AS & A2 Economics Revision Workshops

AS & A2 Economics - Intensive Exam Coaching & Revision Workshops: Book Now!

Stratford | Fulham | Bristol | Birmingham | Gateshead | Leeds | Manchester


Economics Resources Popular resources on the {my channel} blogPopular resources on the {my channel} blog Economics revision quizzes Resource tags for the blog RSS Feed for the blog Twitter feed for this blog Teacher Email Resource Newsletter Category listing for this blog Economics Blog home page Economics Blog Home Page


Tracker Pixel for Entry

iPhone 5 and the Circular Flow of Income

Saturday, September 15, 2012
Print Tweet This!Save to Favorites

Many of us are introducing new AS level economists to the Circular Flow of Income at the moment, and it is a joy when a great news story breaks just at the right time to use in our teaching. There has been much news and press coverage of the new iPhone 5 this week, with plenty of in depth analysis of the extras that it offers and whether it will allow Tim Cook to emerge as a genuine successor to Steve Jobs at Apple. Michael Feroli, chief economist at JP Morgan, has gone further and looked at the potential impact of the launch on US GDP, and concluded that it could add up to 0.5% to annualized gross domestic product growth in the fourth quarter. Just one little product could have that massive an effect on expanding the economy - no wonder government is keen to encourage skills to enable competitiveness and to provide the infrastructure to facilitate business growth.

This report in the Chicago Tribune  breaks down the figures into a really simple illustration. If the pricing is similar to its predecessors, the iPhone 5 is likely to cost around $600. That will add $600 to domestic consumption for every phone sold in the US,within the economy's circular flow, and $600 to exports for every phone sold abroad as an injection. Feroli has calculated that the imported cost component (if similar to previous leading generation phones) would be around a $200 per phone; this is an addition to imports and therefore a leakage or withdrawal. Thus the net effect on the circular flow per phone is an expansion of $400. And as his report suggests that up to 8 million of the phones may be sold, that's an awfully big expansion!

Meanwhile, more advanced students of Behavioural Economics might enjoy Jim's report on the Business Studies blog  which shows what happens when customers are asked to comment on the new iPhone 5 - little realising that it is actually just the same old i-Phone 4 that they are handling......


blog comments powered by Disqus

AS & A2 Economics Revision Workshops

AS & A2 Economics - Intensive Exam Coaching & Revision Workshops: Book Now!

Stratford | Fulham | Bristol | Birmingham | Gateshead | Leeds | Manchester

Dates and Locations

AS & A2 Economics - Macroeconomics: National & International Economy (Unit 2),  Global/International Economy (Unit 4)

  • Tuesday 25 March 2014 - London (Stratford City)
  • Wednesday 26 March 2014 - London (Fulham Broadway)
  • Thursday 27 March 2014 - Bristol (Cribbs Causeway)
  • Friday 28 March 2014 - Birmingham (Star City)
  • Tuesday 1 April 2014 - Gateshead (Metro Centre)
  • Wednesday 2 April 2014 - Leeds (The Light)
  • Thursday 3 April 2014 - Manchester (Salford Quays)

Post-Easter (AS Economics Units 1&2 Combined;  Global/International Economy (Unit 4))

  • Monday 28 April 2014 - London (Stratford City)
  • Tuesday 29 April 2014 - London (Fulham Broadway)
  • Wednesday 30 April 2014 - Bristol (Cribbs Causeway)
  • Thursday 1 May 2014 - Birmingham (Star City)
  • Friday 2 May 2014 - Manchester (Salford Quays)

tutor2u online store

PowerPoint Lesson Activities Teacher Conferences & CPD Courses
Exam Coaching & Revision Workshops Pre-release Case Study Toolkits
A Level Economics Teaching Support Resources for Business Studies
Digital Magazines  


Enter your Email


AS Economics (Macroeconomics) Revision Guide

WOW! Economics 2014

50+ New Teaching & Learning Resources for A Level & IB Economics

AS, A2 & IB Economics Revision Notes

Latest resources

Resource categories Blog RSS feed Blog RSS Feed

© Copyright Tutor2u Limited 2013 All Rights Reserved