Economics CPD Courses in June 2014 - Book Your Places Now!
People do care about fairness, social norms and not just about a cold calculation of marginal cost and marginal benefit. In this excellent short interview on BBC World, Joe Gladstone, Behavioural Scientist at the University of Cambridge, discusses the new form of "Pay What You Want" pricing. This means consumers can decide themselves how much they want to pay for a good or service. The catalyst is that several French hotels are experimenting with a pay what you like approach for their guests.read more...»
An important part of the CrossRail project has been decided with the news that the £1.4bn contract to run the new Crossrail service through London from 2018 has been awarded to Hong Kong-based MTR Corporation.read more...»
Today’s announcement that the Competition and Markets Authority (CMA) are recommending that the High Street Banks’ provision of current accounts should be investigated for lack of competition may not surprise many. The case study may be valuable when looking at competition in oligopolistic markets and a report can be found from this link. The BBC take on the story can be found from this link.
I also thought it offered a chance to do some calculations! Given my current theme of bringing the new levels of assessment of numeracy and quantitative methods in the 2015 specifications of A level economics ever increasingly to the attention of our teaching community, where better to do some number work than when looking at market share in the banking industry!read more...»
The UK Financial Conduct Authority has announced direct interventions in the market for payday loans - the high cost short term loans market which has expanded rapidly in recent years led by businesses such as Wonga. The decision is the result of a detailed assessment of the industry which had flagged up a number of market failures.read more...»
Here is a short video featuring Mike Kitson from Cambridge University explaining the role universities play in knowledge exchange with businessesread more...»
According to some sources, Dropbox was the 37th online storage solution to be developed for the web - but despite early failures and late entry it has emerged as the cloud storage product of choice for over 300 million people. The firm is now estimated to be worth about £5.9bn.
This BBC article looks at the background to the story. Article can be found here: http://www.bbc.co.uk/news/business-27579790read more...»
You will probably be aware that assessment in the new AS and A level in Economics (starting in September 2015) will have a much greater emphasis on numeracy and quantitative methods. 20% of marks will be awarded to answers based upon number work and interpretation of graphs, charts and tables.
Whatever your view on the merits of this change, there is no doubt that it brings one of the biggest challenges to teachers of economics since the year 2000. Tutor2u have put together a team of experienced teachers with different awarding body knowledge to create resources and give advice through a series of CPD events during the 2014-2015 academic year.
If you look through any of the specimen papers from the three main awarding bodies you won’t be surprised to see a huge emphasis on calculation of percentages, use of index numbers and the need to understanding fractions and ratios. You can already imagine the increased use of elasticity calculations and having to work out costs and revenues.
Did you know however (depending on your exam board choice) that your students may have to calculate opportunity cost ratios for comparative advantage, dependency ratios, quantity theory of money, terms of trade index, national income multiplier and marginal propensity to consume? Imagine a marginal social cost/benefit diagram with figures included! Have you ever asked students to convert money in real terms? How do you think they will cope with medians and quartiles?
Our team are working on resources and advice to hand out to teachers for our ‘New to A level Economics – Quantitative Methods’ CPD days. Details about times, dates and locations to follow soon.
Here is a short FT background video on the challenges facing established food retailers in the UK. The supermarket is under pressure. They face competition from both hard discounters and upmarket retailers. The FT's Andrea Felsted visits Romford, on the outskirts of London, to examine how supermarkets are adapting to their new retail landscape. The Guardian's articles in changing competition in the food retail sector provide some excellent background pieces - click here to access: http://www.theguardian.com/business/supermarketsread more...»
When the Channel Tunnel opened in May 1994 bosses of many ferry companies were glum. But it was the backers of the channel tunnel who lost a fortune: according to The Economist (the source of the graph above), the train through the tunnel was meant to carry 28m passengers a year by 2010. Ferries were expected to lose foot passengers, cars and lorries. Like many predictions in business, this soon came to seem wrong; now it seems wrong only in the timing. Now it looks like competition in the market may be about to collapse, with ferries coming under increasing pressure.read more...»
Here is your starter for ten. What do the Uber app and David Ricardo have in common? Ricardo, I hear you ask. Scarcely known outside academic economics, he ranks equal with Adam Smith and Keynes as the greatest ever British economist. His classic Principles of Political Economy was published in 1816. He made millions of pounds on the stock market, at a time when a million was a vast amount of money.read more...»
If you’re starting out in transport economics, a good place to begin is by evaluating different modes of transport. One area you’re sure to look at is pollution. Here’s a statement I sometimes use to start the conversation:
Rolls-Royce says the four engines on the A380 are as clean and efficient as any jet engine, and produce “as much power as 3,500 family cars”. A simple calculation shows that the equivalent of more than six cars is needed to fly each passenger.
Take the calculation further: flying a fully laden A380 is, in terms of energy, like a nine-mile queue of traffic on the road below. And that is just one aircraft. In 20 years, Airbus reckons, 1,500 such planes will be in the air. By then, the total number of airliners is expected to have doubled, to 22,000. And whereas cars are used roughly for about an hour or so a day, long-haul jet airliners are on the move for at least 10 hours a day.
I’ve started putting together some more links below:read more...»
Technology always disrupts markets. It provides dynamic efficiency improvements, creates new markets, destroys old ones, and in some cases destroys monopolies and in others, creates new monopolies.read more...»
The supermarket giant Tesco is under increasing pressure! Tesco is Britain’s biggest retailer (it has 29% of the UK groceries market) and the biggest private-sector employer, and it runs about 7,000 stores worldwide. But it is facing significant commercial challenges from discount retailers such as Aldi and Lidl and seems to be squeezed in the middle as other shoppers look for the value proposition in stores such as Waitrose. Their recent trading figures made for sorry reading. For the three months to 24 May 2014, Tesco said like-for-like UK sales including VAT and excluding petrol fell 3.7%.
Is there a case for breaking up Tesco and getting the business to re-focus on what it does best? Two journalists from the Financial Times argue it out in the video below:read more...»
Trams have been experiencing a revival in a number of towns and cities in the past few decades. Edinburgh is the latest city to invest in trams, and hopes they will boost local economy. But do the benefits outweigh costs? Manchester, Sheffield, Blackpool, Nottingham, Newcastle and Croydon have all installed trams / light rail and others are considering investment.
The Edinburgh trams at running (at last) but the jury will remain out for a long time about their net impact on economic activity, traffic congestion and the broader health of Edinburgh and the local environs.read more...»
An important judgement from the newly established Competition and Markets Authority (CMA). They believe that competition is best served by having three major cross-channel service operators - namely EuroTunnel (rail) and two ferry operators.
The CMA has ruled against EuroTunnel being able to cross-subsidise the loss-making MyFerryLink on the Dover to Calais service because in doing so, it is likely to lead to the market exit of a rival provider and ultimately cause higher prices for consumers.read more...»
The fracking debate continues apace, with the announcement by the British Geological Survey that there are over 4 billion barrels of oil in the shale rocks of the South of England. The government has proposed new rules of access to land in order to speed up the exploitation of this oil, with payments of £20,000 being made to those living above the land where fracking takes place.read more...»
I have been greatly enjoying Gerd Gigerenzer's new book on Risk Savvy citizens - here he is discussing some of the key themes in his book at a TED talk in Zurich in the autumn of 2013read more...»
Until the 3rd of June we are making available in streamed format the Unit 3 Business economics revision companion - a superb resource for AQA and ExExcel in particularread more...»
What do prices mean and how are they set. A recent BBC World of Business podcast explored this and other issues.read more...»
Measuring costs and benefits is a crucial part of many microeconomic models. It’s central to understanding the pricing and output decisions firms make. You can’t understand how market failure may arise from the problems presented by externalities without measuring costs and benefits.
Yet making those measurements is often tricky, especially when some of the costs or benefits arise in the future.read more...»
If you’ve looked at labour markets, you’ll understand the basic theory: workers seek to supply more labour as wage rates rise, and the returns to work mount up. However, at some point, the marginal utility of extra leisure exceeds the marginal utility of extra income.
In other words, rich people start working less, because they can afford to. And for most of human history rich people had the most leisure, but that might be changing.read more...»
This Channel 4 news report looks at va growing protest movement among food industry workers campaigning against zero hours contracts and persistent low pay. Zero-hours contracts do not guarantee a minimum number of hours of employment. It has been estimated that 583,000 people, around 2% of the UK workforce, were employed on zero-hours contracts between October and December 2013. The actual figure is likely to be substantially higher than that.read more...»
A good article in The Economist recently, arguing that firms may be cramming markets in order to keep rivals out. Raising barriers to entry serves to reduce the levels of competition in markets, or makes them less ‘contestable’.read more...»
Metropolitan liberals love to be able to criticise Western society. Recently, their lives have been brightened by the extensive discussion on the rise in inequality since the 1970s, especially in the Anglo-Saxon economies. There is a danger that this essentially anti-capitalist narrative will come to dominate the media, paving the way for increased regulation and the sorts of failed statist interventions in the economy which were a consistent theme in British political economy for nearly four decades after the Second World War.read more...»
Looking for a quick activity to help test revision of some of the key economic terms needed for the up-coming exams? Here's a nice little test of knowledge that can either be used as an in-class activity or for individual students to use to test their own revision.
Called 'The Usual Suspects', students are given one minute to identify the definitions of as many key phrases from the micro and macro curriculum as they can. Each phrase is shown alongside 4 possible definitions (from the wider pool). Students must identify which is the correct answer. If an incorrect answer is given, the student has to click to remove a 'bar' to allow them to continue with the test.
60 key phrases are included with each of the two resources below, so the activity can be run several times. Who can get the highest score in one minute!
Click on this link for the macro version of the activity.
Click on this link for the micro version of the activity.
Here is a streamed presentation covering sone "Thoughts on Improving Your Economics Papers"read more...»
CEP Director, John Van Reenen, explains the reasons why inequality in the UK has been rising. For more films covering aspects of economic policy we recommend you take a look at the Facebook page - Click here! https://www.facebook.com/EconFilmsread more...»
The prospects of significant wage increases for typical UK workers are bleak, according to Professors David Blanchflower and Stephen Machin writing in the Spring 2014 issue of CentrePiece magazine.
It is quite clear that the economy is still well below full employment and there is a large amount of slack in the labour market, they say. There is little evidence of widespread skill shortages, which would push up wages; and public sector pay freezes with continuing redundancies continue to push down on workers’ bargaining power.read more...»
Income and wealth inequality in the UK are higher than most people think they are and higher than they think they should be. These are among the messages of a new online infographics film:read more...»
Here is a streamed version of a revision presentation on the Crossrail project, a good example to use when teaching transport economics and the main principles and issues governing a cost benefit analysis approach to infrastructure investment appraisal. It is designed for use with AS and A2 economics students.read more...»
Here is a short revision presentation covering aspects of the Private Finance Initiative - which figures on unit 3 for EdExcel micro economicsread more...»
Here are some revision resources on the topic of labour market failure.read more...»
Tanzanian cola producers are taking on Coca Cola and making headway in the battle for market share. Despite economic growth, there is a fragile middle class vulnerable to changes in world commodity prices and unstable employment and wages. This opens up an opportunity for indigenous food and drinks manufacturers who might be able to supply products at a lower price harnessing environmental aims such as recycling the majority of plastic bottles used.read more...»
Investigating and understanding price fixing and collusion are an important part of analysing behaviour in oligopolistic markets. Not all of these corrupt practices are headline grabbers: most are in such unglamorous areas as ball-bearings and cargo rates, which go on unnoticed for years, quietly bumping up the end cost to consumers of all manner of goods and services.
What steps can be taken to undermine the incentives for business to engage in these illegal activities?read more...»
Today is the final day of posting resources aimed at testing knowledge on diagrams (please see the links at the bottom of this page for easy access to Monday and Tuesday's blog posts). The resources are aimed at testing knowledge on some of the key diagrams that students need to know for their exams.
Today's diagrams are for A2 students in both micro and macro economics. We're sorry, but the diagrams are primarily aimed at students undertaking the AQA version of the Economics qualification.
For both micro and macro, you have a Powerpoint file that can be used in class to test knowledge using a scrolling slideshow. There is also a static diagram file for both topics that can be used in class or as a revision tool for students.
Click here to download a Powerpoint scrolling slideshow for A2 Micro
Click here to download a document testing diagrams for A2 Micro
Click here to download a Powerpoint scrolling slideshow for A2 Macro
Click here to download a document testing diagrams for A2 Macro
Click here to go to Monday's blog post for diagrams on AS micro economics
Click here to go to Tuesday's blog post for diagrams on AS macro economics
This blog entry brings together some of our revision resources on these crucial aspects of the theory of the firm. Scroll down below for revision notes, presentations and online quizzes for your to check your understanding.read more...»
Here is a selection of key diagrams for the Unit 3 business economics courseread more...»
Here's a quick a fun resource to help students learn the predicted economic growth of the world's major economies. Although a student wouldn't be expected to quote percentage growth statistics, it is always handy to have some figures ready to use as evidence or, at least, an understanding of the world's fastest growing states.
The game is called 'Higher or Lower' and is very simple. You are presented with the name of a country (e.g. China) and the predicted growth in GDP (compared to 2013) for 2014, as calculated by the IMF. You are also presented with the name of another country (e.g. United Kingdom). Your task is to say whether you think that the UK's predicted GDP growth is either higher or lower than that of China. Get the answer correct you earn a point and are presented with a third country and must predict whether their growth is higher or lower than that of the UK. However, get an answer wrong, you are out of the game! The maximum score of 37 (the number of countries in the database). Play the game a few times and really start to get a feel for the statistics for the different countries. The game is randomly set up so you can run it a few times a get a different sequence of countries each time.
Challenge your friends! Alternatively, you can go to the table on slide 3 of the resource and learn all of the figures off-by-heart!
Click on this link to upload the game. It is a Powerpoint-based game so you will need to have Powerpoint on your PC or Mac (versions beyond 2003). When prompted you should 'enable' macros. Sorry, this game does not work on mobile devices or OS like Android.
The introduction of a national minimum wage does not lead to job losses. That is the central finding of research by Peter Dolton and
Michael Stops, to be presented at the Royal Economic Society’s 2014 conference.
I'm sure that introducing the concept of normative statements is something that most Economics' teachers introduce early in the curriculum to show the dangers of expressing opinions without evidence. It's a tricky balancing act that we have to play - as students start to write longer, evaluative pieces we are keen for them to make reasoned arguments that don't sit on the fence but warn them of the dangers of starting to rant.
I thought that the two reports included on the document here might prove an interesting activity. The file contains two reports into a possible plan from the Welsh Assembly to introduce a ban on the smoking of E-cigarettes in public places (akin to the current ban on smoking of 'traditional' cigarettes) in Wales. The articles are interesting in their own right in explaining the reasons behind such a plan and as an example of Government intervention to solve a possible market failure (although one of the articles clearly identifies E Cigarettes as a solution to a market failure itself).
You could also ask students to read through the two articles and answer the following questions:
- Which of the two articles appears to offer more opinion-based evidence than the other?
- Highlight any words or phrases that indicate a value judgement rather than evidence-based reporting.
- Based upon your own reading and picking up on journalistic styles, have a guess which newspaper each article was published in.
The answer to this final question is in the 'read more...' section of this blog.read more...»
The Premier League season draws to an exciting close. It is by no means clear who will be champions, or who will gain the coveted top five European qualifying spots. There could even be a surprise. If Liverpool win, for the first time since 1995 a team from outside Manchester and North London will be crowned. Even then it was Blackburn. In the previous 21 seasons of the Premier League, all the winners have come from either the North West or London. So a Scouse victory would not alter this.read more...»
Today, the world's largest mining company, BHP-Billiton, has signalled that it is considering demerger and slimming the business, as a way of improving productivity and performance. However, is there more to this than meets the eye?read more...»
The big six energy firms in the UK - who account for more than ninety per cent of suppliers to UK household, commercial and industrial consumers - will be subject to another investigation by the competition authorities.
A report by regulator Ofgem has called for an investigation by the Competition and Markets Authority (CMA) which could take nearly two years to complete - effectively pushing the issue into the long grass well beyond the date of the next election.read more...»
Here is a selection of short extracts on the Royal Mail and the changing structure of the industry. I have been using them when teaching Unit 3 business economics - it strikes me as an excellent case study for revising lots of parts of the course. I have added some links below to recent media coverage of Royal Mail stories.read more...»
A number of students have been asking me about suggested reading for and introductions to the study of management as they look ahead to a UCAS application in the autumn. Here are some thoughts.read more...»
I thought it worthwhile sharing my resources which I have been collecting for students (and teachers alike). I have been promoting them on Twitter (@Economics_KSF) through scoop.it but for those of you not on there, the link for the scoop.it boards are here:read more...»
Concern about inequalities of income and wealth is now a fashionable topic. It featured strongly in the gathering of the world’s top brass at Davos earlier this year. Much of the popular coverage of the topic gives the impression that not only is inequality at record highs, but that it is confined to the wicked Anglo-Saxon economies.
A recent paper published by authors linked to the George Soros-funded Institute for New Economic Thinking shows very decisively that neither of these points is true.read more...»
The development of India, or its non-development relative to China, is an interesting topic, and one that Bob Hindle has already been blogged about in relation to its tax system.
However, there are other aspects of the Indian economy that will also impede its ability to grow, notably its lack (or should that be 'lakh'?) of coal.read more...»
Elinor Ostrom was the first and so far only women to win a Nobel Prize in Economics (strictly speaking the Swedish bank prize) in 2009 for her work on commons. According to the biologist Garrett Hardin, in an example familiar to A level economic students, unowned or collectively owned resources, say a fishing ground, tend to get trashed because of over use.
The 'tragedy of the common' happens because people may over fish or destroy environments because of the free rider effect. One person who fishes less is discouraged from doing so because others may simply fish more, until the fish stocks run out. Ostrom looked at how local communities could organise to stop such over exploitation without government regulation. She found that instead of 'tragedy' sometimes the commons worked quite well.read more...»
In recent times, pop up shops (retail outlets available on very short term leases) have grown in popularity. In part this has been because of the increase in vacant retail space during and in the aftermath of the last recession. But increasingly other organisation are thinking about using their locations as opportunities to attract small retailers and/or retail start-ups.
Transport for London is one such example. TfL owns more than 1,000 retail properties and this week TFL has signed a deal with Appear Here, an ‘online property agency’, to allow pop-up shops and restaurants in its tube stations. Consider the business potential for this kind of retail investment. Old Street is earmarked for this experiment - it is just a short walk from Silicon Roundabout in Shoreditch - the home of hundreds of emerging tech start up businesses.