Friday, May 30, 2008

Unit 2: Demerit goods:More legislation to reduce the availability of cigarettes?

This BBC clip outlines potential new plans to reduce cigarette consumption

More details of the plan and a video of the new information campaign are on this BBC article

a) To what extent do cigarettes meet the 2 criteria of a demerit good?
b) To what extent do you believe the proposals will reduce the market failure associated with cigarette consumption?
c) What other actions do government take to reduce cigarette consumption?

Monday, May 26, 2008

Unit 3: Tariffs in Mexico

The BBC reports that Mexico is to reduce tariffs on food imports

a) Why are Mexico reducing the tariffs?
b) Why do you believe they were imposed originally?
c) Why have they already been eliminated for trade with the USA and Canada
d) Using a S&D diagram, show the effect on Mexican food prices of a reduction in the tariff

Unit 2: Rising costs and rising prices

The BBC reports that taxi fares in Belfast are due to rise

a) Using a S&D diagram, explain why taxi fares are likely to rise

Unit 2: Legislation to reduce market failure: Cigarette displays

The BBC reports plans in Scotland to ban the display of cigarettes and possibly ban the sale of packets of 10

a) How does the cigarette market fail?
b) How likely would these 2 proposals be to reduce the market failure?

Unit 2: Tradable permits: Individual allocations for carbon trading

The BBC reports that MP's are suggesting looking further at the idea of personal carbon limits with trade in them

a) How would the system work?
b) Why might this be a better way of decreasing carbon emissions than increasing taxation
c) What major disadvantages and obstacles would there be to introducing the scheme

Friday, May 23, 2008

Unit 2: Negative externalities asociated with excess alcohol consumption

A frightening BBC video clip, and associated article, on the negative externalities (not to mention the private costs) associated with excessive alcohol consumption video article

a) What are the negative externalities associated with excessive alcohol consumption?
b) Why, in economic terms, is there excessive alcohol consumption?
c) What actions could the government take to reduce the market failure and lead to a more efficient allocation of resources

Unit 3: Disadvantages of imposing tariffs

From tutor2u comes this interesting insight into thenegative consequences of imposing tariffs on imports

a) Given the consequences outlined, what possible arguments could there be for keeping the tariff?

Unit 3: Inflation: Is the CPI an accurate measure

An interesting article from the financial times explaining why many people don't regard the CPI as an accurate reflection of their inflation rate

a) Having read the article, to what extent do you think the CPI is an accurate reflection of inflation in the economy?

Tuesday, May 20, 2008

Unit 1: The price of renting a property

The BBC reports that millions of people who rent their homes are facing big increases in the amount they pay each month. video

a) Using supply and demand analysis (including a diagram), explain why rents are rising
b) Using supply and demand analysis (including a diagram), explain why rents for flats in Leeds are falling

Unit 2: Reducing consumption of demerit goods: A smoking ban in Turkey

The BBC reports that Turkey has some of the world's highest smoking figures and a new ban is being widely flouted video

a) Why, in economic terms, is the smoking ban being introduced?
b) How successful do you think the ban might be when fully introduced in a years time?
c) How else could the Turkish government reduce the overconsumtion and misallocation of scarce resources?
d) What adv and disadv would there be to this approach?

Unit 2: Public and private goods: Revision

From Geoff Riley at tutor2u comes this great little revision summary on public and private goods

Monday, May 19, 2008

Unit 2: Information failure: How many units in a glass of wine?

This BBC clip and related article outlines the problem of information failure when deciding how much you should drink video aticle including 2 of the public information videos

a) If there is information failure, what sort of market failure does the alcohol market represent?
b) To what extent do you believe the public information campaign is likely to reduce the market failure?

Saturday, May 17, 2008

Revision videos for AS diagrams

Thanks to the help of a couple of students, I've posted a set of 10 videos on youtube that cover most of the diagrams needed for the AS Economics units (OCR, but should be similar for other exam boards). They can be found at

I'd welcome any feedback you leave (on youtube or direct to me at on how useful you think they are and other topics you think I could do similar videos for

Wednesday, May 14, 2008

Unit 3: What keeps inflation rising?

This BBC clip is a little on the simple side, but you should be able to get the economics out of it video

a) What sort of inflation is the UK apparently suffering from?
b) To what extent is monetary policy suitable to tackle this problem?

Unit 3: Conflicting macroeconomic objectives: The current position of the UK

This BBC clip outlines the position of inflation, unemployment and economic growth in the UK economy video

This is Mervyn Kings statement about the outlook for inflation; not very rosy to say the least! video article and analysis

Unemployment has also risen video article

a) What is happening to the macroeconomic objectives of economic growth, inflation and unemployment?
b) What is the conflict between the position of these objectives for the BoE in setting interest rates?

Tuesday, May 13, 2008

Unit 2: Negative externalities asociated with car pollution

An interesting report from the BBC outlining another negative externality that results from traffic pollution

a) Why would these blood clots be negative externalities?
b) How does the market fail
c) List 3 other negative externalities that arise from traffic pollution
d) Suggest an action the government could take to reduce this market failure and assess how successful it would be

Monday, May 12, 2008

Unit 3: Inflation in China

From the BBC comes an article and a video about rising inflation in China article video

a) What evidence is there from the 2 sources of cost push and demand pull elements to the inflation?
b) What is meant by the quote "China will export its inflation" and what effect will this have on the UK?
c) What actions could the Chinese govt take to try and reduce the inflation rate

Sunday, May 11, 2008

Unit 3: Inflation

From tutor2u comes this revision presentation on inflation. Some of it is aimed at A2 students but the last 3 slides are particularly useful in debating what measure should be used and the weakness of any measure

The Guardian had its FAQ business section on inflation this week; it contains a lot of useful information

Unit 3: The macroeconomic performance of the UK economy

From Geoff Riley at tutor2u comes this comprehensive summary of the UK macroeconomy; useful for putting policies in context

Saturday, May 10, 2008

Unit 3: The effect of a depreciating exchange rate on trade

This BBC article says that the US trade deficit shrank by more than expected in March as the weak dollar led to a surge in exports and a fall in imports

a) Using a numerical example, explain why exports rose and imports fell

Wednesday, May 07, 2008

Unit 2: Tradable permits: Carbon trading in action

This BBC article shows how the carbon market is growing, how it should work and some of the drawbacks

Unit 3: Consumption and its determinants

This BBC article explains how consumption may be effected by rising food and fuel prices leaving les for discretionary spending by consumers

Unit 2: Demerit goods: Cannabis reclassified

The BBC reports in this video and article that cannabis is to be reclassified as a class B drug

a) What are the 2 criteria for a demerit good?
b) To what extent is cannabis a demerit good?
c) To what extent do you think this stricter regulation to try and limit supply will decrease the market failure?
d) To what extent do you think a stratagy which aimed to reduce demand for cannabis by imposing a tax on cannabis and/or improving information to cannabis users would be more succesful in reducing the market failure?

Sunday, May 04, 2008

Unit 1: Cross elasicity of demand: The price of oil and the demand for..........camels!

From the blog of the Harvard economist Greg Mankiw, comes this great example of cross elasticity of demand

a) What is the formula for cross ED?
b) In this example, would the figure be positive or negative?
c) What therefore is the relationship between the price of oil and the demand for camels?
d) Would you expect the number to be more or less than one? Explain your answer
e) How do you think the XED number has changed as the price of oil has risen rapidly over the past year?

Friday, May 02, 2008

Unit 1: What shifts the supply and demand curves?

From the tutor2u blog comes this post including a comprehensive list of what shifts S&D; ideal for revision

Thursday, May 01, 2008

Unit 3: Expansionary macro policy in action in the USA

A great clip from the BBC showing how the US authorities are trying to stimulate the economy

a) What policies are the US authorities using?
b) How should they stimulate the US economy?
c) Draw a diagram to show this effect
d) Why might the policies not be effective?