T-Shirts and consumer choice
Firstly, I hope the first AS exam went well, whether that was macro (OCR), micro, and whether for the first time or a retake. I also hope that in amongst the revision you’re in the market for a more random blogpost…
This one’s a topic on which Paul Ormerod would have something to say. On NPR’s Planet Money radio show/podcast, they’re launching a T-shirt, and using this as a stimulus for a whole set of reporting on its genesis, from cotton subsidies to its design. The latest podcast investigated the colour of their T-shirts. “What’s the economics in that?”, I hear you cry…
Revision Quiz: A2 Economics: Perfect Competition (1)
This 10-question revision quiz focuses on the model of perfect competition.
Launch Revision Quiz: A2 Economics: Perfect Competition (1)
econoMAX - Behavioral Finance
Mark Johnston provides this introduction to behavioural finance. As with behavioural economics, the conventional view of finance assumes that markets are efficient and that the price of shares, bonds and other financial instruments are a reflection of the fundamental economic values that they represent. Behavioural finance is all about understanding why and how financial markets are inefficient. If there is a difference between the market price of a share or bond and its fundamental value then in conventional economics no one can make money in financial markets by exploiting the difference.
read more...»Unit 3 Micro: Business Economics News Stories
This Scoop It Board is curated daily to add new content and commentary on market and industry news relevant to A2 micro unit 3 students.
read more...»Unit 3 Micro: Business Economics Glossary (EdExcel)
Here is my current Business Economics glossary designed for the EdExcel unit 3 economics paper
read more...»Unit 3 Micro: Scoop-It on Market Structures
Matt Smith has been curating a Scoop-It collection of news stories connected to unit 3 microeconomics and specifically the economics of market structures. Click here to view it.
The #econ3 hashtag is a great way for A2 students to follow a growing number of teachers who post ideas, links and advice on Twitter. Likewise use #econ4 for tweets focused on A2 macroeconomics.
The 2012 GCSE fiasco - are there parallels with the Banking crisis?
Now, tutor2U is an organisation dedicated to supporting and building communities for teachers and lecturers. So, if I post a blog that criticises the report released today by Ofqual which suggests that some teachers over-graded coursework (particularly in English) during this summer's GCSE assessments you might accuse me of bias. To paraphrase Jeremy Clarkson: "You would say that - you drive a Citroen Picasso." However, in my never-ending pursuit of trying to find examples that resonate with young students of economics, is it possible to draw parallels with what happened during the GCSE assessment this year, and the mistakes made within the banking industry that lead to the current recession?
read more...»Using McDonald’s as an example - I’m loving it
I was told off this week by my students for using McDonald's as an example to illustrate my point yet again. In fact it was the second week on the trot that I was reprimanded as they told me previously that I was always peppering my conversation with Latin phrases "'cos it makes you sound more clever."
"No I don't," I replied - I've told my students a million times not to exaggerate. The offending example came as I was attempting to explain how fatty foods (especially those from the exalted temple of the Golden Arches) were a demerit good. I thought about it for a little while and realised that two weeks ago I'd told them about the use of 'stars' to motivate McDonald's staff and their extensive training programmes when we discussed labour productivity. I'd also mentioned them when we discussed possible issues relating to economies of scale and the fact that a homogenised world can lead to less choice (a weak argument in their view - a McDonald's in every town sounded like a wonderful idea) and discussed the use of persuasive advertising as an example of non-price competition. They were right, I seemed to be talking about McDonald's all the time - and I'm a vegetarian!
"Mea culpa," I confessed.
read more...»Unit 3 Micro: The Rise of Dynamic Ticket Pricing in Sport
Here is the link to the article
West Coast Rail Line franchise decision - a fine example of Government failure
Every cloud has a silver lining! News reports out today confirmed that the original decision to award the next 15 year franchise of the West Coast Rail line to FirstGroup instead of the incumbent Virgin Rail has been rescinded and the bidding process re-opened at a potential wasted cost of £40 million (by the way, have they fixed that leaky roof at your school yet?). This may seem like a fiasco to train users and the general public alike but to us Economics teachers it's a super example of government failing to intervene correctly in a market.
read more...»Paul Ormerod: We are all better off than we think
Apple’s iPhone5 has already smashed sales records. The first day on which consumers could make purchases over the web, more than 2 million online orders were placed. Little wonder that JP Morgan has estimated that sales of the iPhone5 could add as much as 0.5 per cent to American GDP. These numbers have attracted criticism. If consumers simply buy iPhones instead of other products, it is hard to see how output could be boosted by such an amount.
read more...»Unit 3 Micro: Microsoft launches a tablet to challenges Apple’s dominance
A potentially important moment for the contestability of the tablet market. Technology giant Microsoft has unveiled its touchpad tablet computer. The “Surface” will face tough competition from Apple’s iPad and many other devices including those made by Samsung. These video resources provide some background. The Surface tablet computer will not be available until the Autumn on 2012.
read more...»BMW - Bavarian Monopolist at Work
BMW have been fined SFr156m ($163m) by Swiss Competition Authorities for restricting the supply of BMW and MINI cars to Swiss purchasers.
read more...»Made in China - but not quite so cheaply…...
How long can China keep its comparative advantage of cheap production for manufacturing goods? We are aware of rising inflation in China which is eroding their advantage, and here is an article about a UK firm which manufactures cushions, some from a factory in Kirkby on Merseyside and some from his factory in the Zhejiang province in China. The story comes from a programme ‘The Town taking on China’ to be shown on BBC2 at 8pm tonight - and subsequently on i-player.
read more...»Unit 3 Micro: Key Diagrams for Business Economics
Here is a revision download containing some key theory diagrams and accompanying explanation for topics in business economics / theory of the firm / market structures.
Key_Diagrams_A2_Business_Economics.pdf
read more...»Unit 3 Micro: Revision on Contestable Markets
This blog links to an updated revision presentation on the economics of contestable markets.
read more...»Unit 3 Micro: Post Office Threatens Smaller Photo Businesses
As the Royal Mail moves towards an initial public offering the business is searching for as many ways as possible of expanding their revenue base to maintain the viability of hundreds of local post offices. One service is the lucrative market for passport and driving licence photos - a product that I suspect has a fairly low price elasticity of demand, I paid £5 for 5 photos in a train station the other week! This Channel 4 news video looks at the battle between the Post Office and independent private sector photo retailers who claim the government is skewing the market against independent shops by giving the Post Office a contract to renew driving licences and threatening to do the same for passports.
read more...»France and Flexible Employment
This article could be useful as an illustration of the EU context in relation to employment in general, and flexible employment in particular. Attracting inward FDI is arguably a significant benefit of UK membership of the EU, and one of the advantages which the UK can offer compared to, say, France is relatively flexible employment laws.
read more...»Unit 3 Micro: Contestable Markets - Lucozade takes on Coca Cola
A sparkling hat tip to Pete Davies for spotting this one. 1.7 billion litres of cola drank were drunk globally in 2010 & now Lucozade (owned by GlaxoSmithKline) wants a slice of the action! with the launch of Lucozade Energy Cola. They already have a well-established position in the energy drinks market. Can they overcome possible consumer resistance to this product and brand extension?
Marketing Week reports something revealing about their point of sale strategy. Lucozade Energy Cola has already reached retailers ahead of the launch apparently with written guidelines for shopkeeprs asking for it to be stocked in the “energy drink section on the chiller”, but placed “next to the coke selection where possible.!
Maybe the new product will find a way into the secret stashes of this Manchester schoolboy entrepreneur?
Competition Plan for Universities
So the Universities White Paper has been published. Words like “Competition” on news feeds instantly make me sit up and take notice. As my Year 12s embark on their odyssey into market structures and ever more close encounters with efficiency, I think this might just be the case study of the moment. After all its subject matter is foremost in many of their minds.
read more...»Do you agree that the government should provide support to the UK car industry?
This is a fairly classic A2 macroeconomics question, and one that the European Automobile Manufacturers Association has been considering at their meeting in London last week. Their conclusion? That non-European governments should scale back assistance for their own automotive industries, but at the same time governments in Europe should support the industry’s efforts to cut car emissions.
read more...»A2 Micro: Competition Policy
The aim of competition policy is promote competition; make markets work better and contribute towards improved efficiency in individual markets and enhanced competitiveness of UK businesses within the European Union single market.
read more...»A2 Micro: The Importance of Profit
Profit measures the return to risk when committing scarce resources to a market or industry. Entrepreneurs take risks for which they require an adequate rate of return. The higher the market risk and the longer they expect to have to wait to earn a positive return, the greater will be the minimum required return that an entrepreneur is likely to demand. Economists distinguish between different types of profit – explained below:
read more...»A2 Micro: Market Structure, Conduct & Performance
This updated revision presentation is designed to help students preparing for markets-related topics on A2 economics specifications.
Market Structure Conduct & Performance - revision presentation
Download printable (pdf) slide handout
read more...»Unit 3 Micro: Perfect Competition
A revised revision presentation on perfect competition comes in three formats
Streamed presentation can be found here
read more...»A2 Micro: Competition and Efficiency
Are highly competitive markets most likely to lead to outcomes that achieve economic efficiency? The common characteristics of markets that are considered to be “competitive” are:
read more...»Electric cars: government failure?
There was a great in-depth look at activity in the car market in the Sunday Times yesterday with regards to electric powered vehicles.
read more...»AS Micro Revision: Market Power
A revision note on aspects of industries in which there is strong market power among one or a few businesses. Most markets are competitive with a number of suppliers (producers) competing for the demand of consumers. Some are more competitive than others. At AS level it is important to understand some of the factors that lead to market (monopoly) power and to evaluate the costs and benefits of markets where monopoly power exists together with the effects of different types of government intervention. The revision note is available to download here: Revision_Market_Power.doc
Smartphones and Creative Destruction
Is the multi-function and ubiquitous smartphone one of the best examples of creative destruction. This article “10 Things Killed by the Smartphone” points to a clutch of devices and products whose demand has been affected by the mass volumes of data-heavy smartphones that now dominate the market.
MP3 Players
Nintendo 3DS and Sony PSP
Point-and-Shoot Cameras
Personal Video Players
Voice Recorders
Portable GPS Navigation Devices
Personal Digital Assistant (PDA)
Wristwatch
iPod Nano
Paper Maps
Telephone Directory Assistance
A2 Micro: Updates on Competition Issues
Here are some links to recent news stories on competition and monopoly issues in the UK and the EU Single Market
read more...»
