Unit 2: The US recession continues

This BBC report says the US recession is continuing

http://news.bbc.co.uk/1/hi/business/8024839.stm

a) Write out the AD formula and explain what is happening to each component
b) Using an AD/AS diagram, explain the effect on the US economy
c) Using an AD/AS diagram, explain the effect the fiscal stimulus package should have on the economy
d) Why does the package not appear to be having the desired effect?

Unit 2: Revision: Government spending and budget deficits

From economic student comes this great little revision post

http://rapidrevision.co.uk/economics-student/2009/04/29/tackling-structural-budget-deficits/

Unit 2: Supply side policies in the USA: R&D

The BBC reports Obama pledging an increase in US spending on R&D

http://news.bbc.co.uk/1/hi/sci/tech/8020930.stm

a) Why is this an example of a supply side policy?
b) Using an AD/AS diagram, show the effect of this policy i(f it were to be succesful) on the US economy
c) Evaluate how successful such a policy is likely to be

Unit 1: Is renting an inferior good?

This BBC clip reports a rise in renting items rather than buying them as the recession bites

http://news.bbc.co.uk/1/hi/business/8019993.stm

a) Define inferior good
b) Discuss whether renting is an example of an inferior good

Unit 2: The depth of the UK recession

These BBC and Ch4 clips explain the worsening UK recession

http://news.bbc.co.uk/1/hi/uk/8016724.stm BBC
http://link.brightcove.com/services/player/bcpid1184614595?bctid=20970547001 Ch4

A good graphic showing the decline is in this post from the Stephanomics blog

http://www.bbc.co.uk/blogs/thereporters/stephanieflanders/2009/04/reversion_to_the_extreme.html

This clip illustrates one industry; the 50% fall in car output compared to the same month last year

http://news.bbc.co.uk/1/hi/business/8016758.stm

Unit 1: Opportunity cost of increased government debt

This graphic from the times gives a vivid example of the idea of opportunity cost

http://extras.timesonline.co.uk/pdfs/economy_250409.pdf

Economics student also has this related article

http://rapidrevision.co.uk/economics-student/2009/04/27/opportunity-cost-of-servicing-the-national-debt/

a) Define opportunity cost
b) Exlain how the graphic can be used to explain the opportunity cost of increased government debt
c) Using a PPC diagram, explain how increased government debtleads to a movement along the PPC

Unit 2: UK unemployment rises to 6.7%

The BBC reports the latest depressing unemployment figures; note also the decline in the number of vacancies available for those unemployed

http://news.bbc.co.uk/1/hi/business/8011732.stm

a) What does an unemployment rate of 6.7% mean?
b) Explain how can there be 2.1m people unemployed when there are 462,000 job vacancies

Unit 2: Deflation in the UK

Deflation (as measured by the RPI) has arrived in the UK economy. A nice chart from economics student

http://feeds2.feedburner.com/EconomicsStudent?format=xml

This BBC clip is useful

http://news.bbc.co.uk/1/hi/uk/8010442.stm

Unit 2: The effect of a depreciating £ on the Balance of Payments

An excellent summary from a question of economics on the effect of a depreciating £ on the Balance of Payments

http://aquestionofeconomics.blogspot.com/feeds/posts/default?alt=rss

Unit 2: Problems with unemployment

From economics help comes this nice summary of the problems for an economy of high/rising unemployment

http://www.economicshelp.org/2009/04/problems-of-unemployment.html

Unit 1: Revision: Price elasticity of demand

From economics student come these useful summaries of PED, its uses and its limitations

http://rapidrevision.co.uk/economics-student/2009/04/17/elasticity-of-demand-and-those-minus-signs/

http://rapidrevision.co.uk/economics-student/2009/04/18/business-uses-of-price-elasticity/

http://rapidrevision.co.uk/economics-student/2009/04/19/estimating-and-relying-on-elasticity/

Unit 1: Subsidies for electric cars

The BBC reports government plans to subsidise the purchase of electric cars from 2011

http://news.bbc.co.uk/1/hi/uk/8001509.stm

a) Using a S&D diagram, explain the likely effect on the electric car markeet of the introduction of this subsidy
b) Explain why the outcome may not be as the government intends

More on the BYD electric car at
http://news.bbc.co.uk/1/hi/world/7992180.stm
...and the GM car
http://news.bbc.co.uk/1/hi/programmes/newsnight/8000964.stm
...and the Toyota plug in hybrid
http://news.bbc.co.uk/1/hi/business/7609495.stm

Unit 1: External benefits from TB drugs

A great freakonomics article

http://freakonomics.blogs.nytimes.com/2009/04/01/an-ingenious-approach-to-drug-compliance/

a) What are the private benefits of taking the TB drugs?
b) What are the external benefits of taking the drugs?
c) Explain why the external benefits are greater than the private benefits
d) How successful do you think the suggested "pay per pee" a[[roach will be in maximising the external benefit?

Unit 1: The price of chocolate

This Ch4 video suggests that the price of chocolate is due to rise

http://link.brightcove.com/services/player/bcpid1184614595?bctid=19088159001

a) Using a S&D diagram, explain why the price of chocolate is likely to rise
b) Using economic analysis, explain why firms are getting their chocolate products certified by Fairtrade or other agencies

Unit 1: The price of chocolate

Unit 1: Subsidies: Car scrappage

Tutor2u has this excellent post looking at the pros and cons of introducing a car scrappage subsidy to help the ailing car industry

http://www.tutor2u.net/blog/index.php/economics/comments/qa-what-is-a-scrappage-subsidy-and-will-it-work-in-the-uk/

Unit 2: Supply side consequences of Government expenditure

The BBC reports that Australia's government is to spend billions setting up a super fast fibre optic network across the country

http://news.bbc.co.uk/1/hi/world/asia-pacific/7986918.stm

a) Why could this be described as a fiscal policy action by the Australian government?
b) Why could this be described supply side consequence?

Unit 2: An improvement in the UK's current account

Tutor2u has this great post on why the UK's current account is likely to further improve in 2009. Particularly good are the figures for the 4 sections of the current account and therelative importance of the surplus/deficit on each section in 2008.

http://www.tutor2u.net/blog/index.php/economics/comments/trade-adjustment/

Unit 1: Actions to overcome market failure: Calorie counts on menus

Tutor2u has this summary of voluntary action to be taken by a few large chains to list the calrie count of menu items

http://www.tutor2u.net/blog/index.php/economics/comments/calories-you-can-believe-in/

This BBC and Ch4 video clips covers the story

http://news.bbc.co.uk/1/hi/health/7985006.stm BBC video
http://link.brightcove.com/services/player/bcpid1184614595?bctid=18752147001 Ch4 video

a) What information failure is ther in eating a restaurant meal?
b) What external costs are there to obesity?
c) To what extent do you think a schemr such as this would reduce the market failure?

Unit 2: How to reduce unemployment

A useful summary from economicshelp

http://www.economicshelp.org/2009/04/dealing-with-unemployment.html

Exam technique: Evaluation skills

From tutor2u comes this powerpoint on how to improve your evaluation answers in exams

http://www.tutor2u.net/economics/presentations/ImprovingEvaluationSkills/player.html

Read it, take on board the main points and use them as you go through past papers

Unit 1: The price of tea

These 2 BBC reports suggest that tea is set to rise in price in the shops

http://news.bbc.co.uk/1/hi/business/7973857.stm
http://news.bbc.co.uk/1/hi/world/africa/8213597.stm

a) In each case, using a S&D diagram, explain why the world price of tea is set to rise
b) Using a S&D diagram, explain why this will lead to an increase in the price of tea in UK shops

You may also find this post from economicshelp useful

http://www.economicshelp.org/blog/economics/price-of-tea/

Unit 1: Tax on cigarettes

The BBC reports a large increase in the tax on cigarettes in the USA

http://news.bbc.co.uk/1/hi/world/americas/7976225.stm

a) Using a diagram, explain the likely effect on sales of cigarettes in the USA
b) The article states
"The cigarette companies have not been standing idly by. They raised prices on cigarettes a few weeks ago to start making up for the money they expect to lose in sales."
What does this statement tell you about the price elasticity of demand for cigarettes?
c) What is the market failure associated with cigarette consumption?
d) How likely is the tax to reduce the market failure associated with cigarette consumption?

Unit 2: Unemployment data

The Guardian this week had a breakdown of the latest employment data: As of Feb 2009

26.94m people were in full time employment
2.41m people were in part time employment
2.03m people were unemployed (LFS measure)
7.8m people were economically inactive (2.05m students,2.22m looking after home/family, 2m long term sick, 0.17m temporary sick, 0.59m early retired, 0.77m others)

a) How many people were economically active?
b) What % of the workforce is economically active?