Wednesday, December 30, 2009

Unit 1: The price of copper

A clip from the BBC on an impending strike at Chile's major copper mine

a) Using a S&D diagram, explain the effect of the strike on the world price of copper
b) Given the mine supplies 4% of total world copper, comment on the actual likely effect on the world price of copper

Monday, December 28, 2009

Unit 1: Absence from school: An example of information failure?

This BBC clip shows a wide discrepancy between truancy rates between social classes/income groups

a) What type of market failure is education normally classed as?
b) What are the 2 conditiond associated with such goods?
c) Does this video indicate information failure on the part of poorer households?
d) Why might this be the case? What else could account for the vastly different absence rates between income groups?

Saturday, December 26, 2009

Unit 1: Government action to reduce smoking

The BBC reports a new campaign to encourage people to quit smoking

a) What is the market failure associated with smoking?
b) To what extent do you believe such a campaign is likely to reduce the market failure associated with smoking?

Thursday, December 24, 2009

Unit 1: Government intervention to overcome the market failure asociated with "legal highs"

The BBC reports new laws banning chemical compounds which get you, allegedly, high

a) How does the free market for these compounds fail; ie why has the government banned these drugs?
b) Comment on how effective this ban will be in reducing the market failure

Wednesday, December 23, 2009

Unit 2: Import tarifffs on Chinese/Vietnamese shoes

This BBC clip (and article) explains the reasons for import tarifffs on Chinese/Vietnamese shoes video article

a) Why have the tariffs been imposed?
b) Using a diagram, show the effect of the tariff on imported Chinese/Vietnamese shoes
c) Given the tariff is 1.5 Euro on a 50 Euro pair os shoes, comment on the likely effectiveness of the tariff
d) How likely do you think the tariff has been in helping the survival of the European shoe industry?

Thursday, December 17, 2009

Unit 2: How interest rates effect economic growth

A nice analogy from marketplace; its a little simple, but it will get you thinking

a) Apart from less saving, why else does the consumption expand as interest rates fall?
b) Use the AD formula to explain why this will lead to the economy expanding
c) Show the effect of this increase in AD on an AD/AS diagram and comment on the beneficial and detrimental effects this may have on the governments macroeconomic objectives

Unit 2: Recession and government finances

Economics help has this great summary explaining why government finances deteriorate in a recession

Monday, December 14, 2009

Unit 1: Actions to reduce market failure: Volume limits on mp3 players

An interesting article/video from the BBC

a) What is the apparent market failure?
b) What type of corrective action is the EU proposing?
c) Comment on the likely success of the measure in reducing the market failure
d) Suggest alternative measures the EU could take

Unit 2: Macroeconomic stability

A useful post from tutor2u on macroeconomic stability

Sunday, December 13, 2009

Unit 1: Markets in action

A great liile BBC clip showing the workings of a Tanzanian fish market

a) Who supplies fish to the maket
b) Who buys fish in the market?
c) How is the market price determined for any fish?
d) Does this fish market meet the economic definition of a market?

Saturday, December 12, 2009

Unit 1: Problems with government actions to reduce tobacco use

This Ch4 article and video show one consequence of the government actions to reduce tobacco consumption

a) Why are the twin government policies of high indirect axation and regulation not reducing the market failure?
b) What further market failures arise from this "free" black market?
c) Suggest actions the government could take to reduce/eliminiate this black market
d) To what extent do you believe such policies would be successful?

Unit 1: Hand held mobile use while driving: A demerit good?

A great clip from the BBC

a) Define a merit good
b) Does driving while holding a hand held mobile represent an example of a demerit good? Explain your answer
c) Discuss how successful different government stratagies may be in reducing the market failure

Friday, December 11, 2009

Unit 1: The price of christmas trees

The BBC has this clip on the price of christmas trees

a) Using a S&D diagram, explain what is likely to happen to the price of nordmann fir christmas trees this year

Unit 2: The UK budget deficit

A great graphic from thre guardian

Thursday, December 03, 2009