Tuesday, October 28, 2008

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


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

Saturday, October 25, 2008

Unit 1: Poundland: An inferior good?

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


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


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


Unit 1: The price of fish

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


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

Thursday, October 23, 2008

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


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


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?

Wednesday, October 22, 2008

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)


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


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

Sunday, October 19, 2008

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


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


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

Wednesday, October 15, 2008

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


Unit 1: Inferior and normal goods

From the BBC comes this interesting article about 2 Whitbread brands


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


Monday, October 13, 2008

Negative externalities and government action: Cars in China

An interesting clip from the BBC


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?

Sunday, October 12, 2008

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!


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


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


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


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?

Thursday, October 09, 2008

Unit 1: Information failure: Electronic cigarettes

The BBC reports rising sales of electronic cigarettes


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


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?

Monday, October 06, 2008

Sunday, October 05, 2008

Unit 2: The slowing British economy

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


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


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?

Thursday, October 02, 2008

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

From the economics help blog comes this useful summary


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