Unit 1: The demand for cider

The BBC reports sales of Magners cider have decreased

http://news.bbc.co.uk/1/hi/business/7270621.stm

a) Which of the determinants of demand has changed?
b) Draw a demand diagram to show the effect of this change

Unit 2: Market failure: Plastic bags and M&S

From the BBC comes this article about M&S charging for plastic bags

http://news.bbc.co.uk/1/hi/uk/7268283.stm

The interview with Stuart Rose can be seen at

http://news.bbc.co.uk/player/nol/newsid_7260000/newsid_7268500/7268509.stm?bw=bb&mp=rm&asb=1&news=1&bbcws=1

a) What is the market failure with plastic bags?
b) In what way does M&S's action internalise the externality?
c) What evidence is there in the article/interview to suggest that the market failure is likely to be reduced by M&S's action?

Unit 1: The price of wheat at record levels

The BBC reports that the price of wheat has hit an all-time high

http://news.bbc.co.uk/1/hi/business/7264239.stm

a) Using the information in the article, explain what has happened to the demand for wheat
b) Using the information in the article, explain what has happened to the supply of wheat
c) Using a diagram, explain what has happened to the price of wheat

Unit 1: The price of wheat at record levels

The BBC reports that the price of wheat has hit an all-time high in these 2 articles

http://news.bbc.co.uk/1/hi/business/7264239.stm

http://news.bbc.co.uk/1/hi/business/7264653.stm

Using the 2 articles,
a) Explain what has happened to the demand for wheat
b) Explain what has happened to the supply of wheat
c) Using a diagram, explain why the price of wheat has risen

Unit 2: Negative externalities; river pollution

The BBC reports this classic example of a negative externality

http://news.bbc.co.uk/1/hi/world/asia-pacific/7266364.stm

a) Using evidence from the article, explain why this pollution is an example of a negative externality
b) What action could the government take to try and ensure such an episode doesn't happen again?

Unit 2: Alcohol consumption; Market failure through negative externalities and possible solutions

From the tutor2u blog comes this great summary of the econ omic consequences of alcohol consumption

http://www.tutor2u.net/blog/index.php/economics/binge-drinking-taxes/#When:14:21:01Z

a) List the 3 negative externalities identified from excesive alcohol consumption
b) Select 2 of the possible solutions suggested and discuss whether or not they would be more successful in decreasing the negative externalities associated with alcohol consumption than would be an increase in tax on alcohol

Unit 2 Market dominance: Tesco

An interesting graphic from the Guardian. Welcome to Tescoland!

http://image.guardian.co.uk/sys-files/Business/documents/2007/11/01/Graphic_UK_supermarkets.pdf

Unit 1: The price of oil rises

This BBC clip reports that the price of oil has surged to yet another record, closing at just over $100 a barrel in New York.

< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7250000/newsid_7254200?redirect=7254244.stm&news=1&bbwm=1&bbram=1&nbram=1&nbwm=1&asb=1 >

a) Using a S&D diagram, explain why the clip suggests the price of oil has increased

Unit 1: Rising costs and rising consumer prices

Three stories from the BBC today about firms wishing to raise prices

http://news.bbc.co.uk/1/hi/business/7252144.stm Cadburys

http://news.bbc.co.uk/1/hi/business/7252328.stm Scottish and Newcastle

< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7250000/newsid_7252900?redirect=7252911.stm&news=1&bbram=1&bbwm=1&nbwm=1&nbram=1&asb=1 > Australian wine

a) Using a supply and demand diagram, explain why the increased costs of production will lead to an increase in the prices that consumers will have to pay for Cadburys and S&N products
b) Using a supply and demand diagram, explain why the price of Australian wine is rising

Unit 2: Correcting market failure: The Irish plastic bag tax

From tutor2u comes this example of the success of government action to correct a market failure

http://www.tutor2u.net/blog/index.php/economics/comments/irish-plastic-bag-tax/#extended

a) What is the market failure that arises from the use of plastic bags?
b) How does the free market in plastic bags fail?
c) Using a diagram explain how the imposition of a tax on each bag should reduce the market failure
d) How important do you think the public information campaign appears to have been in reducing consumption of plastic bags?

Unit 2 Market failure; the London congestion charge

From tutor2u comes this update on Ken Livingstones latest plan to charge 4x4 drivers a higher congestion charge

http://www.tutor2u.net/blog/index.php/economics/the-london-pollution-charge/#When:21:29:00Z

a) In what way will this alteration to the charging system internalise the externality and make the polluter pay?
b) Suggest reasons why this system may not really internalise the externality

Unit 3: Unemployment figures

From tutor2u comes an article showing the latest unemployment data

http://www.tutor2u.net/blog/index.php/economics/good-job/#When:20:29:01Z

Unit 2: Positive externalities: Fluoride in water

The BBC reports that the government wants areas with high levels of tooth decay to consider fluoridation in water.

< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7220000/newsid_7227600?redirect=7227615.stm&news=1&nbwm=1&bbram=1&nbram=1&bbwm=1&asb=1 >

a) Define what is meant by a positive extenality
b) Using the definition, explain the likely positive externalities that will arise from fluoride in water

Unit 2: Negative externalities associated with road pollution

The BBC reports that there are calls for a bypass in a town where nitrogen dioxide levels exceed national guidelines.

< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7230000/newsid_7232900?redirect=7232908.stm&news=1&nbram=1&nbwm=1&bbram=1&bbwm=1 >

a) Explain why this pollution is an example of a negative externality
b) Evaluate the likely success of the bypass as a means of reducing the negative externality

Unit 1: The price of cauliflowers

The BBC reports that the mild winter and early spring has produced an excess of Cauliflower for growers in west Cornwall, which has forced their prices down.


< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7220000/newsid_7220200?redirect=7220235.stm&news=1&bbram=1&nbwm=1&bbwm=1&nbram=1 >

a) Using a supply and demand diagram, explain why the price of cauliflowers has fallen
b) Use the supply curve to explain why some farmers are ploughing the cauloflowers back in to the soil rather than selling them in the market

Unit 2: Negative externalities associated with wind farms

The BBC reports that plans for a wind farm on the Isle of Lewis in Scotland have run into fierce opposition.

< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7240000/newsid_7240200?redirect=7240238.stm&news=1&bbram=1&nbwm=1&nbram=1&bbwm=1&asb=1 >

a) List private costs and benefits associated with the scheme
b) List external costs and benefits associated with the scheme
c) If, as is suggested the government is minded to reject the project, what would you expect the outcome of a CBA to show?

Unit 2: Government failure: The smoking ban

The BBC eports that the smoking ban has led to a huge increase in cigarette butts piling up on Britain's streets.

< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7230000/newsid_7236100?redirect=7236187.stm&news=1&nbram=1&bbwm=1&nbwm=1&bbram=1&asb=1 >

a) Why might this be seen as an example of government failure?

Unit 1: The demand for chicken

The BBC reports that supermarket sales of free-range chicken spiked last month after a promotion with TV celebrity chefs.

< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7240000/newsid_7244200?redirect=7244211.stm&news=1&bbram=1&nbwm=1&nbram=1&bbwm=1&asb=1 >

a) Which determinant of demand has changed
b) Use a diagram to explain what has happened to the demand curve

Unit 3: Inflation rises to 2.2%

This BBC article explains the latest rise in inflation

http://news.bbc.co.uk/1/hi/business/7240435.stm

This clip shows in more detail the contrasting movements of different prices

< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7240000/newsid_7240900?redirect=7240905.stm&news=1&nbwm=1&nbram=1&bbwm=1&bbram=1&asb=1 >

This clip shows the Bank of England view of the state of the economy

< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7240000/newsid_7243300?redirect=7243347.stm&news=1&nbwm=1&nbram=1&bbram=1&bbwm=1&asb=1 >

a) What measure is used to record inflation in the UK?
b) How can inflation be rising if the prices of clothes, audio visual products and cars are falling?
c) What sort of inflation is the UK experiencing? Explain your answer

Unit 2: Negative externalities: Windfarms

Along with all the usual complaints about windfarms from the BBC comes this unusual externality story

http://news.bbc.co.uk/1/hi/uk/7227967.stm

a) Using the definition of a negative externality, explain why this effect is a negative externality

Unit 3: Supply side policies to reduce unemployment

From Geoff Rileys blog comes this article on supply side policies in action

http://www.tutor2u.net/blog/index.php/economics/comments/back-into-work/#extended

a) From the article and video clip, explain how such supply side policies should reduce unemployment
b) To what extent do you believe supply side policies alone can reduce unemployment?

Unit 3: Rising interest rates and the effect on the Australian economy

From Geoff Riley's blog comes this economics packed summary of the Australian economy and their use of interest rates

http://www.tutor2u.net/blog/index.php/economics/comments/australian-interest-rates/#extended

The BBC also has an article

http://news.bbc.co.uk/1/hi/business/7228153.stm

a) Using an AD/AS diagram, explain the current position of the Australian economy
b) Using an AD/AS diagram, explain the effect on the economy that the monetary authorities hope these interest rates will have
c) What factors will determine whether these interest rate rises will have the desired effect?

Unit 2: Government provision of merit goods; Healthcare in the USA

The BBC reports that healthcare has become a key election issue in the US with nearly 50 million Americans without insurance.

< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7220000/newsid_7223600?redirect=7223635.stm&news=1&nbwm=1&bbram=1&nbram=1&bbwm=1&asb=1 >

a) Why is healthcare considered to be a merit good?
b) Why is it underconsumed in the free market of the USA?
c) What is the UK government solution to this problem?
d) Assess the success of the alternative approaches of the USA and UK to the provision of health care

Unit 1: The price of coal

The BBC reports the price of coal has risen to an all-time high

http://news.bbc.co.uk/1/hi/business/7225682.stm

a) Using a supply and demand diagram, explain why the price of coal has risen

Unit 2: Costs and benefits associated with opening the Alaskan wilderness to development

The Guardian reports that the US government has announced plans to open more than 3m acres (about 5,000 square miles) of Alaskan wilderness to logging, mining and road building

http://www.guardian.co.uk/environment/2008/jan/29/conservation.environment

As an economist I would hope that the US government conducted a CBA before deciding to open up the region, but I have my doubts

a) List the private costs and benefits and the external costs and benefits of developing the region
b) Given that the decision has been taken to open up the region, what do you think the outcome of such a CBA might be?
c) Why might the government not have followed the outcome of the CBA when coming to this decision?

Unit 2: Negative externalities associated with underage drinking

The BBC reorts that the police are to get new powers to confiscate alcohol from under-18s who drink in public

http://news.bbc.co.uk/1/hi/uk_politics/7224701.stm

a) Why is the government introducing this new legislation?
b) How does the free market result in market failure?
c) To what extent do you believe the new law will reduce the market failure?

Unit 2 : Information failure and government action

The BBC reports that the Health Secretary Alan Johnson is to call this week for fluoride to be added to Britain's water supplies.

http://news.bbc.co.uk/1/hi/health/7224743.stm

a) Why is fluoride underconsumed in the free market?
b) What type of market failure is therefore present?
c) Why is the government proposing this action?
d) To what extent do you think the government legislation is likely to reduce the market failure?

Unit 2: Negative externalities: London's £200 lorry charge

These 2 BBC clips and the report explainthat heavy polluting lorries will be charged £200 to enter London from Monday, as part of a drive to improve the city's air quality.

http://news.bbc.co.uk/player/nol/newsid_7220000/newsid_7222400/7222463.stm?bw=bb&mp=rm&asb=1&news=1&bbcws=1

http://news.bbc.co.uk/player/nol/newsid_7220000/newsid_7225600/7225647.stm?bw=bb&mp=rm&asb=1&news=1&bbcws=1

http://news.bbc.co.uk/1/hi/england/london/7225527.stm

a) How does the free market fail where these polluting lorries are concerned?
b) Using a diagram, explain how the £200 charge should reduce the market failure
c) What other actions can the owners take other than paying the £200?
d) How will the authorities back up the legislation?
e) To what extent do you believe the new charge will succeed in reducing the market failure?

This later clip shows how one firm has reacted to the charge

http://news.bbc.co.uk/player/nol/newsid_7220000/newsid_7226600/7226619.stm?bw=bb&mp=rm&news=1&bbcws=1

Unit 2: Market dominance and the Competition Commission: Video games retailers

Geoff Riley's blog has this interesting story of the Competiton Commission allowing a merger between the 2 major video games retail chains

http://www.tutor2u.net/blog/index.php/economics/game-and-game-station-merger/#When:22:59:00Z

a) What possible market failure might arise fron the merger; ie on what grounds could the merger have been blocked?
b)Why was the merger allowed? Do you think the merger is economically sensible?