Tuesday, October 31, 2006

Unit 1: Substitutes and demand: Cadburys chewing gum

Read the article and then ask yourself

a) What will happen to the demand for Wrigleys?
b) What will happen to the demand curve for Wrigleys?
c) What are Cadburys and Wrigleys gum in economic terms?
d) Which elasticity figure could you use to measure the relationship between the 2 gums?
e) What can you tell me about what you think this figure will be? Explain yoiur reasoning.


A video clip on the same story is at

< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_6310000/newsid_6319000?redirect=6319075.stm&news=1&nbram=1&nbwm=1&bbwm=1&bbram=1 >

Unit 2: Climate change and the Stern report

Here is a summary of the Stern report


and 2 clips from BBC news

http://www.bbc.co.uk/mediaselector/check/nolavconsole/ukfs_news/hi?redirect=st.stm&news=1&amp;bbram=1&bbwm=1&nbram=1&nbwm=1&nol_storyid=6099316 >

< http://www.bbc.co.uk/mediaselector/check/nolavconsole/ukfs_news/hi?redirect=st.stm&news=1&amp;bbram=1&bbwm=1&nbram=1&nbwm=1&nol_storyid=6097362 >

a) What negative externalities associated with climate change does he identify?
b) What measures does he suggest the UK Government should undertake to alleviate the market failure
c) Evaluate the likely success of such policies if implemented by the UK government

One other source of opinions on the climate change debate is You Tube; put "Climate change" in the search box and you can find plenty of varying opinions!

Unit 1: Demand for Polish beer

When looking at which factors influence demand, amongst the "other" catagory items is "a change in population"

This article explains how the growth of the Polish community in the UK has led to an increase in Polish products, especially beer.


Monday, October 30, 2006

Unit 1: Economies of scale; container tankers

A great article from the Guardian which shows both the globalisation of trade and a good example of economies of scale in action.

Which sort of economies of scale are experienced by the tanker owners and how do they come about?


Unit 2: Climate change and market failure

This 2 minute BBC clip is excellent

a) How is climate change an example of market failure?
b) Who will bear the worst consequences of climate change?
c) What 3 solutions are proposed?

BBC NEWS Business Climate change fight 'can't wait'

This summary of the Stern report gives a broader background to the story


Unit 1 Barriers to entry

A BBC video clip showing how Tesco has erected a barrier to entry for other Supermarkets by their building up of a land bank of potential sites

< http://www.bbc.co.uk/mediaselector/check/nolavconsole/ukfs_news/hi?redirect=st.stm&news=1&bbram=1&bbwm=1&nbram=1&nbwm=1&nol_storyid=6093730 >

Saturday, October 28, 2006

Unit 3: Macroeconomic data

Geoff Riley's latest update on UK economic data; very useful for spotting trends


Unit 3: The effect of exchange rates on the BoP

Read the article and then think about the following:

a) What is the effect on the change in the value of the yen on exports?
b) Is it all good news for Japan?
c) Evaluate what will happen to the current account of Japan's BoP


Unit 1: The price of gas

Good news for households as this article predicts gas prices will fall

a) Explain why in terms of S&D and draw a diagram to show the predicted effect.
b) Consider whether, in terms of global warming, this might not be such a good thing.


Unit 1: The price of houses

These article looks at the staggering rise in house prices over the past decade.

a)Use the articles and your list of factors that influence both supply and demand to explain how this price rise has occured; ie which factors have altered and what would these effects be on a S&D diagram
b) Why might the price rise not be uniform across the country?


http://news.bbc.co.uk/1/hi/business/6087062.stm you can also watch the video link to a 1 minute BBC news story. The link is on the right hand side of the page

Unit 1: Maximum output and PPC's

This report explains that net immigration into the UK helped raise the rate of Economic Growth in the UK by 3%.
a)Why would this be the case?
b) Show the effect on the UK's PPC


Unit 2: Government intervention to overcome market failure

Free markets don't always work efficiently. These articles highlights mis-selling and the government's response

a) Which of the 6 catagories is this an example of market failure?
b) What has the government done to overcome this sort of market failure (ie which of the possible methods of intervention has it used)
c) Are there drawbacks to this method of intervention? Would alternative methods be better?



Unit 2: Demerit goods: Binge drinking

The first article suggests a method for overcoming the problem of teenage binge drinking. In economic terms this is a problem of binge drinking being a demerit good.
The second article is Geoff Riley's overview of the issue

a) What are the 2 conditions needed for a good to be catagorised as a demerit good?
b) How are these present with teenage binge drinking?
c) What is the proposed solution?
d) How would this reduce the demerit good problem? Include a diagram in your answer



Unit 1: Market Structure: The casino industry

This article is about the casino market in the UK which appears to be on the verge of significant growth.
Read the article and then look at the list at the bottom of who currently owns what
a) How would you currently describe the market in terms of market structure? Are all/some of the criteria for any structure met?
b) What barriers to entry are there for the casino industry?
c) What change in market structure do you see happening?


Unit 2: Overcoming negative externalities: Parking fees

This article proposes parking fees related to the CO2 emissions of your car; ie the "polluter pays" idea.

Evaluate the effectiveness of such a scheme to reduce CO2 emissions


Monday, October 16, 2006

Unit 3: UK unemployment

This article updates the UK Unemployment position and explains why the rising unemployment figures may indicate that the UK economy is doing well! Perverse I know, but read the article


Unit 2: Inequality of income

A good article from the Guardian about inequality of pay in the UK and how the National Minimum Wage appears to have done little to close the gap.


Unit 3: Aggregate Demand

A post from Geoff Riley's blog showing the relative importance of the components of Aggregate Demand and how they have changed over time


Friday, October 13, 2006

Unit 2: Market dominance

An article from the Guardian showing how pervasive the influence of Tesco is across the country


Unit1 Barriers to entry

A few stories showing how a brand name can act as a barrier to entry,

Don't think this only happens overseas; if you try opeing a tore with "r us" after it (eg shoes r us) you will be proecuted by toys r us!



Unit 1: The price of Cocoa

From the article below, draw a diagram to show (and explain) the effect on the world price of cocoa. How big will the effect be? What will the effect be on other products, and why?


Unit 1: Demand

What effect would the following "scare story" have on demand for cereal from Sainsburys?

Who might benefit from this scare?


Wednesday, October 11, 2006

Unit 1: S&D and pay rates

Read this article from Geoff Riley and then ask yourself "What will happen to the pay of insolvency practioners?"

Will it go up? If so, by how much? What will determine the size of the pay rise?


Unit 1: Market structure

The market for Intrnet service providers is changing. This article is just one example of the market concentrating into fewer hands


Having read the article, look at the features of different market strucures. Which structure do you think best describes this market and why?

Monday, October 09, 2006

Unit 2: Market dominance

THis article suggests that airlines may have acted together to raise prices to consumers.

Why is this an example of market failure? What can the government do to rectify this state of affairs


Unit 1: The price of vanilla

Read this BBC article and then
a) Identify the demand side and supply side factors that have changed in the market for vanilla
b) Draw a S&D diagram to illustrate the change


Friday, October 06, 2006

Unit 3: International Trade

The EU has decided to extend tariffs on shoe imports; Read the 3 brief articles and then explain why. What will be the effect on the EU shoe market? Do you think this is a fair decision to take? Should the eastern countries effected retaliate?




Thursday, October 05, 2006

Unit 1: Demand

A great article from the guardian which explains why there has been a demise in the market for ringtones

1. Read the article and identify the factors
2. Which of the "factors effecting demand" are these?
3. Show the effect of these changes on a demand diagram


Unit 2: Market dominance: Tesco

Below are a series of articles relating to Tesco's half year results. Look at the arguments against allowing the free market to decide how dominant firms should become. What are you views, are Tesco now too dominant? If so, how could they be controlled?






Wednesday, October 04, 2006

Unit 2: Negative externalities

In this article BAA the airport operator argues against a flying tax to combat the negative externalities and have alternative proposals. Consider each. Which do you favour, AND WHY?


Unit 3: Interest rates and Inflation

This article from The Times explains how interest rates are used to control inflation


Unit 1: Supply and Demand; Oil Prices

Read the article and then draw a supply and demand diagam to show the price change described


Unit 2: Reducing Negative Externalities

An interesting article proposing a way to reduce negative externalities associated with air travel. There is though a flaw in the scheme. What is it?