Unit 1: Government action to overcome market failure: Cocaine use

The BBC reports the launch of a hard hitting campaign to reduce cocaine use

http://news.bbc.co.uk/1/hi/health/7762750.stm

a) Why type of market failure does cocaine use represent? Explain your reasoning
b) What are the private costs of cocaine use?
c) What are the external costs of cocaine use?
d) Using a diagram, explain how there is market failure in the cocaine market
e) To what extent do you believe this campaign will reduce the market failure associated with cocaine use?

Unit 1: Government action to overcome market failure: Excessive alcohol consumption

The BBC reports the govts latest plans to combat excessive alcohol consumption

http://news.bbc.co.uk/1/hi/uk_politics/7762594.stm

a) List the proposed alcohol reduction methods
b) To what extent do you think these measures will overcome the problems associated with excessive alcohol consumption

Unit 1: Roadworks and negative externalities

From the BBC comes this sorry tale of shops in severe difficulties due to roadworks

http://news.bbc.co.uk/1/hi/business/7755218.stm

a) Who are the 2 parties to the economic transaction?
b) Define what is meant by the term negative externalies
b) Explain why the shops are suffering negative externalities in this example

Unit 1: A van with reduced negative externalities

WE all know the negative externalities associated with road vehicles, but here from the BBC is something new

http://news.bbc.co.uk/1/hi/uk/7759400.stm

a) What are the reduced negative externalities associated with this van?
b) What negative externalities remain?
c) Using a diagram, explain how a subsidy from the govt will encourage consumption of these vans
d) Why might the govt be reluctant to subsidise such vans?

Unit 2: How does Inflation affect Firms?

From economics help comes this good summary of how inflation affects firms

http://www.economicshelp.org/blog/inflation/how-does-inflation-affect-firms/

Unit 2: Should we worry about a current account deficit?

From Economics help come two good summaries of the issues associated with a current account deficit: Excellent revision aids

http://www.economicshelp.org/2008/11/balance-of-payments-statistics-should.html
http://www.economicshelp.org/2007/03/does-current-account-deficit-matter.html

Unit 2: Should we worry about a current account deficit?

Unit 2: Rising unemployment and negative multiplier effects

Tutor2u has a series of stories highlighting the regional impact of firms laying off workers

http://www.tutor2u.net/blog/index.php/economics/comments/the-rise-of-cyclical-unemployment/

a) Explain the negative multiplier effects on the local economies of rising unemployment.

Unit 2: The menu Costs of Cutting VAT

The tutor2u blog has this good example of menu costs today

http://www.tutor2u.net/blog/index.php/economics/menu-costs-of-cutting-vat/#When:06:31:00Z

This BBC clip shows the effect on one firm

http://news.bbc.co.uk/1/hi/business/7757966.stm

Unit 2: The link between inflation and unemployment

A Good summary of the link from Economics help

http://www.economicshelp.org/blog/economics/inflation-unemployment-relationship/

Unit 2: Do fiscal stimulus packages work?

A good 2 sided look at the issue from Economics help

http://www.economicshelp.org/2008/11/do-economic-stimulus-packages-work.html

Unit 1: Negative externalities associated with binge drinking

Another example from the BBC of negative externalities associated with binge drinking and a possible solution trialled by the government

http://news.bbc.co.uk/1/hi/uk/7741067.stm

This clip also shows the private cost of excessive drinking by the young

http://news.bbc.co.uk/1/hi/health/7743321.stm

a) What negative externalities associated with binge drinking are identified in the clip?
b) What possible solution is being trialled by the government?
c) To what extent do you believe such schemes will reduce the market failure associated with binge drinking?

Unit 2: Negative multiplier effects from the decline of the Detroit motor industry

This BBC article has some examples of the negative multiplier in action

http://news.bbc.co.uk/1/hi/business/7737040.stm

a) Explain what is meant by the negative multiplier effect
b) Explain how the decline of the major motor manufacturers has lead to a negative multiplier effect in the city

Unit 1: Negative externalities associated antisocial driving

This BBC clip and associated article outline new government proposals for dealing with various types of antisocial driving such as driving under the influence of drugs and excessive speeding

http://news.bbc.co.uk/1/hi/uk/7738995.stm video
http://news.bbc.co.uk/1/hi/uk/7738919.stm article

a) Explain what negative externalities arise from antisocial driving
b) What forms of intervention in the free market are the government suggesting?
c) To what extent are the proposals likely to reduce the market failure?

Unit 2: Deflation: What is it and what are the dangers of deflation

CH4 news has this explanatory clip

http://link.brightcove.com/services/link/bcpid1184614595/bctid2579317001

Hugh Pym of the BBC has this article on what deflation is and the dangers it poses to the UK economy

http://news.bbc.co.uk/1/hi/business/7736193.stm article

His video clip explains the latest UK inflation dip and has something on deflation at the end of it

http://news.bbc.co.uk/1/hi/business/7735706.stm

Adrian Brown of the BBC has this analysis of deflation

http://news.bbc.co.uk/1/hi/business/7754487.stm

a) Why if fuel and food prices are falling is the economy not currently experiencing deflation?

Unit 1: External costs associated with obesity

This BBC clip shows how the NHS has adapted to cope with the growing size of some of their patients

http://news.bbc.co.uk/1/hi/england/7735717.stm

a) Define what is meant by a negative externality
b) Why is this additional expenditure by the NHS an example of the negative externalities associated with obesity

Unit 1: Developments in tradable permits carbon trading in the uk

The BBC reports that the tradable permits system is changing in the Uk

http://news.bbc.co.uk/1/hi/sci/tech/7736005.stm

a) Why are firms to be charged for 30% of the permits that they require?
b) To what extent do you believe this will reduce the market failure for 9i0 each firm and 9ii) the market as a whole

Unit 2: What should happen to interest rates?

The Economics help blog has this summary of why interest rates may fall further in the UK

http://www.economicshelp.org/blog/economics/outlook-for-interest-rates/

Unit 2: What's happening to inflation in the UK?

From Geoff Riley's tutor2u blog comes this great summary of recent movements in UK inflation in the UK and what might happen in the future

http://www.tutor2u.net/blog/index.php/economics/comments/disinflation-and-deflation/

The BBC has a summary video and article including an explanation of why deflation may not be as attractive as it seems

http://news.bbc.co.uk/1/hi/business/7734758.stm video
http://news.bbc.co.uk/1/hi/business/7734522.stm article

Unit 1: Information failure while trying to get a tan

The BBC has a classic example of information failure

http://news.bbc.co.uk/1/hi/health/7732712.stm video
http://news.bbc.co.uk/1/hi/health/7732690.stm article

a) What is the information failure in this market?
b) How might the market fail as a result?
c) What actions could the government take to reduce the market failure?

Unit 2:EU tariffs on Chinese candles

AP reorts the EU is putting variable tariffs on imports of Chinese candles for the next 6 months

http://www.google.com/hostednews/ap/article/ALeqM5jY-DSfzHnGwnfJsKxyAcn02B26yQD94FECD00

a) Explain what a tariff is
b) Using a suitable diagram, comment on the effect of the tariff on EU consumers

Unit 2: Inflationary noise

Economics help has this good description of inflationary noise and the problems it causes

http://www.economicshelp.org/blog/economics/inflationary-noise/

Unit 1: Car clubs, an inferior good?

The BBC has an interesting clip on the growth of car clubs

http://news.bbc.co.uk/1/hi/business/7728779.stm

a) Define an inferior good
b) To what extent would you argue that car clubs are an example of an inferior good

Unit 1: Negative externalities associated with smoking in the developing world

Two clips from the BBC on smoking in China and India; the figures are mind boggling!

http://news.bbc.co.uk/1/hi/world/asia-pacific/7726770.stm China
http://news.bbc.co.uk/1/hi/world/south_asia/7647665.stm India

a) What negative externalities are there for China and India of smoking on such a vast scale?
b) What private costs are there associated with smoking?
c) Comment on the likeyhood of the suggested government actions reducing the negative externalities

Unit 2: The state of the UK economy: Nov 2008

A great BBC clip showing the current position of the economy and the outlook for the economy over the next year

http://news.bbc.co.uk/1/hi/business/7724776.stm

a) What is happening, and predicted, for the 3 macroeconomic objectives mentiones; ie economic growth, inflation and unemployment?
b) Comment on the likely effect on the current account of the BoP if the predictions turn out to be true

Unit 2: Imported recession in Germany

An interesting BBC clip explaining that germany appears to have imported its recession

http://news.bbc.co.uk/1/hi/world/europe/7726218.stm

a) Using the AD formula, explain how Grermany has imported a recession
b) Using an AD/AS diagram, explain the effect on the German economy

Unit 1: External costs of obesity

BBC NI reports the external costs of obesity in the provinces at £500m

http://news.bbc.co.uk/1/hi/northern_ireland/7725986.stm

a) What is a negative cost?
b) Give examples of the external costs listed asociated with obesity
c) Suggest two measures the government can take to reduce the negative externalities associated with obesity and comment on how successful they are likely to be

Unit 2: Rising unemployment in the UK

This BBC clip and article rrising UK unemployment to an 11 year high

http://news.bbc.co.uk/1/hi/business/7723784.stm video
http://news.bbc.co.uk/1/hi/business/7724084.stm article

a) Why is unemployment rising?
b) What is the unemployment rate?
c) What are there 2 unemployment measures and what is the difference between them?
d) What actions can the government take to reduce the level of unemployment?

Unit 2: Conflicts of Objectives and Interest rates.

Form Economics help comes this summary of the conflicts of Objectives and Interest rates.

http://www.economicshelp.org/blog/economics/conflicts-of-objectives-and-interest-rates/

Unit 2: The Economics of Tax Cuts

Form Economics help comes this interesting summary of The Economics of Tax Cuts

http://feeds.feedburner.com/EconomicsEssays?format=xml

Unit 1: Falling demand for products in Wales

A sad tale showing the recession beginning to take effect in 3 different sectors of the Welsh economy

http://news.bbc.co.uk/1/hi/wales/7716867.stm

a) Use the concept of Income Elasticity of Demand to explain what is happening to these 3 companies

Unit 2:Government income/borrowing during a recession

A good summary of the topic from Economics help

http://www.economicshelp.org/2008/11/government-borrowing-in-recessions.html

a) Using an AD/AS diagram, explain how govt borrowing and the resulting increase in govt expenditure should increase economic growth. Make sure you draw the diagram to show very little inflation results in the economy

Unit 2: The problems of a Current Account Deficit

From Economics help comes this good summary of the problems associated with a Current Account Deficit

http://www.economicshelp.org/blog/economics/problems-of-a-current-account-deficit/

Unit 2: The Case for Lower Interest Rates

From Economics help comes a clear summary of the arguments as to why interest rates should fall in the UK

http://www.economicshelp.org/2008/10/case-for-lower-interest-rates.html

a) Why might decreasing interest rates not be the solution to the problems outlined?

Unit 2: Consumption, aggregate demand and economic growth

A gret little summary of the above links from tutor2u

http://www.tutor2u.net/blog/index.php/economics/comments/what-if-the-consumer-abandons-the-economy/

This BBC video clip also illustrates why the US economy is shrinking

http://news.bbc.co.uk/1/hi/business/7701255.stm

a) Using an AD/AS diagram, explain how a fall in consumption can lead to a fall in output in the economy
b) What other problems would arise in the economy if this was to occur?
c) What benefits might there be to the economy if this were to occur?
d) To what extent would such a series of events be beneficial to the UK economy in the long run?

Unit 1: Inferior goods in the UK economy

Tutor2u pointed out this article

http://edinburghnews.scotsman.com/features/Meet-the-credit-crunch-winners.4631545.jp

a) Define an inferior good including the term "income elasticity of demand"
b) To what extent do you believe the goods/services mentioned in the article are inferior goods?

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

http://www.economicshelp.org/blog/economics/growth-vs-inflation/

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

Unit 1: Poundland: An inferior good?

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

http://news.bbc.co.uk/1/hi/business/7680302.stm

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

http://news.bbc.co.uk/1/hi/world/south_asia/7688073.stm

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

http://www.economicshelp.org/2008/10/how-much-should-interest-rates-fall.html

Unit 1: The price of fish

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

http://news.bbc.co.uk/1/hi/england/7674195.stm

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

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

http://www.tutor2u.net/blog/index.php/economics/comments/why-is-the-pound-falling-in-value-and-does-it-matter/#extended

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

http://news.bbc.co.uk/1/hi/magazine/7682887.stm

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?

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)

http://www.tutor2u.net/blog/index.php/economics/comments/in-the-long-run/

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

http://www.tutor2u.net/blog/index.php/economics/comments/why-are-the-car-companies-cutting-production/

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

Unit 1: How Firms Use Income Elasticity of Demand

From Economics help comes this useful revision aid

http://www.economicshelp.org/blog/economics/firms-use-income-elasticity/

Unit 2: Why we need economic growth

An interesting argument to recap ideas on the benefits of economic growth

http://news.bbc.co.uk/1/hi/magazine/7674841.stm

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

http://news.bbc.co.uk/1/hi/health/7675843.stm

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

http://news.bbc.co.uk/1/hi/world/7673192.stm

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

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

http://www.tutor2u.net/blog/index.php/economics/contraction-in-employment-is-what-matters/#When:18:39:00Z

Unit 1: Inferior and normal goods

From the BBC comes this interesting article about 2 Whitbread brands

http://news.bbc.co.uk/1/hi/business/7668895.stm

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

http://www.tutor2u.net/blog/index.php/economics/comments/highest-inflation-for-16-years-but-no-panic/

Negative externalities and government action: Cars in China

An interesting clip from the BBC

http://news.bbc.co.uk/1/hi/world/asia-pacific/7667462.stm

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?

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!

http://news.bbc.co.uk/1/hi/world/africa/7660569.stm

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

http://news.bbc.co.uk/1/hi/scotland/tayside_and_central/7663547.stm

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

http://news.bbc.co.uk/1/hi/world/asia-pacific/7665193.stm

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

http://news.bbc.co.uk/1/hi/uk/7665761.stm

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?

Unit 1: Information failure: Electronic cigarettes

The BBC reports rising sales of electronic cigarettes

http://news.bbc.co.uk/1/hi/video_and_audio/7658334.stm

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

http://news.bbc.co.uk/1/hi/england/7655831.stm

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?

Unit 2: Reducing Unemployment By Using Monetary Policy

This Economics help article summarises how using Monetary Policy should reduce unemployment....and why it might not

http://www.economicshelp.org/blog/unemployment/reducing-unemployment-by-using-monetary-policy/

Unit 2: The slowing British economy

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

http://link.brightcove.com/services/player/bcpid1184614595?bctid=1832200503

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

http://news.bbc.co.uk/1/hi/world/asia-pacific/7652140.stm

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?

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

From the economics help blog comes this useful summary

http://feeds.feedburner.com/EconomicsBlog?format=xml

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

Unit 1: How good are government actions to overcome information failure: Food labelling

This BBC report suggests that Government actions may not result in much of a reduction in market failure due to information failure

http://news.bbc.co.uk/1/hi/health/7641476.stm

a) Using a S&D diagram, explain how the market for food fails
b) What form of action has the government taken to reduce the market failure?
c) Why is it failing to reduce the market failure as anticipated?

Unit 1: Actions to overcome information failure: Cigarette packets

The BBC reports the latest information campaign by government to reduce smoking

http://news.bbc.co.uk/1/hi/uk/7639138.stm

a) In what way does the market fail with smoking?
b) How is this campaign meant to reduce this market failure?
c) To what extent do you think the campaign is likely to succeed?

Unit 2: Interest rates: Should they rise or fall?

From the Economics Help blog comes this summary of the position the BoE currently finds itself in; to lower interest rates or not?

http://www.economicshelp.org/2008/09/interest-rate-forecasts-for-uk.html

Unit 1: Price Elasticity of Demand and football fans

The Guardian reports away fans are facing huge rises in the aveerage cost of an away trip

http://www.guardian.co.uk/football/2008/sep/24/1

a) Using the idea of Price Elasticity of Demand, evaluate the likely effect of this 21% rise in price for an away trip. You will lose marks if you mention Spurs are bottom of the league at the time of writing!

Unit 2 Changes in the types of output in the GDP

From Geoff Riley comes this interesting chart

http://www.tutor2u.net/blog/index.php/economics

a) Outline the changes that have occured in the relative importance of the identified components of GDP since 2000
b) Why do you think these changes may have occured?

Unit 1: Demand for Microsoft's Xbox

The BBC reports a price cut for the Xbox

http://news.bbc.co.uk/newsbeat/hi/newsbeat/newsid_7618000/7618515.stm

a) Using a demand diagram, explain the effect of the price cut
b) Explain how successful you think the price cut will be for Microsoft a) in the short run, b) in thelonger term

Unit 2: Rising unemployment in the UK

UK unemployment is rising according to this BBC clip

http://news.bbc.co.uk/1/hi/uk/7621225.stm

a) Why is the brick company laying off workers?
b) Using an AD/AS diagram, explain what is happening in the UK economy to cause this rise in unemployment
c) Suggest 3 different policy measures the government could use to reduce unemployment
d) Give one drawback of using each method

Unit 2: Pros and cons of inflation

From the Economics Help blog comes this great summary of why inflation is seen to be bad, but which also outlines the advantages of a low rate of inflation

http://www.economicshelp.org/blog/economics/pros-and-cons-of-inflation/

Unit 2: Inflation rises to 4.7% so why doesn't the BoE respond by using Monetary Policy?

From the BBC comes this clip and article about why inflation continues to rise and what the BoE is doing to try and return it to it's target of 2%

http://news.bbc.co.uk/1/hi/business/7618286.stm

Two other BBC video clips are at

http://news.bbc.co.uk/1/hi/business/7619088.stm
http://news.bbc.co.uk/1/hi/business/7619088.stm

This Ch4 video identifies another key reason for inflation, the fall in the value of the £

http://link.brightcove.com/services/player/bcpid1184614595?bctid=1797752529

a) Explain what sort of inflation the UK seems to be suffering
b) What are the main reasons given for the rise in inflation?
c) Using the table at the bottom, explain how some prices can be falling if inflation is rising
d) How does the falling £ push up inflation (CH4 video)
e) To what extent do you think the BoE is capable of reducing the current inflation rate?

Want to calculate your own inflation rate? You can do it via the ONS calculator at

http://news.bbc.co.uk/1/hi/business/7610430.stm

Unit 2: Government Expenditure in the UK

A great chart showing where Govt expenditure occurs in the UK economy

http://image.guardian.co.uk/sys-files/Guardian/documents/2008/09/12/13.09.08.Public.spending.pdf

Unit 2: Economic growth and standard of living

From the Economics help blog comes this look at Economic growth and standard of living in China

http://www.economicshelp.org/blog/economics/chinas-economic-growth-and-living-standards/

a) Evaluate the extent to which Economic growth is beneficial to the average Chinese citizen

Unit 1: The Economic Problem; a summary

A good summary of the introductory ideas from the AS syllabus from the Economics Help blog

http://www.economicshelp.org/2008/09/economics-and-scarce-resources.html

Unit 2: The effect of changing interest rates on the Australian economy (Monetary policy)

An interesting, short article from the BBC

http://news.bbc.co.uk/1/hi/business/7593189.stm

The Australian govt seems to face the same dilemma as the UK govt does!
a) Using an AS/AD diagram, explain how the cut in interest rates may lead to increased economic growth with little additional inflation
b) Using an AS/AD diagram, explain how the cut in interest rates may lead to increased inflation with little additional growth

Unit 2: The dilemma in setting interest rates (monetary policy)

A good clip from Ch4 on the dilemma facing the BoE in setting interest rates

http://link.brightcove.com/services/player/bcpid1184614595?bctid=1773162851

a) Explain the dilemma faced by the BoE when setting interst rates in terms of conflicting macroeconomic objectives
b) Use AD/AS diagrams to in each case to explain how the BoE could use interest rates to resolve the problems

Unit 1: Falling disposable incomes and the effect on demand for cars and budget hotels

3 articles from the BBC showing the effect on the demand for cars and budget hotels of falling incomes in the UK

http://news.bbc.co.uk/1/hi/business/7597387.stm Premier Inns
http://news.bbc.co.uk/1/hi/business/7599681.stm Bentley cars
http://news.bbc.co.uk/1/hi/business/7597954.stm New car sales

Use the concepts of normal/inferior goods to explain
a) The change in demand for Premier Inn rooms
b) The change in demand for Bentley cars
c) The change in demand for different types of cars. How does the idea of Complements also explain this change?

Unit 1: The demand for organic food

This BBC video clip reports a fall in demand for organic food

http://news.bbc.co.uk/1/hi/business/7601619.stm

a) Using the theory of demand, give 2 reasons why demand for organic food has fallen
b) Draw a diagram to show what happens to demand in each case
c) What term would you use to describe organic food given the change in sales as consumer incomes fall

Unit 1: Charity shops - an example of inferior goods?

An interesting article from the BBC

http://news.bbc.co.uk/1/hi/business/7591970.stm

a) Explain what is meant by an inferior good
b) What evidence is there in the article that charity shops are inferior goods?

Unit 1: Information failure: Perfume in pregnancy

This BBC article suggests possible information failure in the perfume market

http://news.bbc.co.uk/1/hi/scotland/edinburgh_and_east/7590641.stm

a) How does information failure represent market failure?
b) Evaluate 2 possible methods the govt could use to reduce the market failure in this case

Unit 1: Negative externalities associated with binge drinking

This BBC article (including a video) clearly shows the negative externalities associated with binge drinking

http://news.bbc.co.uk/newsbeat/hi/health/newsid_7588000/7588865.stm

a) What is a negative externality?
b) Why is binge drinking a negative externality?
c) How does the freee market fail in this case?
d) What actions can govt take to reduce this market failure?

Unit 1: The demand for chocolate

This BBC video clip is interesting when considering the demand for chocolate

http://news.bbc.co.uk/1/hi/business/7580488.stm

a) What economic factors influence the demand for chocolate
b) The video says price will rise but that this will not effect demand much at all. What does this tell you about the demand for chocolate?
c) Use economic theory to explain why this is the case
d) Draw a S&D diagram to show and then explain the effect of the increase in costs on the chocolate market

Unit 2 Monetary policy: The difficulty in setting interest rates when faced with conflicting macro economic objectives

The BBC reports the latest thoughts of the MPC on interest rates

http://news.bbc.co.uk/1/hi/business/7571925.stm

a) What problem means that interest rates should rise and how would that solve the problem?
b) What problem means that interest rates should fall and how would that solve the problem?

Unit 1: Opportunity cost in the NHS

This BBC video clip and asociated article shows how NICE has to make choices on which drugs the NHS can be prescribed

http://news.bbc.co.uk/1/hi/health/7579495.stm video
http://news.bbc.co.uk/1/hi/health/7579422.stm article

More on the story can be found at

http://news.bbc.co.uk/1/hi/health/7546572.stm

a) What is meant by opportunity cost?
b) How does this decision by NICE illustrate the economic problem and the concept of opportunity cost?
c) Using a PPC, show the choices open to NICE

Unit 2: Calculating inflation

This Ch4 video is great at explaining how students face an inflation rate much higher than the official CPI

http://www.channel4.com/news/articles/business_money/inflation+hits+students+hardest/2417272

This Ch4 article also shows the typical amounts spent by students on various items

http://www.channel4.com/news/articles/business_money/accommodation+biggest+student+cost/2431392

a) Explain why the student inflation rate is higher than the CPI. Include in your answer the following terms: basket of goods, weighting

Unit2: Inflation in Zimbabwe hits 11.2m%

The downward spiral of the Zimbabwe economy continues as inflation reaches a new high according to the BBC

http://news.bbc.co.uk/1/hi/business/7569894.stm

Unit 1: Business waste: Taxation as a way to overcome market failure

This BBC article suggests that the landfill tax has been successful in reducing the amount industry sends to landfill but that further action is needed to reduce business waste

http://news.bbc.co.uk/1/hi/sci/tech/7570909.stm

a) What sort of market failure is business waste?
b) Using a diagram explain how the landfill tax act as a stimulus to reduce the market failure
c) What advantages and disadvantages are there to using taxation to reduce the market failure associated with business waste?

Unit 2: Rising unemployment in the UK

The latest figures show rising unemployment figures

http://news.bbc.co.uk/1/hi/business/7557925.stm

a) Why is it suggested that UK unemployment is rising?

Unit 1: Government action to overcome market failure: Fresh fruit

This BBC video and associated article, outline government action to overcome market failure in the market for fresh fruit to overcome the problem of bad diet and obesity

http://news.bbc.co.uk/1/hi/health/7558827.stm video
http://news.bbc.co.uk/1/hi/health/7556850.stm article

a) What type of action is the government taking to increase consumption of fresh fruit?
b) How should this increase consumption of fresh fruit?
c) In economic terms, what sort of good is fresh fruit?
d) Why, in economic terms, is the govt so keen to increase consumption of fresh fruit?

Unit 2: Slowing economic growth in Germany

This BBC clip explains why economic growth in slowing in Germany

http://news.bbc.co.uk/1/hi/business/7560437.stm

a) How is economic growth measured?
b) Using the aggregate demand formula and using an AD/AS diagram, explain why growth is slowing in Germany

Unit 2: UK inflation up to 4.4% in July

This BBC clip and associated article, explain the latest rise in the CPI

http://news.bbc.co.uk/1/hi/business/7556483.stm video
http://news.bbc.co.uk/1/hi/business/7555788.stm article

a) Why do fast rising food, utility and fuel prices (all over 10%) result in only a 4.4% rise in inflation?

Unit 1: A campaign to overcome information failure: MMR

This BBC clip outlines a plan to get those wiithout full MMR protection immunised

http://news.bbc.co.uk/1/hi/health/7546531.stm

a) What is the private cost of getting a MMR jab?
b) What is the private benefit of getting a MMR jab?
c) What are the external benefits/positive externalities associated with a MMR jab?
d) How successful is the govt information campaign likely to be in reducing the market failure?

Unit 2: Proctionism and free trade: Who wins and who loses

From Economics Help comes this useful post on free trade and protectionism

http://www.economicshelp.org/2008/07/free-trade-policy-and-paradox.html

Unit 1: Tradable permits in action: Drax power station

From Geoff Riley comes this interesting post showing tradable permits in action

http://www.tutor2u.net/blog/index.php/economics/comments/drax-feels-the-heat-of-rising-carbon-prices/

a) What is the market failure associated with Drax?
b) To what extent does the article suggest that the tradable permits system will reduce the market failure in the long run?

Unit 1: Information faillure in the alcohol market in Scotland

The BBC has this clear example of information failure in the alcohol market in Scotland

http://news.bbc.co.uk/1/hi/scotland/7538747.stm

a) How does tha alcohol market fail if information failure exists?
b) What negative externalities occur as a result according to the article?
c) Given that both information failure and negative externalities exist, what sort of good is alcohol (in economic terms)?
d) Given the results of the survey, what actions could the Scottish government take to reduce the market failure?

Unit 1: Demand for Crocs

The Guardian reports that demand for Crocs shoes is falling

http://www.guardian.co.uk/business/2008/jul/26/retail.fashion

a) Use a demand diagram to show what has happened to demand for Crocs and use demand theory to explain why this has happened
b) What could the Crocs producers do to try and reverse this trend and increase demand again?

Unit 1: The impact of a techological advance on the PPC

This BBC article shows the impact of improving technology on an economy's output

http://news.bbc.co.uk/1/hi/world/europe/7528850.stm

a) Using a diagram, show and explain what has happened to output in Russia (label one axis Agricultural output and the other Industrial output)