Wednesday, October 28, 2009

Unit 1: Income elasticity of demand for coffee

A really interesting video clip from the BBC

a) Explain what income elasticity of demand measures and state the formula
b) Given what is said in the video, would it be true to say that coffee bought on the high street is an inferior good?

Sunday, October 25, 2009

Saturday, October 24, 2009

Thursday, October 15, 2009

Tuesday, October 13, 2009

Unit 1: Cigarette vending machine bans ....and more

The BBC reports plans to ban cigarette vending machines and make cigarettes under the counter items in shops

a) Explain the economic justification for such actions
b) To what extent do you think such measures will be successful in reducing the market failure associated with smoking?
A good article explaining the improving UK trade deficit

a) What is meant by a trade deficit?
b) What is meant by an improving deficit?
c) Why does the srticle suggest the UK trade deficit has improved?

Saturday, October 10, 2009

Unit 1: The price of champagne

Thanks to tutor2u for this Daily Mail article

The same story is also in the Times

a) Using a S&D diagram, explain what has happened to the demand for campagne and the resulting changes in the market
b) Draw another diagram to show the effect of the smaller harvest next year and explain the resulting changes in the market

Unit 1: The price of sugar

An article from the Guardian with lots of S&D economics in it

a) Explain the 2 factors that have lead to a decrease in the supply of raw sugar
b) Explain what has happened to the demand for sugar
c) Using your answers to a) and b) and a diagram, explain what has happened to the sugar market
d) Define price elasticity of supply
e) Given the 2 statements below, discuss whether the price elasticity of supply will be elastic or inelastic
"The sugar available now is dependent upon the sugar planted last year": "Stockpiles of sugar are available"
f) Define price elasticity of demand
g) Do you believe the price elasticity of demand for sugar to be elastic or inelastic? Explain your reasoning

Wednesday, October 07, 2009

Monday, October 05, 2009

Unit 1: The price of milk

This BBC article explains that the price of milk in the EU is falling video

a) Using a diagram, explain why the price of milk is falling
b) Why are farmers dumping milk and witholding supplies?
c) Using a diagram, show the effect of farmers witholding supplies on the price of milk

Unit 1: Increasing demand for real ale

This BBC article says demand for real ale is rising

a) Which determinant of demand has changed leading to the increasing demand for real ale?
b) Show this effect on a demand curve

Saturday, October 03, 2009

Unit 1: The price elasicity of demand for postage stamps

This BBC article is a good example of price elasicity of demand in action

a) Define price elasicity of demand
b) Using the information in the article, calculate the PED for first and second class stamps
c) What do the 2 numbers you have calculated tell you about the demand for the 2 products?
d) Why is demand for these 2 products as you have described? (Hint: Look at the factors that influence PED)
e) What advice would you give Royal mail about their pricing structure as a result of your calculations?

Friday, October 02, 2009