Saturday, June 27, 2009

Unit 1: The effect of a VAT cut on restaurant meal sales

France is reducing the VAT on retaurant meals in France according to this BBC clip

a) Using a S&D diagram, explain the anticipated effect on the market for restaurant meals on the reduction in VAT
b) To what extent will such a VAT cut effect the market?

Unit 1: Changes in the Chinese aircraft market

An interesting clip from the BBC on changes in the Chinese aircraft market

a) Explain what has happened to demand in the market and why
b) Explain what has happened to supply in the market and why
c) Use a S&D diagram to show these changes and explain what has happened in the market

Unit 1: The web: A public good?

The death of Michael Jackson lead to turmoil at some internet sites reports the BBC

a) What are the 2 charecteristics of a public good?
b) To what extent are web sites such as Google and Twitter public goods if the article is correct?

Unit 1: Non-toxic fire retardent as a merit good?

From tutor2u comes this brilliant clip on a new, non-toxic fire retardent

a) What are the 2 conditions necessary for a good to be clasified as a merit good?
b) Does this good meet both criteria and so fall in to the catagory of a merit good?
c) How does the market for this fire retardent currently fail?
d) What actions could the Australian/Greek.....governments take to reduce the market failure?

Unit 2: Progressive income tax; an example

From economics help comes this useful numerical example of how income tax can be progressive

Sunday, June 21, 2009

Unit 1: Porsche: A superior good?

The BBC reports rapidly declining Porsche sales

Porsche has been hit hard by the global recession. Porsche has seen its nine-month unit sales slump by more than a quarter after demand for its cars was hit by the worldwide recession.
Global sales at the German carmaker declined 28% to 53,635 vehicles between August 2008 and the end of April, compared with a year earlier.

Given the world recession has seen average incomes fall by no more than 5%,

a) Calculate the income elasticity of demand for Porsche cars and then explain why they might be considered a superior good
b) Explain 3 possible reasons why demand for Porshe cars (other than falling incomes) may hasve fallen
c) Using a S&D diagram, explain why this may be a good time to buy a Porsche (assuming you are still in a well paid job and can afford to buy one)

Sunday, June 14, 2009

Unit 1: Negative externalities associated motoring

This BBC clip outlines one negative externality associated with motoring

a) Define a negative externality
b) Explain the negative externality outlined by the clip and article
c) Using a diagram, explain how the market fails in this case
d) Suggest 2 possible actions the govt could take to reduce the negative externality, and give 2 disadvantages of each action

Saturday, June 13, 2009

Unit 2: The current account of the Balance of payments

This BBC article reports a continuing decline in the current account surplus in Japan

a) What are the components of the current account of the BoP?
b) What is the effect on the Japanese economy of a declining surplus on its current account?
c) What reason is suggested for the decline in the surplus and why might this have come about?

Sunday, June 07, 2009

Unit 1: Negative externalities associated with smoking

This Daily Mail article which was quoted in a tutor2u post highlights some of the negative externalities associated with smoking

This BBC article suggests the costs to the NHS are much higher than previously thought

a) Define a negative externality
b) Explain why the costs stated in the articles are examples of negative externalities
c) Using a diagram, explain why the negative externalities stated in the articles represent market failure
d) Comment on 2 policies the government could introduce to reduce these specific negative externalities

Unit 2: Unemployment in the USA

A great little exercise based on a BBC clip from tutor2u

Wednesday, June 03, 2009

Unit 2: How much is consumption effected by changes in disposable income?

An interesting article from the BBC on the link between disposable income and consumption

a) What is the expected link between disposable income and consumption?
b) Why does it not appear to be the case in the US at the moment?

Unit 2: The consequences of unemployment

This BBC article shows how the pain of unemployment may not be spread evenly around the economy; good for evaluation comments