What external benefits result from the development?
d) Would there be any external costs resulting from the project? If so, what would they be?

Unit 2: Carbon taxes to reduce negative externalities

From the BBC comes this opinion piece on why we need carbon taxes to reduce global warming and the associated externalities

http://news.bbc.co.uk/1/hi/sci/tech/7471197.stm

a) Why is it argud we need carbon taxes?
b) To what extent do you believe the proposed $1 per tonne tax would be successful?

Unit 2: Inequality and poverty: Tax credits to overcome poverty

From CH4 comes this excellent video about poverty in the UK

http://link.brightcove.com/services/player/bcpid1184614595?bctid=1626034868

Unit 1: Price elasticity of demand for air travel

The BBC reports that BA is introducing different fuel surcharges for different classes of passengers

http://news.bbc.co.uk/1/hi/business/7468633.stm

a) Explain how the concept of PED may have influenced the decision to introduce different fuel surcharges for different classes of passengers

Unit 3: The link between economic growth and unemployment

THe tutor2u blog has this good article clearly showing the link between ecomic growth and unemployment

http://www.tutor2u.net/blog/index.php/economics/comments/labour-shake-out/

Unit 3: Macroeconomic data: The UK economy squeezed

From the BBC comes this data on how the Uk economy is being squeezed

http://news.bbc.co.uk/1/hi/business/7457886.stm

Unit 3: Protectionism in the US steel pipe industry

The BBC reports the USA will impose tariffs on Chinese imports of steel pipes

http://news.bbc.co.uk/1/hi/business/7466798.stm

a) Why is the USA imposing the tariffs?
b) What effect will this have on US consumers of steel pipes?
c) What will determine whether the tariff will be sucessful or not?

Unit 3: Theffects of inflation on disposable income and savings

A good article from Geoff Riley on the effects of inflation on individuals

http://www.tutor2u.net/blog/index.php/economics/comments/inflation-the-silent-thief/#extended

Unit 3: Problems with measuring inflation

This BBC article highlights problems associated with compiling a single figure for the UK inflation rate

http://news.bbc.co.uk/1/hi/business/7458823.stm

a) Outline the problems identified in the article
b) Given the problems, why compile an inflation index?

Unit 2: Information failure: Alcohol consumption

The BBC has the latest government initiative to reduce youngsters excessive alcohol consumption

http://news.bbc.co.uk/1/hi/uk/7457746.stm

a) To what extent do you believe such public information films reduce market failure?
b) Suggest 2 reasons why the government is keen to reduce the market failure

Unit 3: UK inflation outside target range at 3.3%

This BBC article and video reports CPI inflation now outside the target range

http://news.bbc.co.uk/1/hi/business/7458209.stm article
http://news.bbc.co.uk/1/hi/business/7458861.stm video

These CH4 video clips go in to more detail

http://link.brightcove.com/services/player/bcpid1184614595?bctid=1614715546
http://link.brightcove.com/services/player/bcpid1184614595?bctid=1614611866

a) What is the target for CPI inflation?
b) What sort of inflation is the UK suffering?
c) Why do people appear to think inflation is much higher than the official rate?
d) Explain to them why their perceptions may be wrong and the offial rate may be correct
e) CH4 video: Why does the economist say higher interest rates are the only way of reducing inflation?
f) What conflicting macroeconomic objectives does the government face

Unit 2: Further government action to reduce the market failure associated with excessive alcohol consumption by youngsters

The BBC reports likely proposals by the Scottish government to reduce excessive alcohol consumption by youngsters

http://news.bbc.co.uk/1/hi/scotland/7455391.stm

and here are the actual proposals

http://news.bbc.co.uk/1/hi/scotland/7458102.stm

a) How does the free market fail in this instance?
b) Outline the arguments for and against this extension of legislation to reduce the market failure
c) Discuss the likeyhood of such a policy reducing the market failure

Unit 2: Carbon trading: How it works and associated problems

A brilliant radio programme from the BBC World Service One Planet series

http://www.bbc.co.uk/mediaselector/check/worldservice/meta/tx/oneplanet?nbram=1&nbwm=1&size=au&lang=en-ws&bgc=003399&ls=p9

a) How would an ideal carbon trading system work?
b) What problems have been encountered with the systems tried so far?

Unit 2: Allocative efficiency: Pay as you go car insurance

The BBC reports that NU is abandoning its PAYG car insurance for young drivers

http://news.bbc.co.uk/1/hi/programmes/moneybox/7453546.stm

a) How does this decision reflect the economy becoming more allocatively efficient?

Unit 1: The price of corn

The BBC reports the price of corn is rising

http://news.bbc.co.uk/1/hi/business/7447582.stm

a) Using a S&D diagram, explain why the price of corn is rising

Unit 3: Rising unemployment figures

The latest figures show unemployment in the UK on an upward trend

http://news.bbc.co.uk/1/hi/business/7447791.stm

Unit 1: Demand for bottled water

The BBC reports rising demand for bottled water

http://news.bbc.co.uk/1/hi/business/7452381.stm

a) Use demand theory to explain the increase in demand
b) Show on a diagram the effect of rising demand

Unit 2: Government action to overcome market failure: Sunbeds and under 18's

The BBC reports that uner 18's are to be banned from using commercial sunbeds

http://news.bbc.co.uk/1/hi/wales/7448973.stm

a) How is the free market in sunbeds failing?
b) What does the article suggest is the cause of the market failure?
c) Why is the government stepping in and introducing legislation?
d) What punishments will the government impose?
To what extent do you believe such a policy will reduce the market failure regarding under 18's consumption of sunbeds?

Unit 2: Costs and benefits associated with the Severn barrage

This BBC clip and associated article highlights the 2 sides of the argument regarding the proposed Severn barrage project

http://news.bbc.co.uk/1/hi/sci/tech/7450882.stm video

http://news.bbc.co.uk/1/hi/wales/7448973.stm article

a) Explain a private cost asociated with the barrage
b) Explain a private benefit asociated with the barrage
c) Explain an external cost asociated with the barrage
d) Explain an external benefit asociated with the barrage
e) Environmentalists suggest wind generation as an alternative: Explain how cost benefit analysis could be used to decide which project(s) the government should fund

Economies of scale: Greenhouses in Kent

From the BBC, a wonderful video showing a great example of economies of scale in action

http://news.bbc.co.uk/1/hi/uk/7452454.stm

a) Explain what economies of scale are
b) Explain what sort of economies of scale will result from growing tomatoes on this scale

Unit 1: Pricing in car parks

The BBC reports an innovative approach to pricing in a LOndon car park

http://news.bbc.co.uk/1/hi/england/london/7445242.stm

a) Using a S&D diagram, explain how these different prices would be determined

Unit 3: The link between falling aggregate demand and rising unemployment

This BBC article reports that as the housing market slows the numbers unemployed will rise

http://news.bbc.co.uk/1/hi/business/7440686.stm

a) Explain why unemployment is likely to rise as the economy slows
b) Will this be true for all industries?

Unit 2: Efficiency; restructuring in the insurance industry

Two articles from the BBC seem to indicate that competition in the insurance industry is causing firms to seek greater economic efficiency

http://news.bbc.co.uk/1/hi/business/7440733.stm

http://news.bbc.co.uk/1/hi/business/7439589.stm

a) What type of efficiency will these job losses lead to?
b) Why are the 2 firms following this course of action?

Unit 1: Cross elasicity of demand: 4x4's

This BBC clip explains the change in car buying by UK car buyers in response to rising fuel prices
http://news.bbc.co.uk/1/hi/business/7438087.stm

This Ch4 clip shows the effect on Hummer sales

http://link.brightcove.com/services/link/bcpid1184614595/bctid1588489570

a) Explain how the concept of cross elasticity of demand can be used to explain the changing demand for (i) 4x4's such as the Hummer and (ii) smaller fuel efficient cars

Unit 1: The 2p sausage!

The BBC reports ASDA selling sausages for 2p each

http://news.bbc.co.uk/1/hi/uk/7434464.stm

a) What is the economics behind ASDA selling sausages for 16p a pack?
b) As ASDA are launching this line as the economy goes into an economic downturn, what sort of good does this suggest 2p sausages are?
c) Use economic analysis to explain what sort of sauasages in ASDA might see a decline in sales due to the economic downturn and the launch of the 16p pack

Unit 3: Protectionism: Korean beef import restrictions

From the BBC comes this interesting video on why Korea resticts USA beef imports

http://news.bbc.co.uk/1/hi/world/asia-pacific/7432752.stm

a) What sort of protectionist measure is Korea using?
b) Why are they imposing this measure?
c) Who in Korea and the USA benefits and suffers from this protectionism?

Unit 2: Using Cost Benefit Analysis in economics

From Geoff Riley at tutor2u comes this great article on how CBA can be used in economics

http://www.tutor2u.net/blog/index.php/economics/comments/using-the-cost-benefit-principle-in-your-as-exam-tomorrow/

Unit 2 Government intervention revision article

From tutor2u comes this good revision guide on how govt's intervene when markets fail and some points to consider when evaluating the success of such policies

http://www.tutor2u.net/blog/files/Revision_Government_Intervention.pdf

Unit 1: The supply of milk

A good article from the Times which helps explain the upward sloping supply curve

http://business.timesonline.co.uk/tol/business/industry_sectors/consumer_goods/article4029326.ece

a) Define supply
b) What does the article say is happening to the supply of milk as the price of milk for farmers falls?
c) Using the definition, explain how can this be the case as cows don't stop producing milk if the price the farmer gets falls!

Unit 2: Demerit goods:More legislation to reduce the availability of cigarettes?

This BBC clip outlines potential new plans to reduce cigarette consumption

http://news.bbc.co.uk/1/hi/health/7428914.stm

More details of the plan and a video of the new information campaign are on this BBC article

http://news.bbc.co.uk/1/hi/health/7427141.stm

a) To what extent do cigarettes meet the 2 criteria of a demerit good?
b) To what extent do you believe the proposals will reduce the market failure associated with cigarette consumption?
c) What other actions do government take to reduce cigarette consumption?

Unit 3: Tariffs in Mexico

The BBC reports that Mexico is to reduce tariffs on food imports

http://news.bbc.co.uk/1/hi/business/7420023.stm

a) Why are Mexico reducing the tariffs?
b) Why do you believe they were imposed originally?
c) Why have they already been eliminated for trade with the USA and Canada
d) Using a S&D diagram, show the effect on Mexican food prices of a reduction in the tariff

Unit 2: Rising costs and rising prices

The BBC reports that taxi fares in Belfast are due to rise

http://news.bbc.co.uk/1/hi/northern_ireland/7419885.stm

a) Using a S&D diagram, explain why taxi fares are likely to rise

Unit 2: Legislation to reduce market failure: Cigarette displays

The BBC reports plans in Scotland to ban the display of cigarettes and possibly ban the sale of packets of 10

http://news.bbc.co.uk/1/hi/scotland/7419206.stm

a) How does the cigarette market fail?
b) How likely would these 2 proposals be to reduce the market failure?

Unit 2: Tradable permits: Individual allocations for carbon trading

The BBC reports that MP's are suggesting looking further at the idea of personal carbon limits with trade in them

http://news.bbc.co.uk/1/hi/uk_politics/7419724.stm

a) How would the system work?
b) Why might this be a better way of decreasing carbon emissions than increasing taxation
c) What major disadvantages and obstacles would there be to introducing the scheme

Unit 2: Negative externalities asociated with excess alcohol consumption

A frightening BBC video clip, and associated article, on the negative externalities (not to mention the private costs) associated with excessive alcohol consumption

http://news.bbc.co.uk/1/hi/health/7414898.stm video
http://news.bbc.co.uk/1/hi/health/7414322.stm article

a) What are the negative externalities associated with excessive alcohol consumption?
b) Why, in economic terms, is there excessive alcohol consumption?
c) What actions could the government take to reduce the market failure and lead to a more efficient allocation of resources

Unit 3: Disadvantages of imposing tariffs

From tutor2u comes this interesting insight into thenegative consequences of imposing tariffs on imports

http://www.tutor2u.net/blog/index.php/economics/comments/tariff-taken-to-the-cleaners/

a) Given the consequences outlined, what possible arguments could there be for keeping the tariff?

Unit 3: Inflation: Is the CPI an accurate measure

An interesting article from the financial times explaining why many people don't regard the CPI as an accurate reflection of their inflation rate

http://www.johnkay.com/in_action/549

a) Having read the article, to what extent do you think the CPI is an accurate reflection of inflation in the economy?

Unit 3: The Balance of Payments in 2007

Another good BoP summary from tutor2u; very useful for revision

http://www.tutor2u.net/economics/presentations/ukbofp2007/default.html

Unit 2: Efficiency: Revision notes

Another good revision note from tutor2u on the idea of economic efficiency

http://www.tutor2u.net/blog/files/Revision_Efficiency_Types_Exam_Uses.pdf

Unit 1: The price of renting a property

The BBC reports that millions of people who rent their homes are facing big increases in the amount they pay each month.

http://news.bbc.co.uk/1/hi/uk/7409966.stm video

a) Using supply and demand analysis (including a diagram), explain why rents are rising
b) Using supply and demand analysis (including a diagram), explain why rents for flats in Leeds are falling

Unit 2: Reducing consumption of demerit goods: A smoking ban in Turkey

The BBC reports that Turkey has some of the world's highest smoking figures and a new ban is being widely flouted

http://news.bbc.co.uk/1/hi/world/7409705.stm: video

a) Why, in economic terms, is the smoking ban being introduced?
b) How successful do you think the ban might be when fully introduced in a years time?
c) How else could the Turkish government reduce the overconsumtion and misallocation of scarce resources?
d) What adv and disadv would there be to this approach?

Unit 2: Public and private goods: Revision

From Geoff Riley at tutor2u comes this great little revision summary on public and private goods

http://www.tutor2u.net/blog/files/Revision_Public_Private_Goods.pdf

Unit 2: Information failure: How many units in a glass of wine?

This BBC clip and related article outlines the problem of information failure when deciding how much you should drink

http://news.bbc.co.uk/1/hi/health/7407747.stm video

http://news.bbc.co.uk/1/hi/health/7399192.stm aticle including 2 of the public information videos

a) If there is information failure, what sort of market failure does the alcohol market represent?
b) To what extent do you believe the public information campaign is likely to reduce the market failure?

Revision videos for AS diagrams

Thanks to the help of a couple of students, I've posted a set of 10 videos on youtube that cover most of the diagrams needed for the AS Economics units (OCR, but should be similar for other exam boards). They can be found at

http://www.youtube.com/user/BrynJonesOnline

I'd welcome any feedback you leave (on youtube or direct to me at bjones@longroad.ac.uk) on how useful you think they are and other topics you think I could do similar videos for

Unit 3: What keeps inflation rising?

This BBC clip is a little on the simple side, but you should be able to get the economics out of it

http://news.bbc.co.uk/1/hi/uk/7399738.stm video

a) What sort of inflation is the UK apparently suffering from?
b) To what extent is monetary policy suitable to tackle this problem?

Unit 3: Conflicting macroeconomic objectives: The current position of the UK

This BBC clip outlines the position of inflation, unemployment and economic growth in the UK economy

http://news.bbc.co.uk/1/hi/business/7400775.stm video

This is Mervyn Kings statement about the outlook for inflation; not very rosy to say the least!

http://news.bbc.co.uk/1/hi/business/7400402.stm video
http://news.bbc.co.uk/1/hi/business/7400074.stm article and analysis

Unemployment has also risen

http://news.bbc.co.uk/1/hi/business/7400306.stm video
http://news.bbc.co.uk/1/hi/business/7400079.stm article

a) What is happening to the macroeconomic objectives of economic growth, inflation and unemployment?
b) What is the conflict between the position of these objectives for the BoE in setting interest rates?

Unit 2: Negative externalities asociated with car pollution

An interesting report from the BBC outlining another negative externality that results from traffic pollution

http://news.bbc.co.uk/1/hi/health/7396733.stm

a) Why would these blood clots be negative externalities?
b) How does the market fail
c) List 3 other negative externalities that arise from traffic pollution
d) Suggest an action the government could take to reduce this market failure and assess how successful it would be

Unit 3: Inflation in China

From the BBC comes an article and a video about rising inflation in China

http://news.bbc.co.uk/1/hi/business/7395416.stm article

http://news.bbc.co.uk/1/hi/business/7395738.stm video

a) What evidence is there from the 2 sources of cost push and demand pull elements to the inflation?
b) What is meant by the quote "China will export its inflation" and what effect will this have on the UK?
c) What actions could the Chinese govt take to try and reduce the inflation rate

Unit 3: Inflation

From tutor2u comes this revision presentation on inflation. Some of it is aimed at A2 students but the last 3 slides are particularly useful in debating what measure should be used and the weakness of any measure

http://www.tutor2u.net/blog/index.php/economics/comments/revision-inflation-targets-and-measurement/

The Guardian had its FAQ business section on inflation this week; it contains a lot of useful information

http://www.guardian.co.uk/business/2008/may/09/inflation.bankofenglandgovernor1

Unit 3: The macroeconomic performance of the UK economy

From Geoff Riley at tutor2u comes this comprehensive summary of the UK macroeconomy; useful for putting policies in context

http://www.tutor2u.net/blog/index.php/economics/comments/uk-economy-revision-presentation/

Unit 3: The effect of a depreciating exchange rate on trade

This BBC article says that the US trade deficit shrank by more than expected in March as the weak dollar led to a surge in exports and a fall in imports

http://news.bbc.co.uk/1/hi/business/7392496.stm

a) Using a numerical example, explain why exports rose and imports fell

Unit 2: Tradable permits: Carbon trading in action

This BBC article shows how the carbon market is growing, how it should work and some of the drawbacks

http://news.bbc.co.uk/1/hi/business/7388035.stm

Unit 3: Consumption and its determinants

This BBC article explains how consumption may be effected by rising food and fuel prices leaving les for discretionary spending by consumers

http://news.bbc.co.uk/1/hi/business/7386624.stm

Unit 2: Demerit goods: Cannabis reclassified

The BBC reports in this video and article that cannabis is to be reclassified as a class B drug

http://news.bbc.co.uk/1/hi/uk/7387173.stm

http://news.bbc.co.uk/1/hi/uk_politics/7386889.stm

a) What are the 2 criteria for a demerit good?
b) To what extent is cannabis a demerit good?
c) To what extent do you think this stricter regulation to try and limit supply will decrease the market failure?
d) To what extent do you think a stratagy which aimed to reduce demand for cannabis by imposing a tax on cannabis and/or improving information to cannabis users would be more succesful in reducing the market failure?

Unit 1: Cross elasicity of demand: The price of oil and the demand for..........camels!

From the blog of the Harvard economist Greg Mankiw, comes this great example of cross elasticity of demand

http://gregmankiw.blogspot.com/2008/05/cross-price-elasticity-of-demand-ii.html

a) What is the formula for cross ED?
b) In this example, would the figure be positive or negative?
c) What therefore is the relationship between the price of oil and the demand for camels?
d) Would you expect the number to be more or less than one? Explain your answer
e) How do you think the XED number has changed as the price of oil has risen rapidly over the past year?

Unit 1: What shifts the supply and demand curves?

From the tutor2u blog comes this post including a comprehensive list of what shifts S&D; ideal for revision

http://www.tutor2u.net/blog/index.php/economics/demand-and-supply-revision-challenge/#When:09:46:00Z

Unit 3: Expansionary macro policy in action in the USA

A great clip from the BBC showing how the US authorities are trying to stimulate the economy

http://news.bbc.co.uk/player/nol/newsid_7370000/newsid_7376600/7376663.stm?bw=bb&mp=wm&news=1&nol_storyid=7376663&bbcws=1

a) What policies are the US authorities using?
b) How should they stimulate the US economy?
c) Draw a diagram to show this effect
d) Why might the policies not be effective?

Unit 2: Market dominance: Collusion in the supermarket market?

The BBC reports yet another investigation by the OFT into practices by the major supermarkets

http://www.guardian.co.uk/business/2008/apr/25/tobaccoindustry.regulators

This adds to the ongoing investigations involving the supermarkets

Unit 1: The price of wheat

The BBC reports the price of wheat falling from record highs

http://news.bbc.co.uk/1/hi/business/7367757.stm

a) Using a S&D diagram, explain why the price of wheat has fallen

Unit 3: Fiscal policy in action in the USA

These BBC reports show the use of fiscal policy in the USA

http://news.bbc.co.uk/1/hi/business/7367995.stm

http://news.bbc.co.uk/1/hi/business/7371755.stm

a) Why is this an example of fiscal policy?
b) Why are Americans receiving these tax rebates?
c) Using an AD/AS diagram, explain the expected effect on the US economy and the 4 macroeconomic objectives
d) Explain why this may not be the actual outcome

Unit 2: Market dominance: Collusion in the cigarette market?

This BBC video and associated report (and a guardian article)say that the Office of Fair Trading has alleged tobacco firms and supermarkets have been engaged in unlawful practices linked to retail prices for tobacco.

http://news.bbc.co.uk/1/hi/business/7367168.stm

http://news.bbc.co.uk/1/hi/business/7366348.stm

http://www.guardian.co.uk/business/2008/apr/25/tobaccoindustry.regulators

a) How does the market fail?
b) What sort of efficiency will not be achieved if the allegations are proved to be true?
c) What actions could the OFT take if the allegations are proven?