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)

Unit 1: River pollution: The inadequacy of government action to overcome market failure

This BBC article shows the legislation by itself may not eliminate market failure

http://news.bbc.co.uk/1/hi/northern_ireland/7532163.stm

a) What is the market failure in the free market?
b) Why do the pollution incidents still occur even though there is legislation which means they should not?

Unit 2: Free trade v Proectionism

A good clip from the BBC highlighting protectionism in action

http://news.bbc.co.uk/1/hi/business/7532191.stm

a) What forms of protectionism are used in the cotton industry?
b) Who loses from this protectionism and in what way do they lose?
c) Who would gain if there was free trade in cotton?
d) Given these advantages of greater globalisation, why do the protectionist measures remain?

Market structures: Oligopoly and the games console market

Geoff Riley has this interesting post about the changing nature of the games console market

http://www.tutor2u.net/blog/index.php/economics/comments/nintendo-poised-to-overtake-sony-in-the-consoles-battle/

Unit 1: Government action to overcome market failure: Trans fats in California

An interesting article from the BBC on banning trans fats in California

http://news.bbc.co.uk/1/hi/world/americas/7526624.stm

a) Using a diagram, explain what sort of market failure trans fats represent
b) Why has California taken this action?
c) To what extent do you think the action will reduce the market failure?

Unit 2: Slowing economic growth in the UK

This BBC clip and asociated article show economic growth in the UK slowing

http://news.bbc.co.uk/1/hi/business/7525678.stm video
http://news.bbc.co.uk/1/hi/business/7524834.stm article

a) How is economic growth measured in the UK?
b) Which components of aggregate demand are slowing according to the clip?

Unit 1: Notional, Effective and Price elasticity of demand for air travel

From Geoff Riley's blog comes this graet piece on demand

http://www.tutor2u.net/blog/index.php/economics/comments/cheap-flights-elasticity-and-effective-demand/

a) Explain the difference between notional and effective demand for airlines
b) What is the formula for PED?
c) Using the information provided calculate the PED for flights
d) Using the information provided calculate the exact fall in the number of passengers if prices rise by 20%
e) Why is the PED likely to be inelastic?

Unit 2: Decreasing consumer confidence

The BBC reports falling consumer sales

http://news.bbc.co.uk/1/hi/business/7523571.stm video

a) Why is a fall in consumption important for the UK economy
b) Comment on the likely effect of a fall in consumer confidence and a decrease in consumption on the UK economy

Unit 1: Allocative efficiency in the North American motor indusrty

Geoff Riley has this summary of changes at Ford in the USA

http://www.tutor2u.net/blog/index.php/economics/a-change-of-direction-for-ford/#When:13:04:00Z

The BBC reports similar changes at General MOtors in the USA

http://news.bbc.co.uk/1/hi/business/7538470.stm

a) Explain how these changes in what is produced represents a move towards greater allocative efficiency in the North American motor market

Unit 1: The effect on price of reducing subsidies

The BBC reports a decrease in the subsidy on petrol in Vietnam

http://news.bbc.co.uk/1/hi/business/7517944.stm

a) Using a S&D diagram, explain why the reduced subsidy will lead to an increase in the price of petrol
b) Will the price rise by most of the reduction in the value of the subsidy, or not? Explain your answer

Unit 1: How S&D explain the price of oil

A really good explanation of the application of S&D to the price of oil from the BBC

http://news.bbc.co.uk/1/hi/business/7519414.stm

a) What demand factors effect the price of oil?
b) What supply factors effect the price of oil?
c) Why does the price of oil change daily when many of these factors do not?

Unit 2: More evidence of alcohol as a demerit good

A great BBC video clip and associated article highlighting continued problems with excessive alcohol consumption in the UK

http://news.bbc.co.uk/1/hi/health/7519613.stm video
http://news.bbc.co.uk/1/hi/health/7518843.stm article

a) Why would alcohol be classed as a demerit good?
b) What actions have been taken so farto reduce the market failure?
c) What actions is the government now threatening?
d) To what extent do you believe the government can reduce the market failure associated with excessive alcohol consumption?

Unit 3: Is the CPI an accurate measure of Inflation?

An interesting article in the Guardian explaining why the CPI may be an accurate measure of inflation despite most people's perception that inflation is higher

http://www.guardian.co.uk/business/2008/jul/21/inflation.economicgrowth1

Unit 3: Zimbabwe inflation hits 2,200,000% and the central bank issues a Z$100billion note

If you thought the UK inflation rate may be worrying at 3.8%, just think what trying to operate in the Zimbabwe economy must be like

http://news.bbc.co.uk/1/hi/business/7509715.stm

This article from the Guardian explains how ordinary Zimbabwe citizens are dealing with the economic meltdown

http://www.guardian.co.uk/world/2008/jul/18/zimbabwe

And as a response to the falling purchasing power of the Z$, the govt issues a new note with a face value of......Z$100billion! What will it buy? According to this BBC article, a loaf of bread

http://news.bbc.co.uk/1/hi/world/africa/7515823.stm

This small section of a Guardian article shows what hyperinflation does to the purchasing power of money:

The demand for new higher denomination notes, as the value of existing ones plummeted, was reflected in the rapid increase in the numbers of noughts on money printed over the past two years.
In August 2006, the central bank issued a $5 note. A $500,000 note followed a year later. On 2 May 2008, a $500m banknote hit the streets but was swiftly near worthless, and $5bn, $25bn and $50bn notes followed just a fortnight later.

Unit 3: Inflation at 11 year high

These BBC article and Ch4 video clip, explain why CPI is at an 11 year high and the problems the BoE faces in trying to contain its increase

http://news.bbc.co.uk/1/hi/business/7506940.stm article
http://link.brightcove.com/services/player/bcpid1184614595?bctid=1668522825 video

Unit 3: The link between economic growth and unemployment

Two tables in this post by Geoff Rilet are really useful inseeing the link between these 2 government objectives

http://www.tutor2u.net/blog/index.php/economics/comments/turning-points-for-the-labour-market/

This BBC article explains the latest rise in unemployment

http://news.bbc.co.uk/1/hi/business/7508816.stm

a) Explain the time lagged link between changes in economic growth and the resulting changes in unemployment
b) Explain the latest rise, and recent trend, in unemployment