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?

Unit 3: Aggregate supply and the working population

This BBC article says that the size of the working populaton in Japan is shrinking

http://news.bbc.co.uk/1/hi/world/asia-pacific/7360077.stm

a) If the report is true, draw an AD/AS diagram to show the effect on the Japanese AS curve and the effect on the Japanese macro economy
b) Suggest 3 reasons why this might not actually happen

Unit 2: Market dominance; BAA and airport operation

This BBC clip says that the CC are to investigate market dominance in the airports of the UK owned by BAA

http://news.bbc.co.uk/1/hi/business/7361447.stm

The Guardian article also has an article on this

http://www.guardian.co.uk/business/2008/apr/22/baa.competitioncommission

a) How does the free market fail?
b) Why is it argued that BAA is neithe rproductively nor allocatively efficient?
c) What actions could be taken if the final CC report finds BAA "guilty"

Unit 1: Increasing costs of production and the supply of flour

This BBC clip shows the impact on supply of an increase in raw material prices

http://news.bbc.co.uk/1/hi/business/7361412.stm

a) Using a diagram, explain how the increasing price of wheat leads to an increase in the price of flour
b) Do you think the supply of wheat is elastic or inelastic? Explain tour answer

Units 2&3: Labour market failure and supply side solutions

This revision guide from tutor2u is aimed at A2 students but has some really good stuff on policies to overcome immobility that can also be used as supply side policies for unit 3

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

Unit 3: The problems of measuring inflation

This BBC clip illustrates the difficulty in coming up with a single % figure for inflation

http://news.bbc.co.uk/1/hi/uk/7359651.stm

a) Why, if essential household expenditure is rising at over 5% (according to the clip), is official inflation only 2.5%?

Unit 3: Excessive growth and inflation in China

This Guardian article shows the difficulty in simultaneously meeting different macroeconomic objectives

http://www.guardian.co.uk/business/2008/apr/17/economics.china

a) What do you think is the cause of the inflation?
b) Which sort of inflation is China therefore suffering?
c) What actions could the Chinese govt take to reduce the inflation?
d) What problems would this cause in China?

Unit 2: The use of subsidies to encourage the take-up of solar panels

A fairly long article from the Guardian environment section on how Germany has encouraged the use of solar panels so that now 15% of their power comes from this source. If you are interested in renewable energy, it's a fascinating article

http://www.guardian.co.uk/environment/2008/apr/16/renewableenergy.windpower

Unit 2: Market failure; Newsnight video on rubbish and possible solutions

The BBC as part of a newsnight series has this clip on food waste

http://news.bbc.co.uk/1/hi/programmes/newsnight/7349716.stm

a) What sort of market failure does waste in the dustbin represent?
b) Which of the 4 possible solutions (taxation, legislation, tradable permits, subsidies) does the clip suggest the government are currently using?
c) Using diagrams, explain how successful government actions reduces the market failure

Unit 2: Market dominance; collusion in the construction industry

The Office of Fair Trading (OFT) has accused 112 construction companies of rigging bids for contracts according to this BBC article.

http://news.bbc.co.uk/1/hi/sci/tech/7351766.stm

a) How is the free market failing according to the OFT?
b) What actions can the OFT take to reduce the market failure?
c) To what extent do you believe the OFT can be successful in combatting/deterring acts such as collusion and price fixing?

Unit 2: Market failure:Biofuels; the defence

The President of Brazil (one of the world's largest producers of biofuels) responds to recent critsisms of the move to biofuels in this BBC article

http://news.bbc.co.uk/1/hi/sci/tech/7351766.stm

Unit 3: the costs and benefits of economic growth in China

This BBC clip highlights the costs and benefits of China's economic growth

http://news.bbc.co.uk/1/hi/sci/tech/7347631.stm

a) What are the costs and benefits of economic growth highlighted in the clip?

Unit 3: Hyperinflation in Zimbabwe

The latest figures show Zimbabwe's inflation rate up to 165000%!!!! What does this actually mean? Well, prices double in a little under 3 weeks!

This tutor2u blog entry puts this figure in context
http://www.tutor2u.net/blog/index.php/economics/comments/zimbabwe-descends-into-hyperinflation/#extended

and the bBC also covers the story
http://news.bbc.co.uk/1/hi/business/7351086.stm

Unit 3: Unemployment at 37 year low

The BBC reports that UK registered unemployment is at the lowest level since 1971

http://news.bbc.co.uk/1/hi/business/7350042.stm

a) Why is there a difference between the 2 measures of unemployment quoted?

Unit 2: Information failure: Calorie counts on restaurant menus

Authorities in New York have put forward plans requiring restaurant chains to declare the calories of every item on their menus according to this BBC clip

http://news.bbc.co.uk/player/nol/newsid_7340000/newsid_7347700/7347728.stm?bw=bb&mp=wm&asb=1&news=1&bbcws=1

a) What sort of action to correct market failure are the authorities taking?
b) What is the market failure they are tring to correct?
c) To what extent do you believe the action will succeed in reducing the market failure?

Unit 2: Inequality in incomes

From tutor2u comes this revision aid; it's a little too detailed for AS but the section near the end on government policies is really good

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

Unit 2: Information failure: How much wine do you drink?

This BBC article and asociated clip shows how consumers often have an inaccurate idea of how much alcohol they are consuming due to different size measures in different bars

http://news.bbc.co.uk/1/hi/health/7343737.stm
http://news.bbc.co.uk/1/hi/health/7343932.stm

a) How does the free market fail with wine consumption according to the clip/article?
b) In what other way does the market fail in the longer term?
c) What actions could the government take to reduce the market failures

Unit 3: Monetary policy, hot money and exchange rates

This BBC article clearly shows the importance of hot money flows in determining the exchange rate

http://news.bbc.co.uk/1/hi/business/7340272.stm

a) Using a S&D diagram, explain how the actions of speculators as a result of the decrease in interest rates leads to a fall in the exchange rate
b) What is the likely effect on imports, exports and the balance of trade in goods and services?

Unit 3: Monetary policy; the effect of decreasing interest rates on the economy

This BBC clip shows the effect of a cut in interest rates on aggregate demand

http://news.bbc.co.uk/player/nol/newsid_7340000/newsid_7340700/7340759.stm?bw=bb&mp=wm&asb=1&news=1&bbcws=1

a) What conflicting objectives did the BoE face in deciding whether to change rates?
b) Why did they decrease rates?
c) Using an AD/AS diagram, explain the likely effect on consumption and investment (and therefore AD) and the macreoeconomic objectives
d) What offsetting effect is likely to diminish this expected effect
e) What effect will the interest rate cut have on the exchange rate and so trade in goods and services?

Unit 2: Information failure: Food additives

This BBC clip explains that certain food additives are to be removed

http://news.bbc.co.uk/1/hi/health/7341481.stm

a) Explain the type of market failure represented by these food additives
b) Use a diagram to explain how the free market fails
c) What solutions are suggested? How successful do you think the voluntary ban would be? What benefits would come from a Europe wide ban?

Unit 2: Negative externalities asociated with economic growth: Plastic

This BBC clip shows the impact of rubbish, in this case plastic, on the environment

http://news.bbc.co.uk/1/hi/sci/tech/7339737.stm

a) Why is this plastic waste an example of the market failing as a good with negative externalities?
b) What actions has/could the govt take to reduce the market failure?

Unit 2: Revision on progressive and regressive taxes

Another revision post from Geoff Riley at tutor2u. This one goes beyond what you need for AS, but has a lot of useful stuff

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

Unit 3: Revision notes for cost push and demand pull inflation

An excellent, truely comprehensive revision of inflaton from Geoff riley at tutor2u. Use it!!!!!

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

Unit 3: Sources of cost push inflation

This chart from tutor2u shows the rising cost of imported raw materials and food into the UK

http://www.tutor2u.net/blog/files/Chart_of_the_Day_(Import_Prices).ppt#257,2,Slide 2

a) How might the depreciation of the £ have led to these rises?
b) Using an AD/AS diagram, explain how these rises may lead to cost push inflation
c) Assuming no change in AD, explain the consequences for the UK economy of a rise in inflation interms of the other macroeconomic objectives

Unit 3: Fiscal policy in Spain

Todays Guardian carries this great example of expansionary fiscal policy in action

http://www.guardian.co.uk/world/2008/apr/08/spain1

a) Explain why this is an example of expansionary fiscal policy
b) Using an AD/AS diagram, explain the expected effects on the Spanish economy of this fiscal policy
c) Suggest reasons why the effects on the economy might not turn out as planned

Unit 2: Tradable permits: Latest developments in carbon trading in the EU

This Guardian article highlights the difficulties in introducing a carbon trading system

http://www.guardian.co.uk/business/2008/apr/02/greenbusiness.carbonemissions

a) Explaining your reasoning, to what extent is the trading system currently reducing the market failure?
b) Explaining your reasoning, to what extent do you believe the trading system will be successful in reducing the market failure in the future?

Unit 3: Supply side policy: Deregulation of transatlantic air routes

This BBC video explains the new deal between the US and Europe aiming to open up air travel between the two continents.

< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7320000/newsid_7321100?redirect=7321163.stm&news=1&nbwm=1&bbwm=1&bbram=1&nbram=1&asb=1 >

a) Why would this action be regarded as a supply side policy?
b) Using a diagram, explain the potential effects on the European and American economies of this action

Unit 3: The effects of changing exchange rates

Britons travelling to Europe face soaring costs as the euro continues to strengthen against the pound according to this BBC clip. Travelling to other countries may be more beneficial

< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7330000/newsid_7331500?redirect=7331546.stm&news=1&nbwm=1&bbram=1&bbwm=1&nbram=1&asb=1 >

a) Explain the effect of the rising/falling pound on patterns of UK destinations overseas
b) What does this tell you about the demand for these destinations?
c) What effect would these changes in the value of the pound have on the trade in services for the UK?

Unit 2: Subsidies to increase demand for merit goods

This BBC clip outlines some of the problems with using subsidies to decrease market failure

http://news.bbc.co.uk/player/nol/newsid_7330000/newsid_7332000/7332074.stm?bw=bb&mp=rm&asb=1&news=1&bbcws=1

a) Explain how the free market for solar panels fails
b) Using a S&D diagram, explain how the use of subsidies should reduce the market failure
c) What problems are there with using subsidies to reduce market failure and how does this example illustrate some of those problems

Unit 2: Information failure and de/merit goods

A few stories which show the degree of information failure we as consumers face:

Ever wondered why you don't do as well in College on a Monday?
http://news.bbc.co.uk/1/hi/health/7328863.stm

Should women who wish to get pregnant be vets?
http://news.bbc.co.uk/1/hi/health/7326459.stm

Should you drink coffee or not?
http://news.bbc.co.uk/1/hi/health/7326839.stm

a) To what extent do you believe such reports reduce market failure?

nit 3: Revision on aggregate supply and supply side policies

From Geoff Riley comes this revision on aggregate supply and supply side policies. It goes a bit beyond what I normally teach for AS, but should prove useful

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