Unit 1 Micro: Revision Presentation on Government Intervention
Here is a short 35 slide revision presentation on government intervention in markets designed for AS microeconomics revision
read more...»Unit 1 Micro: Revision Presentation on the Price Mechanism
Here is a slide share presentation on the price mechanism in action focused in students taking their AS microeconomics papers.
read more...»Unit 1 Micro: Revision Blogs on Markets and Intervention
Here is a selection of a recent blog resources on topics that appear on the core Unit 1 Syllabus focusing on changing market prices and examples of interventions to address perceived market failures
read more...»Unit 1 Micro: Minimum Wages and Living Wages
The campaign for a living wage has gained renewed prominence in the last year or so. Students and teachers wanting to know more about the minimum and the living wage debate might find this background blog from Channel 4 news relevant and useful. More here on the living wage from the Citizens UK web page.
Unit 1 Micro: Revision on Producer Surplus
Here is a planned answer to an exam question on producer surplus
“The demand for cider falls. Using a diagram, explain what happens to producer surplus.”
read more...»Unit 2 Macro: Revision on Interest Rates and the Exchange Rate
The exchange rate measures the external value of sterling in terms of how much of another currency it can buy. E.g. in July 2011 £1 would buy you $1.65 and Euro 1.17. The daily value of the currency is determined in the foreign exchange markets (FOREX) where billions of $s of currencies are traded every hour. The value of the pound in the currency markets depends in how strong is demand for the currency relative to supply
Many factors affect the external value of one currency against another and one of these factors is the level of interest rates in a country compared to other economies. Money moves around the world economy seeking the best risk-adjusted rate of return. The rate of interest available on deposit in the banking system of a particular country is a factor that might drive what are known as “hot money” flows into and out of a particular currency.
read more...»Unit 1 Micro: The Collapsing Price of Carbon
The price of carbon emissions permits inside the EU’s emissions trading system has fallen to a record low. A sharp fall in total CO2 emissions in Europe has been the driving factor behind the fall in the carbon price. Last year Germany’s CO2 emissions fell by 1.2% and the UK saw a 7.2% reduction. The overall decline in the 27 country ETS was 2.4% in 2011 causing the carbon price to drop below 7 Euros per tonne.
read more...»Unit 1 Micro: Revision on Producer Subsidies
Here is a planned answer to an exam question on producer subsidies
“Discuss the likely effects of a EU beef subsidy on the market for beef production in Wales”
read more...»Unit 1 Micro: Nottingham introduces workplace parking tax
Nottingham has become the first major city in the UK to introduce a compulsory workplace parking levy (WPL). Businesses in Nottingham with more than 10 parking spaces will have to pay an annual charge to the council of £288-per-space.
Critics of the scheme argue that the levy will add to costs and damage profits at a time when the local economy is struggling to drag itself out of recession. They believe that the levy will be an unfair extra charge for people who work shifts or live in areas without adequate public transport have to drive. The Taxpayers’ Alliance which is a fierce critic of what they see as inefficient local government opposes the WPL and say that 96% of Nottingham businesses in the area oppose the charge, with 62% of those businesses claiming that they would now consider relocating their interests.
The council’s defence is that the revenue from the levy will be hypothecated - that is the money will be earmarked to help fund improvements to Nottingham’s tram system, infrastructure with long term economic benefits. Other transport projects will be allocated funding from the tax.
Pricing to ration scarce parking space is an attempt to manage demand for car use within the city centre and to tackle congestion particularly at peak periods. Other cities are said to be interested in launching similar schemes and Nottingham’s experience may well tell us how quickly it will be rolled out in the years to come. A key decision for many businesses is whether to pass on the charge to their employees.
How will the charge be likely to affect:
1/ Demand for city park and ride schemes?
2/ Demand for Nottingham’s tram system?
3/ Demand for tele-working among Nottingham’s businesses
4/ Profits for businesses with more than 10 workers inside the parking levy area?
5/ Demand for public car parks
read more...»
Unit 1 Micro: Revision on Maximum Rents in Housing
The housing sectors of many towns and cities around the world have often been the target for different forms of government intervention including planning regulations, subsidies and direct price controls.
Price controls are legal restrictions on how high or low a market price may go. They can take two forms: a price ceiling, a maximum that price sellers are allowed to charge for a good, or a price floor, a minimum price buyers are required to pay for a good.
Our focus in this blog is the decision by the authorities in New York to extend arrangement for rent controls for a million rent-regulated units in the Big Apple. This provides an opportunity to look at the basic supply and demand analysis for housing rent controls and build a critical evaluation of some of their effects.
read more...»Unit 1 Micro: Revision on Producer Cartels
Here is a planned answer to this Unit 1 question
“Explain how a producer cartel might affect the supply, market price and output levels of a commodity as well as total revenue for producers”
read more...»Unit 1 Micro: The Tax on Beer
In the lead up to the 2012 Budget, this short BBC news video clip looks at the cost of a pint of beer and claims that some brewers have weakened their beer to avoid the higher excise duty on higher-strength drinks. There is a neat explanation of the breakdown of beer costs and students may be surprised to find out the amount of tax they pay if they drink a pint! About 95p from every pint goes to the government.
Higher taxes have been one factor bringing down consumption levels. There has been a 13 per cent decline in alcohol consumption per head in Britain since 2004. The percentage of men aged 16-24 who drank more than 21 units per week has fallen from 32 per cent to 21 per cent from 2005 to 2010
Here is the link And here is the related article from the BBC’s John Moylan
read more...»Unit 1 Micro: Inequality - The Rise of Fuel Poverty
A new report headed up by Professor John Hills from the LSE highlights the growing risks of fuel poverty facing millions of people in the UK and especially those living in lower-income families. At present, the definition of fuel poverty based on whether a household needs to spend more than 10 per cent of its income each year on energy. But this measure has been criticised because it ignores the significant seasonal variation in energy bills and the financial distress that a really large bill can have on people with little or not savings to fall back on.
read more...»Unit 1 Micro: Government launches New Buy Loan Guarantee Scheme
Here is a fresh attempt by the British government to breathe life into the moribund housing market. People in England are being offered financial help to climb onto or up the housing ladder as the government’s new mortgage indemnity scheme launches. Under the terms of the scheme, both the construction industry and taxpayers will act as co-guarantors on new homes bought by existing or first-time buyers. Will it work in boosting demand for new build homes? Is this scheme designed to help house-buyers or builders? Or is there a real risk of government failure?
Basics:
* Builders will pay 3.5 per cent of the price of the home
* Taxpayers will provide an additional guarantee of 5.5 per cent that will only be used if there is a major property crash.
* Mortgage lenders will be able to lend up to 95 per cent of the sale price which means new buyers in many instances will only need to find a five per cent deposit or £10,000 on a new £200,000 home. The typical deposit on a mortgage now is closer to £36,000
* The scheme is available on houses and flats valued under £500,000 in England only
Unit 2 Macro: Might Oil Prices Bring another Recession?
The international price of crude oil has been rising strongly in recent weeks and threatens to be an external factor driving an already weak Euro Zone and UK economy back into recession.
read more...»Unit 3 Micro: Video Resources on Carbon Taxation
The crucial issue of how best to tackle climate change and make significant progress towards a low-carbon economy is one that gives students tremendous opportunities to hone their analysis and evaluation skills. A few weeks ago the Australian government was successful in getting through the Senate proposals for a new carbon tax and in this blog we link to some excellent video reports on the background to this decision.
read more...»Unit 3 Micro: The Economics of Solar Subsidies
This blog provides a link to a new prezi presentation on the economics of solar subsidies - I have been using it as part of my teaching on aspects of environmental economics for Unit 3 AQA but it might also be useful for unit 1 market failure. I have kept theoretical diagrams out of it and plan to build up relevant analytical concepts such as economies of scale, consumer subsidies, economic and social welfare, government failure et al on a normal whiteboard rather than embed them into the Prezi. I hope it is useful.
Follow the tags at the bottom of the blog entry for more recent articles on solar subsidies such as feed-in-tariffs and other environmental economic resources.
read more...»Petrol, tax, and the downward sloping demand curve.
Nearly every country has a tax on petrol, although the amount varies widely. And given that the landed price of petrol is quite similar (see the graph below), it can be seen what effect the tax has on quantity demanded. The results are very much in line what economic theory would predict and there are also clear implications for countries that want to reduce petrol consumption.
read more...»Unit1 Micro: Can a minimum wage create jobs?
Tim Harford has a piece in his regular column in the Financial Times which discusses some of the issues surrounding the minimum wage and whether a legal pay floor can actually create jobs. Here is the link
Unit 3 Micro: World’s Largest Solar Plant Opens
This autumn the world’s biggest solar plant power station opened in Spain. Comprising 600,000 parabolic mirrors, the Andasol 3 CSP plant is the size of 70 soccer fields and has 88km of piping. The economies of scale are huge and if solar power is going to work and be viable anywhere it is probably here or in North Africa.
read more...»The future’s not so bright for Orange(s)?
This week, the price of orange juice concentrate on the global market hit a record high, reaching $2.12 (£1.38) a pound (0.45kg).
read more...»Unit 3 Micro: Prezi on Environmental Economics
This term I am teaching some environmental economics to my A2 groups. The link below provides access to a Prezi on aspects of environmental issues such as the Tragedy of the Commons and the economics of waste and pollution. I will be updating and extending the Prezi as I develop the lessons. I hope that it is useful. I will try to include as many examples as I can on European and Global issues to do with environmental issues - the beauty of a Prezi of course is the flexibility of ordering course materials and the chance to embed lots of vivid You Tube clips and images into the resource.
read more...»Unit 1 Micro: Prezi on the Economics of Negative Externalities
This blog provides a link to a constantly updated revision Prezi on negative externalities and market failure - designed for students taking AS Microeconomics Unit 1 and those studying externalities for the IB Diploma. The Prezi contains lots of short news videos on examples of externalities. Click on the link below to access the Prezi.
read more...»Unit 1 Micro: Biomass Subsidies and Timber Prices
If you are a fan of laminate flooring, wood panelled walls or neat wood-based fencing for the garden, the chances are that you will be paying higher prices in the years ahead. Despite the Britain offering a temperate climate for a plentiful supply of wood and a well organised system of land registry and plantation management, the UK market price of different types of timber has shot up over the last two years.
read more...»European Economics: Resources on the CAP
This blog entry will provide a regularly updated set of links to resources to the European Union’s Common Agricultural Policy and attempts to reform this contentious and complex system of farm support.
Check below for suggested links
read more...»Unit 2 Macro: The UK Housing Market in 2011
This blog provides a chart-based overview of developments in the UK housing market in 2011. The housing industry has a big effect on macroeconomic variables such as output, employment and investment. Has there been a marked recovery in property prices, new housing starts and mortgage lending?
read more...»Unit 1 Micro: 50 Years since the end of the Max Wage in Football
Around this time of my micro course my students look at maximum prices (price ceilings) in different markets. There are still plenty of contemporary examples to consider, for example salary caps for executives, caps on the cost of mobile phone texts and roaming charges, rent ceilings etc. But here is a resource that will be of special interest to football-loving economists, namely the 50th anniversary of the ending of the maximum wage in football. The Independent has this nifty set of graphics looking at landmarks in wages of top footballers over the years. Click on: The maximum wage and football’s money trail
Government Plans to boost the Housing Market
The Government has announced today a scheme to help first time buyers on to the property ladder. It has been reported widely in the press with mixed reactions. The BBC article outlines the main proposals (here is the link to The Daily Telegraph). It is interesting from a political point of view that this government should chose to intervene in this market, though perhaps we should not be too surprised as it was the Conservatives that brought in the ‘Right to Buy’ legislation in 1980.
read more...»Unit 1 Micro: Has the time come for a Tobin Tax?
This week I am setting my AS micro students a question on proposals for a Tobin Tax - partly because it is hugely topical and also as a way of developing their evaluation skills on paper and coming to a reasoned final conclusion. Here are some of the links to suggested reading and some video shorts on this topic:
read more...»Unit 3 Micro: Examples of Price Discrimination in Action
I tweeted earlier on today asking economics teaching colleagues what examples they like to use when teaching the topic of price discrimination under conditions of monopoly / imperfect competition. Thank you to everyone who contributed!
