http://www.tutor2u.net/blog/index.php/economics/ en tutor2u.net Copyright 2012 2012-02-12T07:41:03+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-video-resources-on-carbon-taxation http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-video-resources-on-carbon-taxation#When:08:49:45Z 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. AS and A2 Specifications, AQA Economics Unit 3, A2 Micro, Cost Benefit Analysis, Environmental Economics, Government Intervention, Indirect Taxes, Market Failure, Externalities, Information Failure, Market Equilibrium and Price, Price Mechanism in Action, Teaching of Economics, 2012-02-05T08:49:45+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/micro-music-video-featuring-the-little-mermaid http://www.tutor2u.net/blog/index.php/economics/comments/micro-music-video-featuring-the-little-mermaid#When:21:44:06Z We like this - in fact we like this a lot - virtually the whole of the micro course in three glorious minutes - enjoy Microeconomics Music Video- Econ World (featuring the Little Mermaid) Market Equilibrium and Price, Teaching of Economics, 2012-01-27T21:44:06+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/elasticity-of-demand-on-apples-app-store http://www.tutor2u.net/blog/index.php/economics/comments/elasticity-of-demand-on-apples-app-store#When:20:40:53Z As an Apple aficionado, I regularly visit the macrumors.com site to keep up to date with the latest news about my favourite computer company, so it was interesting to see this article today looking at the effect on revenue for app producers who put their apps ‘on sale’ AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Market Equilibrium and Price, Elasticity of Demand, 2012-01-26T20:40:53+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-focus-on-india-worlds-cheapest-computer http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-focus-on-india-worlds-cheapest-computer#When:20:29:20Z A few weeks ago came the announcement that an Indian business is finally set to launch the World’s cheapest tablet computer. This laptop device will sell for around 18 times less than the price of an iPad in London! How can a laptop be manufactured for less than $US 40? AS and A2 Specifications, AQA Economics Unit 4, EdExcel Economics Unit 4, OCR A2 Economics Unit F585, A2 Macro, Emerging Economies, Indian economy, Business Economics, Economies of Scale, Cycles and Shocks, Aggregate Supply, Economic Growth, Economics of Technology, Global Economy, International Trade, Market Equilibrium and Price, Nature of Supply, 2012-01-26T20:29:20+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-can-china-stay-competitive http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-can-china-stay-competitive#When:18:07:29Z This new five minute video report from the Financial Times is excellent on the competitive pressures facing many manufacturing businesses located in southern China. Wages are rising quickly and some manufacturing businesses have already moved either to lower-cost locations within the Chinese economy or to other countries such as Bangladesh and Indonesia. But there are alternative approaches and this video emphasises the decision that some manufacturers have made to stay put but instead to move up the value chain and produce higher-end, higher-priced products for advanced western markets. Businesses are reluctant to move factories and sacrifice the human capital that has been accumulated over in some cases over thirty years. AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Emerging Economies, China Economy, Business Economics, Management Issues, Economic Growth, Global Economy, Manufacturing Industry, Market Equilibrium and Price, Nature of Supply, 2012-01-25T18:07:29+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-can-the-uk-computer-games-industry-grow http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-can-the-uk-computer-games-industry-grow#When:22:17:37Z Britain is one of the world’s biggest exporters of creative products - from live TV shows and music to books, arts, architecture and films the economy has built up an enviable global reputation for excellence and a growing trade surplus to aid our balance of payments. Computer games falls squarely into this category but, according to TIGA - the trade association representing the UK’s games industry - unless there is renewed government support, the future of this sector is at risk. TIGA claims that the British games industry is suffering a significant ‘brain drain’ as talented programmers and artists leave the country to work abroad. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, A2 Micro, AS Micro, Business Economics, Economic Growth, Economics of Technology, GCSE Economics, Government Intervention, Subsidies, Macroeconomic Policies, Supply-side policies, Market Failure, Factor Immobility, Market Equilibrium and Price, Nature of Demand, Nature of Supply, Teaching of Economics, UK Economy, Regional Economics, Unemployment, 2012-01-24T22:17:37+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-3d-printing-and-a-manufacturing-revolution http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-3d-printing-and-a-manufacturing-revolution#When:16:56:38Z Additive manufacturing or 3D printing is an emerging technology that takes product design data which provides a geometric representation of a product such as a pen and that data is then sent over to a machine that allows products to be manufactured ‘on the spot’ typically using additive materials in liquid or powder format. This TED talk from Lisa Harouni (co-founder of Digital Forming) looks at examples of intricately designed products made using this new and increasingly affordable manufacturing technology. 3D machines can build structures, build replacement parts and parts within parts - the detailed resolution possible is incredible. AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, AS Micro, Business Economics, Economies of Scale, Management Issues, Cycles and Shocks, Aggregate Supply, Economic Growth, Economics of Technology, Environmental Economics, Manufacturing Industry, Market Equilibrium and Price, Nature of Supply, Teaching of Economics, 2012-01-23T16:56:38+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-the-economics-of-solar-subsidies http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-the-economics-of-solar-subsidies#When:22:15:53Z 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. AS and A2 Specifications, AQA Economics Unit 1, AQA Economics Unit 3, EdExcel Economics Unit 1, A2 Micro, AS Micro, Cost Benefit Analysis, Environmental Economics, European Economy, Government Intervention, Subsidies, Market Failure, Merit & De-Merit Goods, Market Equilibrium and Price, Nature of Demand, Nature of Supply, Price Mechanism in Action, Teaching of Economics, UK Economy, 2012-01-18T22:15:53+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/petrol-tax-and-the-downward-sloping-demand-curve http://www.tutor2u.net/blog/index.php/economics/comments/petrol-tax-and-the-downward-sloping-demand-curve#When:22:03:05Z 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. Government Intervention, Indirect Taxes, Macroeconomic Policies, Fiscal Policy, Market Failure, Externalities, Market Equilibrium and Price, Elasticity of Demand, Price Mechanism in Action, 2012-01-17T22:03:05+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit1-micro-processed-meat-and-cancer-risk-information-failure http://www.tutor2u.net/blog/index.php/economics/comments/unit1-micro-processed-meat-and-cancer-risk-information-failure#When:21:55:28Z I do my level best to avoid the processed meat aisles in the supermarkets - or at least the lower end of what is on offer (I remember once the 5pence sausage that was a guaranteed 2 per cent pork!). But perhaps excessive consumption of processed meats - much of which finds a way into the traditional Full-English might be doing people much more harm than good? Follow this BBC news report for more details. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Cost Benefit Analysis, GCSE Economics, Health Economics, Market Failure, Information Failure, Merit & De-Merit Goods, Market Equilibrium and Price, Nature of Demand, 2012-01-17T21:55:28+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-nano-technology-and-energy-efficiency http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-nano-technology-and-energy-efficiency#When:20:51:09Z Today’s research in the labs can be the harbinger of terrific innovations that change the landscape of consumer product markets in the years ahead. The iPod Nano is a brand but the research behind nano-technology itself might bring about eye-watering improvements in the energy efficiency of devices that are part and parcel of our daily lives. This brief news report from Al Jazeerah looks at innovation in nano technologies and what might be around the corner. Researchers at IBM have created the world’s smallest magnetic digital-storage device, using just 12 atoms to hold a single data bit of information. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Business Economics, Economic Growth, Economics of Technology, Market Equilibrium and Price, Nature of Supply, Teaching of Economics, 2012-01-17T20:51:09+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit1-micro-can-a-minimum-wage-create-jobs http://www.tutor2u.net/blog/index.php/economics/comments/unit1-micro-can-a-minimum-wage-create-jobs#When:00:02:34Z 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 AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Government Intervention, Minimum Prices, Labour Market, Market Equilibrium and Price, Price Mechanism in Action, Teaching of Economics, Unemployment, 2012-01-17T00:02:34+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-worlds-largest-solar-plant-opens http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-worlds-largest-solar-plant-opens#When:03:51:50Z 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. AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, Cost Benefit Analysis, Economic Growth, Economics of Technology, Environmental Economics, Government Intervention, Subsidies, Market Failure, Externalities, Market Equilibrium and Price, Price Mechanism in Action, 2012-01-16T03:51:50+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/the-futures-not-so-bright-for-oranges http://www.tutor2u.net/blog/index.php/economics/comments/the-futures-not-so-bright-for-oranges#When:17:03:32Z 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). AS Micro, Market Equilibrium and Price, Elasticity of Demand, Nature of Demand, Nature of Supply, Price Mechanism in Action, 2012-01-13T17:03:32+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-prezi-on-environmental-economics http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-prezi-on-environmental-economics#When:07:09:51Z 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. AS and A2 Specifications, AQA Economics Unit 1, AQA Economics Unit 3, EdExcel Economics Unit 1, EdExcel Economics Unit 3, A2 Micro, AS Micro, Emerging Economies, Development Economics, Environmental Economics, Global Economy, Government Intervention, Market Failure, Externalities, Public Goods, Market Equilibrium and Price, Price Mechanism in Action, Teaching of Economics, 2012-01-11T07:09:51+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-natural-disasters-and-their-economic-impact http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-natural-disasters-and-their-economic-impact#When:23:57:42Z From tsunamis to tornadoes, from droughts to floods, 2011 was a particularly nasty year for natural disasters in many parts of the world. These natural disasters inevitably have demand and supply side effects affecting not just those countries affected but ripple impact across regions and in the broader global economy. The Al Jazeera news video report below provides a clear overview of some of the major natural climatic shocks of 2011 and could easily be used as an introductory resource to discuss what are some of the micro and macroeconomic effects in both the short and medium term. These include: * Effects on the stock of physical capital / infrastructure * Impact on a country’s human capital * Effects on commodity prices, export revenues * Effects on agricultural output, profits, investment, productivity * Ripple effects on manufacturing industries and energy supply/cost * Impact on state tax revenues and the costs of re-building and providing emergency financial support * Effect on the movement of population following extreme climatic events * Natural disasters and changes in the distribution of income / risk of poverty This Economist graphic (published in Jan 2012) looks at the human cost of natural disasters and claims that “the world has succeeded in making natural disasters less deadly.” AS and A2 Specifications, AQA Economics Unit 2, AQA Economics Unit 4, EdExcel Economics Unit 2, EdExcel Economics Unit 4, OCR A2 Economics Unit F585, A2 Macro, AS Macro, Agriculture, Emerging Economies, Cycles and Shocks, Aggregate Supply, Economic Growth, Environmental Economics, Global Economy, Government Intervention, Market Equilibrium and Price, Price Volatility, Teaching of Economics, 2012-01-07T23:57:42+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-prezi-on-the-economics-of-negative-externalities http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-prezi-on-the-economics-of-negative-externalities#When:01:42:13Z 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. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Environmental Economics, Government Intervention, Government Failure, Indirect Taxes, Regulation, Market Failure, Externalities, Information Failure, Market Equilibrium and Price, Price Mechanism in Action, Teaching of Economics, 2012-01-03T01:42:13+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-biomass-subsidies-and-timber-prices http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-biomass-subsidies-and-timber-prices#When:20:55:09Z 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. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Commodities Markets, Cost Benefit Analysis, Environmental Economics, Government Intervention, Government Failure, Market Failure, Market Equilibrium and Price, Nature of Demand, Price Mechanism in Action, Inter-related Markets, Teaching of Economics, 2011-12-30T20:55:09+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-supply-shortages-drive-peanut-prices-higher http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-supply-shortages-drive-peanut-prices-higher#When:11:31:19Z Supply shortages in key growing regions have caused the price of peanuts to surge to record highs. Peanut prices in Europe are 60% higher than a year ago and the cost of peanuts in the USA has more than doubled in the last twelve months. The price spike is the result of lower production from India, Argentina and the United States. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Agriculture, Commodities Markets, Market Equilibrium and Price, Nature of Supply, Price Volatility, 2011-12-29T11:31:19+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/european-economics-resources-on-the-cap http://www.tutor2u.net/blog/index.php/economics/comments/european-economics-resources-on-the-cap#When:19:47:30Z 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 AS and A2 Specifications, AQA Economics Unit 1, AQA Economics Unit 3, EdExcel Economics Unit 1, EdExcel Economics Unit 4, OCR A2 Economics Unit F585, A2 Micro, AS Micro, Agriculture, Emerging Economies, Commodities Markets, European Economy, EU Farming and Fishing, Government Intervention, Buffer Stocks, Government Failure, OECD Economies, French Economy, Market Equilibrium and Price, Price Mechanism in Action, Teaching of Economics, UK Economy, Regional Economics, 2011-12-28T19:47:30+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-the-uk-housing-market-in-2011 http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-the-uk-housing-market-in-2011#When:14:44:39Z 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? AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Housing Economics, Market Equilibrium and Price, Price Mechanism in Action, Teaching of Economics, UK Economy, Regional Economics, London Economy, Recession Watch, 2011-12-26T14:44:39+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-sub-normal-profits-bp-leaves-the-solar-industry http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-sub-normal-profits-bp-leaves-the-solar-industry#When:09:32:16Z British Petroleum has decided to exit the solar energy energy industry claiming that the business has become unprofitable because of excess supply and falling prices. In 2011 a number of solar firms have gone out of business including California’s Solyndra and Germany’s Solon. BP will focus instead on investing in other renewable energy sectors including wind power and biofuels. Whilst the decision by BP to exit the industry appears significant, infact total global investment in solar power continues to rise. MidAmerican Energy Holdings owned by Warren Buffett have agreed to purchase a $2 billion solar project under development in California and a 49 percent stake in a $1.8 billion plant in Arizona. Google Inc. and KKR & Co have announced a joint venture to pump money in four California solar power plants with total capacity of 88 megawatts. The powerful search engine business uses a huge anount of energy every year and has committed itself to large scale investment in renewable energy supplies to help power their server farms.   AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, AS Micro, Cost Benefit Analysis, Environmental Economics, Government Intervention, Subsidies, Market Failure, Market Equilibrium and Price, Nature of Demand, Nature of Supply, Teaching of Economics, 2011-12-21T09:32:16+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-oligopoly-and-duopoly-in-bus-markets http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-oligopoly-and-duopoly-in-bus-markets#When:15:01:48Z The UK Competition Commission has published an important report into the market structure of local and regional bus services in the UK, twenty five years after the industry was deregulated and largely privatised. Coverage of the report can be found here (BBC news). Largely as a result of a long-term process of consolidation through merger and acquisition, the UK bus industry is found to be highly concentrated with five businesses dominating the sector even though more than 1,200 businesses provides services. The five largest operators (Arriva, FirstGroup, Go-Ahead, National Express and Stagecoach) carry 70 per cent of those passengers. The CC also found that head-to-head competition between operators is un-common and that-on average-the largest operator in an urban area runs 69 per cent of local bus services - effectively a monopoly position. AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, AS Micro, Business Economics, Monopoly, Oligopoly, Competition Policy, Market Equilibrium and Price, Nature of Supply, Transport Economics, UK Economy, Regional Economics, 2011-12-20T15:01:48+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/prezi-on-information-failures http://www.tutor2u.net/blog/index.php/economics/comments/prezi-on-information-failures#When:08:46:03Z Click below to open a new Prezi on aspects of information failures / gaps and market failure together with some of the interventions that might be used to address imfornation imperfections in many markets. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, Economics Q&A, Q&A - Market Failure, A2 Micro, AS Micro, Government Intervention, Regulation, Market Failure, Information Failure, Merit & De-Merit Goods, Market Equilibrium and Price, Teaching of Economics, 2011-12-20T08:46:03+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-patent-wars-a-touchy-subject-for-apple http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-patent-wars-a-touchy-subject-for-apple#When:17:24:57Z This excellent news piece from Ben Cohen at Channel 4 looks at the increasingly aggressive patent war being fought by the manufacturers of the world’s leading mobile phone and tablet devices - the most profitable products in the digital economy. “Where once the giants (Google and Apple) competed on features, they now compete on patents.” The news feature looks in particular at the intellectual property surrounding the slide-screen technology used by millions to unlock a device. Apple claims the IP to this but a video tracked back to twenty years ago suggests that developers were already thinking of something remarkably similar long before the iPhone came into existence. Can the makers of Android defend legal claims from Apple that their IP has been infringed? And who will end up paying for the enormous legal fees and possible extra licencing costs?   AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, Business Economics, Monopoly, Oligopoly, Economic Growth, Economics of Technology, European Economy, Single Market, Government Intervention, Regulation, Market Equilibrium and Price, Nature of Demand, Teaching of Economics, 2011-12-16T17:24:57+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-empty-housing-and-economic-efficiency http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-empty-housing-and-economic-efficiency#When:11:08:50Z Channel 4 recently focused on the causes and effects of the hundreds of thousands of empty homes in the United Kingdom. Why is it given persistent shortages of affordable housing that perhaps a million homes lie empty and unused whilst an estimated two million families are in severe housing needs. New housebuilding has collapsed and in Britain we are building 100,000 fewer new houses every year than we need just to keep up with the changing mix of households and demographic change. An interesting exercise is to show students some of the Channel 4 Campaign videos and then get them to put together policy ideas as to how to reduce the volume of empty homes and reduce the length of housing waiting lists. Links to some of the Channel 4 videos can be accessed below: AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, GCSE Economics, Housing Economics, Government Intervention, Regulation, Subsidies, Introductory Economics, Market Equilibrium and Price, Nature of Demand, Nature of Supply, Standard of Living, Teaching of Economics, UK Economy, Regional Economics, London Economy, 2011-12-15T11:08:50+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-inside-a-biscuit-factory http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-inside-a-biscuit-factory#When:10:25:58Z This five minute video is superb for illustrating economies of scale in the production - we take a trip through the United Biscuit factory to see how millions of products are made every day. The commentary is a little simplistic but as a visual aid it is brilliant. A great example to use of capital intensity in production and the nature of supply curves and the elasticity of supply. Here is the link to use AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Business Economics, Economies of Scale, Market Equilibrium and Price, Nature of Supply, Teaching of Economics, 2011-12-01T10:25:58+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-tacit-collusion-in-the-supermarket http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-tacit-collusion-in-the-supermarket#When:23:39:44Z What do students make of the current price match / big price drop schemes offered by many of the leading food retailers in the UK? On the surface the brand price match scheme shown in the picture below looks like a good deal for consumers in this time of financial hardship and distress. But what it this ‘parallel pricing’ serves merely as a form of tacit collusion with prices on a range of products actually higher than they might be without the facade of price comparisons and discount voucher compensation? AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, Business Economics, Oligopoly, Market Equilibrium and Price, Nature of Demand, Teaching of Economics, 2011-11-27T23:39:44+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-brand-loyalty-in-mobile-phones http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-brand-loyalty-in-mobile-phones#When:09:33:20Z Brand loyalty is hugely important in all kinds of industries and markets. The costs of acquiring a new customer vastly outweigh the expense of selling more to existing buyers and most of the mobile phone suppliers in this oligopolistic industry focus an enormous effort in building brand identity and brand loyalty to reduce the rate of customer churn (people who switch brands). AS and A2 Specifications, AQA Economics Unit 1, AQA Economics Unit 3, EdExcel Economics Unit 1, EdExcel Economics Unit 3, A2 Micro, AS Micro, Business Economics, Oligopoly, Economic Growth, Economics of Technology, Market Equilibrium and Price, Nature of Demand, Teaching of Economics, 2011-11-27T09:33:20+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-50-years-since-the-end-of-the-max-wage-in-football http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-50-years-since-the-end-of-the-max-wage-in-football#When:13:51:22Z 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 AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Government Intervention, Maximum Prices, Labour Market, Market Equilibrium and Price, Price Mechanism in Action, Teaching of Economics, 2011-11-23T13:51:22+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/government-plans-to-boost-the-housing-market http://www.tutor2u.net/blog/index.php/economics/comments/government-plans-to-boost-the-housing-market#When:11:55:04Z 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. AS and A2 Specifications, AS Micro, Housing Economics, Government Intervention, Government Failure, Regulation, Market Failure, Information Failure, Market Equilibrium and Price, Elasticity of Demand, Elasticity of Supply, Nature of Demand, Nature of Supply, Price Mechanism in Action, 2011-11-21T11:55:04+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/pasty-prices-something-to-chew-over http://www.tutor2u.net/blog/index.php/economics/comments/pasty-prices-something-to-chew-over#When:13:53:49Z I am trying to get my head around this example of pasty prices that I encountered at Waterloo Station on Tuesday night. The vendor is selling a large pasty for £3.90 and “The Big One” for £4.00 - a difference of just ten pence? Why not charge more? Or at least cut the price of the large pasty to something like £3.30 to encourage people to pay the £4.00 option? Am I missing something here? I asked the guy running the concession “what is the difference between the large pasty and the big one?” His cogent reply put me right “The big one is bigger!” I bought the large pasty because as far as I can see, there is no difference in size. AS and A2 Specifications, AQA Economics Unit 1, AQA Economics Unit 3, EdExcel Economics Unit 1, EdExcel Economics Unit 3, A2 Micro, AS Micro, Market Equilibrium and Price, Nature of Demand, Teaching of Economics, 2011-11-19T13:53:49+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/applications-of-elasticity http://www.tutor2u.net/blog/index.php/economics/comments/applications-of-elasticity#When:12:11:05Z Once students have understood the theory of the different elasticities, an important progression is being able to apply it to different markets. One exercise that I use with my iGCSE and AS groups is as follows: AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Market Equilibrium and Price, Elasticity of Demand, Elasticity of Supply, 2011-11-18T12:11:05+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-asymmetric-information-buying-a-used-car http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-asymmetric-information-buying-a-used-car#When:10:17:29Z An autumnal hat tip to Kevin Hinde at Durham Business School for spotting a new report from the Office of Fair Trading which finds that the market for second-hand, used cars remains the biggest source of complaints from customers. Nationally over 56,000 people have complained to the OFT-managed Consumer Direct in the year to date with 70 per cent of the complaints relating to faults with the cars and over 13 per cent about misleading claims or omissions by the seller. The used car market is a classic example of asymmetric information and the risks of consumer welfare being damaged by fraudulent selling and sub-standard service. The OFT have released a short film on customer rights that might be a good teaching resource to use when covering this topic. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, A2 Micro, AS Micro, Government Intervention, Market Failure, Information Failure, Market Equilibrium and Price, Nature of Demand, Teaching of Economics, Transport Economics, 2011-11-14T10:17:29+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-has-the-time-come-for-a-tobin-tax http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-has-the-time-come-for-a-tobin-tax#When:15:22:26Z 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: AS and A2 Specifications, AQA Economics Unit 1, AQA Economics Unit 2, EdExcel Economics Unit 1, EdExcel Economics Unit 2, AS Macro, AS Micro, European Economy, The Euro, Financial Markets, Global Economy, Government Intervention, Indirect Taxes, OECD Economies, Market Equilibrium and Price, Price Mechanism in Action, Teaching of Economics, 2011-11-06T15:22:26+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-luxury-goods-in-action http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-luxury-goods-in-action#When:14:02:45Z Have you got £40,000 or £50,000 to spare on a Christmas present? A hat tip to Freddie Drapkin for spotting these examples of products perfectly suited to status races and ostentatious consumption! Glass pool table (£39,000) £45,000 -  luxury table football table World’s largest jigzaw puzzle (£200) And for the lazy tea drinkers among you - try this! AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Market Equilibrium and Price, Elasticity of Demand, Nature of Demand, Teaching of Economics, 2011-11-06T14:02:45+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-unilever-hit-by-rising-costs http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-unilever-hit-by-rising-costs#When:11:43:15Z Here is a good example of a global giant in consumer products whose profitability has been affected by external headwinds over which it has little control. The Anglo-Dutch business Unilever - the world’s second-biggest consumer-goods company – has announced that profitability might fall in 2011 even after it increased prices to offset soaring costs for the commodities used to make its products. AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, Business Economics, Management Issues, Market Equilibrium and Price, Nature of Supply, 2011-11-06T11:43:15+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-time-of-use-pricing-for-energy http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-time-of-use-pricing-for-energy#When:23:28:48Z When is electricity demand highest in the UK? The answer comes at the end of the blog! The UK government is committed to the rolling out of smart energy meters between now and the end of 2020. Millions of homes will have smart meters installed which track how much electricity you use and when you use it - the installation cost is approximately £350 per unit although this may come down with the utilisation of economies of scale. Smart meters will give consumers and the utility businesses minute-by-minute information about energy consumption and this could fast-forward the launch of time of use pricing tariffs for us all in the years ahead. It will mark a move away from flat-rate tariffs towards fully-fledged peak and off-peak pricing. At the moment around one in ten households are on Economy 7 tariffs which offers lower prices for electricity used during off-peaking times in the late evenings and early mornings. Economy 7 seems to have been around for as long as CEEFAX and if you understand that you are giving your age away! AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, Business Economics, Cost Benefit Analysis, Economic Growth, Economics of Technology, Environmental Economics, Market Equilibrium and Price, Nature of Demand, Teaching of Economics, 2011-11-02T23:28:48+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-costs-and-benefits-of-a-super-sewer-for-london http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-costs-and-benefits-of-a-super-sewer-for-london#When:22:38:37Z Thames Water has plans for a super sewer running 20 miles from Hammersmith to Beckton but the plan has come up against intense opposition from many local resident groups. It is a good example to use of cost-benefit analysis in action with a project that will directly affect millions of people living and working in the capital. There is an almost unending list of stakeholders involved in the debate. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, A2 Micro, AS Micro, Business Economics, Economies of Scale, Cost Benefit Analysis, Cycles and Shocks, Aggregate Demand, Capital Investment, Environmental Economics, Market Failure, Externalities, Public Goods, Market Equilibrium and Price, Nature of Supply, Teaching of Economics, 2011-11-01T22:38:37+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-economies-of-scale-and-the-kinect http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-economies-of-scale-and-the-kinect#When:05:34:16Z Here is an example of economies of scale in production. Microsoft’s motion-sensing camera the Kinect was one of the fastest-selling consumer electronics device in history when it was launched in November 2010. In a report on the FT’s technology blog, Dennis Durkin, Xbox chief financial officer, is quoted as saying that economies of scale have been the major factor driving down the unit price of Kinect from $30,000-$40,000 when it was under development two years ago to $150 now. AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, AS Micro, Business Economics, Economies of Scale, Economic Growth, Economics of Technology, Market Equilibrium and Price, Nature of Supply, Teaching of Economics, 2011-11-01T05:34:16+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-google-maps-to-charge-for-usage http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-google-maps-to-charge-for-usage#When:15:55:09Z Google has announced that heavy users of the Google maps application will now be charged - it will be interesting to see if this move from a zero price targeted at websites that make extensive use of the Google Maps coding will affect demand for the program. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Business Economics, Economic Growth, Economics of Technology, Market Equilibrium and Price, Nature of Demand, Teaching of Economics, 2011-10-31T15:55:09+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-examples-of-price-discrimination-in-action http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-examples-of-price-discrimination-in-action#When:13:41:47Z 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! AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, AS Micro, Business Economics, Monopolistic Competition, Monopoly, Oligopoly, Price Discrimination, Market Equilibrium and Price, Nature of Demand, Price Mechanism in Action, Teaching of Economics, 2011-10-31T13:41:47+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-price-discrimination-in-the-e-book-market http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-price-discrimination-in-the-e-book-market#When:09:51:07Z Seth Godin’s Domino Project is an attempt to re-fashion the way in which e-books are published, sold and priced. This blog is particularly interesting for teachers and students who consider different forms of price discrimination. It proposes (at least) three different price tiers: $1.99 ebooks - a clearing price for the majority of e-books $5 ebooks. This is the price for bestsellers, hot titles and academic titles required by courses $10 - $20 ebooks. This is the price you will pay to get the book first, to get it fast, to get it before everyone else Read paying for first What do you think? How do you see e-book pricing tactics evolving as the market grows? The UK Office of Fair Trading is currently investigating the market for e-books in the UK amid allegations of price fixing / collusion by several leading publishers. You can access the OFT investigation using this link. Further reading: Guardian (August 2011): Apple and major publishers face lawsuit over ebook ‘price fixing’ Telegraph: EU raids publishers in ebook price-fixing probe By way of background - new research has found that the average e-book price of front-list e-books across the world was €10.50 net of taxes. The average price of UK frontlist e-books was €10.80, €1.50 more than equivalent US titles, but less than those in Germany, Spain and France. AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, AS Micro, Behavioural Economics, Game Theory, Business Economics, Monopoly, Oligopoly, Market Equilibrium and Price, Nature of Demand, Teaching of Economics, 2011-10-31T09:51:07+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-is-the-sun-dipping-on-solar-subsidies http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-is-the-sun-dipping-on-solar-subsidies#When:18:35:34Z To promote the expansion of renewable energy sources, many governments have introduced subsidies for consumers who install solar panels. In April 2010, the Labour government introduced generous feed-in tariffs to encourage households to install solar photovoltaic systems. Anyone spending £13,000 up front to fit a system to their home was paid 41.3p per kilowatt hour (kWh) generated – enough to earn them a typical annual income of £900 a year in payments, on top of a £140-a-year saving in reduced electricity bills. The big six energy companies are required by law to pay householders who generate their own energy. It looks like the days of generous subsidies for solar panels are coming to an end and there is a rush on to install them before the feed-in-tariff system is changed. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, A2 Micro, AS Micro, Business Economics, Cost Benefit Analysis, Environmental Economics, GCSE Economics, Government Intervention, Subsidies, Market Failure, Externalities, Manufacturing Industry, Market Equilibrium and Price, Nature of Demand, Nature of Supply, Teaching of Economics, 2011-10-27T18:35:34+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/university-fees-and-elasticity http://www.tutor2u.net/blog/index.php/economics/comments/university-fees-and-elasticity#When:10:12:19Z When teaching price elasticity of demand, here is a good article on the BBC today on the effect of higher university fees on demand for higher education. Good for discussion of how PED will differ with respect to different types of consumer and for different types of universities, as well as the cross price elasticity of demand with foreign universities. AS and A2 Specifications, AQA Economics Unit 1, AQA Economics Unit 3, EdExcel Economics Unit 1, A2 Micro, AS Micro, Labour Market, Market Equilibrium and Price, Elasticity of Demand, Nature of Demand, Teaching of Economics, UK Economy, 2011-10-24T10:12:19+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-economists-attack-food-price-speculation http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-economists-attack-food-price-speculation#When:08:36:54Z Food prices are now rising by up to 10% a year in Britain and Europe and a new forecast from the United Nations predicts that prices can be expected to rise at least 40% in the next decade. Whilst conventional theories of changes in supply and demand conditions can be used to explain some of the increase in food prices, many economists are concerned that speculation by hedge funds and other investors has amplified the natural volatility of prices driving food prices away from fair values and contributing to a huge rise in global food poverty and hunger. These days, cocoa, fruit juices, sugar, staples, meat and coffee are all now global commodities, along with oil, gold and metals. Is this the moment to legislate to limit the scope for speculative activity in food markets? The video below provides an excellent introduction to speculation in food markets - it features Neil Kellard, Professor in Finance at the University of Essex AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, OCR A2 Economics Unit F585, AS Micro, Agriculture, Balance of Payments, Emerging Economies, Development Economics, Commodities Markets, Economic Growth, Financial Markets, Government Intervention, Buffer Stocks, Poverty and Inequality, Market Equilibrium and Price, Price Mechanism in Action, Price Volatility, Teaching of Economics, 2011-10-24T08:36:54+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-miro-ofcom-gives-stamp-of-approval-for-flexible-pricing-in-mail http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-miro-ofcom-gives-stamp-of-approval-for-flexible-pricing-in-mail#When:06:53:49Z Changes are afoot for the UK household mail industry - a sector that is often used by teachers as an example of a near monopoly in the UK. In 2010, 16bn letters were delivered to 28.2m addresses. Royal Mail was responsible for delivering over 99% of these. The total UK household and business mail market comprises around 16bn items and £6bn to £7bn per annum of revenue. Royal Mail has a market share by revenue of over 90%. Just a few years after deregulation of the sector, the industry regulator Ofcom has produced a consultation document that is likely to give the Royal Mail more freedom in setting the prices of stamps. At present, the Royal Mail loses more than £2 million a week operating its letters business. Increasing competition from new entrants for bulk mail sorting allied to a shift towards email and text have contributed to a 25% decline in postal volumes since 2006. Household spending in Britain on postal services has fallen to just 40p a week. The 2010 Hooper Report on the postal sector, mail volumes are expected to continue to decline globally by between 25% and 40% in the next five years AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, Business Economics, Government Intervention, Regulation, Market Equilibrium and Price, Nature of Supply, Teaching of Economics, 2011-10-21T06:53:49+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/tescos-behaving-badly http://www.tutor2u.net/blog/index.php/economics/comments/tescos-behaving-badly#When:21:23:59Z On paper, it sounds like a totally reasonable price strategy from the market leader in an oligopolistic market - after announcing their worst sales figures in nearly 20 years, Tesco’s came out with a price cut promotion “The Big Price Drop”.  The supermarket – which has pledged to spend £500 million on the high-profile promotion – has promised customers that it would reduce the price of 3,000 essential products across its stores. AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, Business Economics, Oligopoly, Price Discrimination, Market Equilibrium and Price, Nature of Demand, Teaching of Economics, 2011-10-17T21:23:59+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/from-harrods-to-poundland http://www.tutor2u.net/blog/index.php/economics/comments/from-harrods-to-poundland#When:21:20:05Z Here is a nice example to illustrate the varying effects of the recession on the economy… A growing influx of high-spending foreign tourists powered Harrods through the £1bn sales barrier for the first time… whilst Poundland has also has reported a 26 per cent boost in revenues to £642m. A good example to use in discussion of goods and services that have different income elasticities of demand. Read the article at the FT here. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Market Equilibrium and Price, Elasticity of Demand, Teaching of Economics, 2011-10-17T21:20:05+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-contestable-markets-lucozade-takes-on-coca-cola http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-contestable-markets-lucozade-takes-on-coca-cola#When:19:24:11Z 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? AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, Business Economics, Competitive Markets, Market Equilibrium and Price, Price Mechanism in Action, Teaching of Economics, 2011-10-10T19:24:11+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/hard-choice-in-kenya http://www.tutor2u.net/blog/index.php/economics/comments/hard-choice-in-kenya#When:09:24:46Z This short video report from Will Ross for the BBC from the island of Lamu, considers a number of economic concepts. AS and A2 Specifications, AQA Economics Unit 1, AS Macro, AS Micro, Balance of Payments, Emerging Economies, African Economy, Cost Benefit Analysis, Cycles and Shocks, Government Intervention, International Trade, Market Equilibrium and Price, Nature of Demand, 2011-10-10T09:24:46+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/economics-on-youtube http://www.tutor2u.net/blog/index.php/economics/comments/economics-on-youtube#When:19:49:09Z A useful clip for AS micro: barter economies. Or, alternatively, for A2 micro: perfect price discrimination. Watch it here AS and A2 Specifications, AQA Economics Unit 1, AQA Economics Unit 3, EdExcel Economics Unit 1, EdExcel Economics Unit 3, OCR A2 Economics Unit F585, A2 Micro, AS Micro, Business Economics, Price Discrimination, Introductory Economics, Market Equilibrium and Price, Price Mechanism in Action, Teaching of Economics, Economics at the Movies, Fun Friday, 2011-10-09T19:49:09+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-producing-coffee-kenya-in-pictures http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-producing-coffee-kenya-in-pictures#When:10:06:27Z If you are teaching the economics of commodity prices and coffee in particular - this resource - will appeal strongly to your visual learners! The Guardian Pictures web site has a quite stunning set of photos of Kenyan coffee producers - growers who are hoping that rising world prices will bring respite after years of difficulty including volatile crop yields, poverty prices and incomes and a long term decline in investment. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, Agriculture, Balance of Payments, Emerging Economies, African Economy, Global Economy, Credit Crunch, Market Equilibrium and Price, Price Mechanism in Action, Price Volatility, Teaching of Economics, 2011-10-04T10:06:27+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-teacher-update-on-new-regulations http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-teacher-update-on-new-regulations#When:07:25:52Z The end of September has brought a raft of new or changed regulations affecting different markets. Here is a summary of some of them for students and teachers wanting to keep up to date: AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Business Economics, Government Intervention, Minimum Prices, Regulation, Macroeconomic Policies, Monetary Policy, Market Failure, De-Merit Goods, Externalities, Merit & De-Merit Goods, Market Equilibrium and Price, Nature of Demand, Nature of Supply, Teaching of Economics, 2011-10-01T07:25:52+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-amazon-launches-the-kindle-fire http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-amazon-launches-the-kindle-fire#When:06:01:45Z In the increasingly competitive and contestable market for tablet devices, leading online retailer Amazon has launched the Kindle Fire.   AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, Business Economics, Economies of Scale, Oligopoly, Economic Growth, Economics of Technology, Market Equilibrium and Price, Nature of Demand, Nature of Supply, Teaching of Economics, 2011-10-01T06:01:45+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-the-supply-and-demand-rap http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-the-supply-and-demand-rap#When:16:15:00Z An Indian Summer hat tip to John owen for finding and flagging up this super student-produced rap exploring the idea of equilibrium price! A great one to show to the Year 12s as they delve into price theory! Click on the link below AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Market Equilibrium and Price, Price Mechanism in Action, Teaching of Economics, 2011-09-28T16:15:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-exercise-on-equilibrium-market-prices http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-exercise-on-equilibrium-market-prices#When:19:17:00Z I have produced a classroom exercise on changing conditions of supply and demand and how they might affect equilibrium prices. This is available to download as a pdf file using the link below. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Market Equilibrium and Price, Nature of Demand, Nature of Supply, Price Mechanism in Action, Teaching of Economics, 2011-09-27T19:17:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-exercise-on-market-supply http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-exercise-on-market-supply#When:17:52:00Z This is an exercise to test understanding of the conditions of supply in markets. You can download the resource by clicking below. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Market Equilibrium and Price, Nature of Supply, Teaching of Economics, 2011-09-26T17:52:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-exercise-on-market-demand http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-exercise-on-market-demand#When:19:33:00Z I have attached in this blog a quick exercise on the determinants of market demand. There are twenty examples and students are asked to identify whether there is a movement or a shift in the demand curve and in which direction. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Market Equilibrium and Price, Nature of Demand, Teaching of Economics, 2011-09-25T19:33:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/some-more-creative-economics-props http://www.tutor2u.net/blog/index.php/economics/comments/some-more-creative-economics-props#When:20:28:00Z Geoff’s post about being ‘dangerously creative’ got me thinking about exactly what props I’ve got lying around my classroom, so I thought I’d share them with the rest of you… Commodities Markets, Market Equilibrium and Price, Price Mechanism in Action, Teaching of Economics, 2011-09-07T20:28:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-the-price-of-football http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-the-price-of-football#When:11:18:00Z The BBC’s new Price of Football survey offers an excellent opportunity to use wide differences in the cost of attending football matches across the length and breadth of the UK. A summer hat tip to Ben White (newly installed Head of Economics and Business at St Peter’s School in York) for flagging up this resource on the BBC web site - it is ideal stimulus material for generating a discussion on different pricing tactics, price elasticity of demand and income inelasticity of demand in the soccer industry. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Business Economics, Price Discrimination, Market Equilibrium and Price, Nature of Demand, Price Mechanism in Action, Teaching of Economics, 2011-08-02T11:18:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-cotton-prices-and-the-retail-price-of-clothing http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-cotton-prices-and-the-retail-price-of-clothing#When:10:51:00Z How does the world price of raw cotton affect the cost of buying new clothing on the high street and in the supermarkets? The answer is that the price of natural fibres is a key raw material into manufacturing garments and home furnishings. If prices rise, this increases the costs of production causing an inward shift of supply for clothing and furnishings at a given market price. The world price of cotton has been rising steeply in recent times. As our chart below shows, raw cotton prices are well down from their peak in the spring of 2011, but the index is still more than twice the level of two years ago. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Business Economics, Manufacturing Industry, Market Equilibrium and Price, Nature of Demand, Nature of Supply, Price Mechanism in Action, Price Volatility, 2011-07-13T10:51:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-economics-of-volatile-corn-prices http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-economics-of-volatile-corn-prices#When:08:52:01Z Corn is a soft commodity along with the likes of coffee, tea and rubber. Referred to as “yellow gold”, corn is used in products ranging from cereals, snack foods, salad dressings, soft drink sweeteners, chewing gum and peanut butter. Little wonder that shifts in the world price of corn can have a noticeable effect on the prices that we may for many popular foods and drinks. The world’s appetite for corn is strong. In recent months there has been a surge in the global price of corn, indeed at the end of June 2011, corn prices were up 74 per cent on a year earlier. Super-high prices affect the price of feed for livestock farmers and eventually lead to more expensive foodstuffs for consumers, including millions of people in the world’s poorest countries exposed to persistent and life-shortening food poverty. Robert Zoellick, President of the World Bank has said that high and volatile food prices are “the single gravest threat” facing developing countries at the current time. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Agriculture, Emerging Economies, China Economy, Government Intervention, Buffer Stocks, Market Equilibrium and Price, Nature of Demand, Nature of Supply, Price Mechanism in Action, Price Volatility, 2011-07-12T08:52:01+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/zondle-game-10-question-quiz-about-opec http://www.tutor2u.net/blog/index.php/economics/comments/zondle-game-10-question-quiz-about-opec#When:21:16:00Z OPEC continues to be in the news in an age of high and volatile crude oil prices. Here is a ten question quiz on OPEC created using Zondle designed to test student knowledge of this important international group. zondle - games to support learning AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Commodities Markets, Government Intervention, Buffer Stocks, Oil and Gas, Market Equilibrium and Price, Price Volatility, 2011-07-11T21:16:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-oligopsony-dairy-losses-drive-farmers-from-the-fields http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-oligopsony-dairy-losses-drive-farmers-from-the-fields#When:21:43:00Z Hats off to the herd! Milk production in the UK is expanding yet many dairy farmers have or are likely to leave the industry over the next five years unless raw milk production becomes more economically viable. Can the stakeholders in the sector reach fresh agreement on sustainable contracts for the near 40 million litres of milk produced every day? AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, AS Micro, Agriculture, Business Economics, Economies of Scale, Oligopoly, European Economy, EU Farming and Fishing, Government Intervention, Market Equilibrium and Price, Nature of Demand, Nature of Supply, Price Mechanism in Action, Teaching of Economics, UK Economy, Regional Economics, 2011-07-10T21:43:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-firstbuy-affordability-and-effective-demand-in-property http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-firstbuy-affordability-and-effective-demand-in-property#When:20:51:00Z For hundreds of thousands of first-time buyers, getting a solid foothold on the housing ladder has been tough in recent years. Falling prices and lower mortgage interest rates ought to have improved affordability for would-be purchases of a new house or flat but the barrier of having to save up a deposit in order to qualify for a mortgage has become higher causing many to be frozen out of the market. The number of people renting private accommodation in England has increased by 55% in the past six years as first-time buyers struggle to make purchases. Economists use a term known as effective demand to describe demand that is backed up by a willingness and ability to buy. There are few better case studies in low effective demand than the difficulties facing first time buyers in the UK property market. A new government scheme is designed to offer relief. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Housing Economics, Government Intervention, Subsidies, Market Equilibrium and Price, Nature of Demand, 2011-07-10T20:51:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-high-price-of-petrol-drains-demand http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-high-price-of-petrol-drains-demand#When:20:24:00Z New figures from the Automobile Association (AA) show that motorists in Britain are buying less fuel in response to record highs for petrol and diesel prices. They bought one billion fewer litres of petrol and diesel in the first three months of 2011 compared with the pre-credit crunch January to March 2008 period. It seems that high prices have incentivised drivers to cut back on their driving to save money and the pressure to economise has been raised by higher levels of VAT and a fall in real wages. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, GCSE Economics, Market Equilibrium and Price, Nature of Demand, Transport Economics, 2011-07-09T20:24:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/the-future-of-food-retailing-tesco-in-south-korea http://www.tutor2u.net/blog/index.php/economics/comments/the-future-of-food-retailing-tesco-in-south-korea#When:19:09:00Z Here is a fascinating short video on the techniques and tactics adopted by Tesco as they sought to become South Korea’s number one offline and online food retail store. Business Economics, Oligopoly, Economic Growth, Economics of Technology, Market Equilibrium and Price, Nature of Supply, Teaching of Economics, 2011-06-27T19:09:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-fears-over-a-century-of-hunger http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-fears-over-a-century-of-hunger#When:08:19:00Z Nigel Cassidy reports in this video from BBC news on fears that the world faces “a century of hunger” if the international community cannot agree on new rules regarding food prices. Food security is a hugely important global economic, political and social issue and one of the best resources for keeping up to speed on this is the Guardian’s dedicated page of articles. Here is the link. Check the links at the bottom of the blog for past articles on this topic. AS and A2 Specifications, AQA Economics Unit 1, AQA Economics Unit 4, EdExcel Economics Unit 1, EdExcel Economics Unit 4, OCR A2 Economics Unit F585, A2 Macro, AS Micro, Agriculture, Emerging Economies, Development Economics, Commodities Markets, Cycles and Shocks, Economic Growth, European Economy, EU Farming and Fishing, Global Economy, Government Intervention, Buffer Stocks, International Trade, Poverty and Inequality, Market Equilibrium and Price, Price Mechanism in Action, Price Volatility, Standard of Living, Teaching of Economics, 2011-06-22T08:19:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-us-ramps-up-cigarette-warnings http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-us-ramps-up-cigarette-warnings#When:08:12:00Z This Washington Post article reports on a decision by the FDA in the United States to significantly ramp up the mandatory health warnings on cigarette packets. Starting next year, cigarette cartons, packs and advertising will feature graphic warnings, replacing the discreet admonitions that cigarette manufacturers have been required to offer since 1966. This follows a similar move by the Australian government a few months back. When will the UK government finally get the message? AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Government Intervention, Health Economics, Market Failure, Externalities, Information Failure, Market Equilibrium and Price, Nature of Demand, Teaching of Economics, 2011-06-22T08:12:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/chinese-inward-investment-in-the-london-property-market http://www.tutor2u.net/blog/index.php/economics/comments/chinese-inward-investment-in-the-london-property-market#When:08:40:01Z In mainland China, authorities have put restrictions on property speculators to dampen the market, while in Hong Kong prices have risen by 70% in less than two years. But the 25% depreciation of sterling over the last two years makes the London property market a real draw for property investors from China. Sky News reports that one in three of buyers of new properties in London come from China and Hong Kong, mainly in the £400,000 - £1mn bracket, either seeking accommodation for their children studying in London or simply an investment. If - or when - the sterling/dollar exchange rate recovers, their return will be enhanced by the increased return they could get when they take their money out of the UK market again. A2 Macro, AS Macro, Emerging Economies, China Economy, Exchange Rates, Housing Economics, Poverty and Inequality, Market Equilibrium and Price, Price Mechanism in Action, Teaching of Economics, UK Economy, Regional Economics, London Economy, 2011-06-12T08:40:01+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/a2-micro-economies-of-scale-in-solar-power http://www.tutor2u.net/blog/index.php/economics/comments/a2-micro-economies-of-scale-in-solar-power#When:10:22:30Z How about this for economies of scale in the renewable energy industry? A new photovoltaic park has opened in Les Mées in France, By the end of 2011, solar panels will cover 200 hectares and produce around 100MW, making it the biggest solar array in France. AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, Business Economics, Economies of Scale, Economic Growth, Economics of Technology, Environmental Economics, European Economy, Single Market, Market Failure, Merit & De-Merit Goods, Market Equilibrium and Price, Nature of Supply, Teaching of Economics, 2011-05-27T10:22:30+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/a2-economics-revision-market-structure-conduct-performance http://www.tutor2u.net/blog/index.php/economics/comments/a2-economics-revision-market-structure-conduct-performance#When:14:54:00Z 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 AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, Business Economics, Competitive Markets, Economies of Scale, Monopolistic Competition, Monopoly, Oligopoly, Price Discrimination, Competition Policy, Market Equilibrium and Price, 2011-05-19T14:54:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/high-and-low-marginal-cost-products http://www.tutor2u.net/blog/index.php/economics/comments/high-and-low-marginal-cost-products#When:10:13:00Z Marginal cost is the change in total cost from supplying an extra unit or supplying to an extra consumer. In some markets and industries there is a clear marginal cost to producing for the next user. In others, the marginal cost is negligible, bordering on zero. How might this impact on the nature of supply and pricing? AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, AS Micro, Business Economics, Economies of Scale, Market Equilibrium and Price, Nature of Supply, 2011-05-19T10:13:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/a2-micro-examples-of-price-discrimination http://www.tutor2u.net/blog/index.php/economics/comments/a2-micro-examples-of-price-discrimination#When:08:22:00Z Price discrimination occurs when a business charges a different price to different groups of consumers for the same good or service, for reasons not associated with costs. AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, Business Economics, Monopoly, Price Discrimination, Market Equilibrium and Price, Nature of Demand, 2011-05-19T08:22:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/electric-cars-government-failure http://www.tutor2u.net/blog/index.php/economics/comments/electric-cars-government-failure#When:12:37:01Z There was a great in-depth look at activity in the car market in the Sunday Times yesterday with regards to electric powered vehicles. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, OCR AS Economics Unit F581, AS Micro, Business Economics, Competitive Markets, Government Intervention, Government Failure, Regulation, Subsidies, Market Failure, Externalities, Merit & De-Merit Goods, Market Equilibrium and Price, Price Mechanism in Action, Transport Economics, 2011-05-16T12:37:01+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/some-light-relief-from-revision-this-weeks-economics-tv http://www.tutor2u.net/blog/index.php/economics/comments/some-light-relief-from-revision-this-weeks-economics-tv#When:19:17:00Z Here is a selection of this week’s TV (and a bit of radio) that seems to have some good economics content and might provide a welcome, yet useful, break from revision. Sunday 15th May: BBC4 8pm, ‘The Secret Life of the National Grid’ - could be worth a look in terms of economies of scale, network externalities, economic growth and the importance of infrastructure Sunday 15th May: Radio 4 8pm, ‘The Bankers and the Bottom Billion’ - possibly some useful bits in terms of development economics Monday 16th May: BBC1 8.30pm, ‘Panorama’ - this week’s investigative documentary looks at the illegal trade in waste electronic products following the introduction of regulations governing how we can dispose of such things - probably very good in terms of analysing a type of government failure Monday 16th May: BBC1 9pm, ‘The Street That Cut Everything’ - looks rather entertaining as well as providing a bit of an insight into topics such as government spending on public goods and goods that generate positive externalities Monday 16th May: BBC4 9pm, ‘The Golden Age of Canals’ - whilst at first glance this may not seem too appealing, I suspect there are some interesting nuggets in terms of networks and infrastructure spending, as well as a look at why canals fell into obsolence due to the invention of the combustion engine (some creative destruction here!) Tuesday 17th May: BBC3 9pm, ‘Secrets of the Superbrands: Technology’ - a good look at how monopolies put up strategic barriers to entry in terms of branding and smart use of technology to achieve consumer loyalty Thursday 19th May: ITV1 7.30pm, ‘The True Cost of a Car’ - a look at the impact on motorists of rising fuel prices and insurance premiums, which will bring in cross-elasticity of demand in a roundabout way Thursday 19th May: Radio 4, 8pm, ‘The Report’ - a closer look at the operation of supermarkets and why there is opposition to their expansion (useful for looking at the impact of rising market power) Friday 20th May: BBC2 7pm, ‘Wind Farm Wars’ - probably very useful for those sitting AS Unit 1 this summer in terms of negative and positive externalities of production, and the ins and outs of cost-benefit analysis Hopefully there’s some light relief in there for everyone! All of the BBC programmes will be available on iPlayer for several days after they’ve been broadcast. A2 Macro, A2 Micro, AS Macro, AS Micro, Emerging Economies, Development Economics, Business Economics, Economies of Scale, Monopoly, Oligopoly, Cost Benefit Analysis, Economic Growth, Economics of Technology, Government Intervention, Regulation, Market Failure, Externalities, Public Goods, Market Equilibrium and Price, Inter-related Markets, 2011-05-15T19:17:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/whats-really-behind-the-oil-price-rise http://www.tutor2u.net/blog/index.php/economics/comments/whats-really-behind-the-oil-price-rise#When:09:43:00Z The price of oil continues to rise ($114.61 per barrel) and there a number of reasons put forward why this is so, none perhaps more pertinent than the reason explained in this WSJ article. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Emerging Economies, Commodities Markets, Oil and Gas, Market Equilibrium and Price, Nature of Demand, Price Volatility, 2011-05-10T09:43:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-commodity-prices http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-commodity-prices#When:19:46:00Z The economics of volatile commodity prices are a staple feature of many AS micro papers - it gives you a chance to apply your understanding of supply and demand factors and the importance of elasticities of demand and supply in explaining price movements. And also understand some of the consequences of volatile price and output movements for different stakeholders - including consumers, producers and the government. This BBC news article takes a look at the likely direction of world commodity prices and embraces a number of different markets that have appeared on exam papers in the past - so a useful exercise to test your revision is to read through and see how much you get first time. I have put a revision presentation on price volatility in markets on my web site - available here (it does the job for a really good AS micro answer) AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Emerging Economies, Government Intervention, Buffer Stocks, Market Equilibrium and Price, Price Mechanism in Action, Price Volatility, 2011-05-05T19:46:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-extended-house-price-deflation http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-extended-house-price-deflation#When:18:59:00Z A pessimistic forecast for the UK economy produced by the National Institute for Economic and Social Research (NIESR) suggests that the UK housing market is set to remain in the doldrums for some time to come. The NIESR has predicted a 4.5 per cent average fall in house prices in real terms this year, with further falls averaging 1.5 per cent for the following five years. The background to this forecast of house price deflation is that mortgage finance remains hard to come by (there has been a steep fall in the average mortgage loan to house price deal on offer). And mortgage interest rates are set to rise from their current low levels.  Weak demand is thus the main driver of falling prices. The NIESR argues that “(housing) supply constraints were less important than is often argued since supply just about kept pace with household formation.” AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Cycles and Shocks, Aggregate Demand, Housing Economics, Macroeconomic Policies, Market Equilibrium and Price, Nature of Demand, Price Mechanism in Action, Teaching of Economics, UK Economy, 2011-05-05T18:59:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/a2-micro-innovation-in-markets http://www.tutor2u.net/blog/index.php/economics/comments/a2-micro-innovation-in-markets#When:11:48:00Z This is a revision presentation covering aspects of innovation in markets. A PDF version of the presentation designed as a handout can be downloaded here. AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, Business Economics, Oligopoly, Economic Growth, Economics of Technology, Market Equilibrium and Price, Nature of Supply, Teaching of Economics, 2011-05-04T11:48:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-rising-global-food-prices http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-rising-global-food-prices#When:13:17:00Z This Euro News video report (8 mins) looks at the background to the rise in global food prices and the economic impact. I have linked below to related blog posts on the issue of the economics of food price inflation (also known as agflation)     AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Emerging Economies, Commodities Markets, Global Economy, Government Intervention, Buffer Stocks, Market Equilibrium and Price, Price Mechanism in Action, Price Volatility, Teaching of Economics, UK Economy, 2011-05-02T13:17:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-importance-of-elasticity-of-supply http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-importance-of-elasticity-of-supply#When:15:34:00Z This revision note considers some areas of the AS micro course where price elasticity of supply can become important in your analysis. The document can be downloaded below: The_Importance_of_Elasticity_of_Supply.pdf AS and A2 Specifications, AQA Economics Unit 1, AQA Economics Unit 3, EdExcel Economics Unit 1, EdExcel Economics Unit 3, A2 Micro, AS Micro, Business Economics, Market Equilibrium and Price, Elasticity of Supply, Nature of Supply, 2011-04-23T15:34:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/a2-micro-changes-in-costs-and-profits http://www.tutor2u.net/blog/index.php/economics/comments/a2-micro-changes-in-costs-and-profits#When:15:21:00Z At A2 level you are expected to be able to use analysis diagrams to show the effects of changes in short and long run production costs on a firm’s prices, profits and output. This two page revision note available to downlaod in pdf format looks at changes in costs and how they might affect pricing in imperfectly competitive markets. Download using the link below Revision_on_Changes_in_Costs.pdf AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, Business Economics, Market Equilibrium and Price, Nature of Supply, 2011-04-23T15:21:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-revision-public-and-private-goods http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-revision-public-and-private-goods#When:12:31:00Z What should the state sector of the economy provide?  How much should be left to the private sector allocating scarce resources through the incentives of the price mechanism? Is the provision of public goods the most important reason for accepting the existence of government involvement in the economy? These questions revolve around the idea of public and private goods – please understand the key characteristics of public goods and why they might not be provided optimally by the private sector – giving government a role in financing them for our collective (social) benefit. A one page revision note on public and private goods designed for AS (Unit 1) micro economics can be downloaded here. Revision_Public_Private_Goods.doc AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Cost Benefit Analysis, Government Intervention, Market Failure, Public Goods, Market Equilibrium and Price, Nature of Supply, 2011-04-21T12:31:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/key-as-micro-terms-costs-and-profits http://www.tutor2u.net/blog/index.php/economics/comments/key-as-micro-terms-costs-and-profits#When:08:21:00Z This blog provides revision definitions of concepts related to production, costs and profits and also links to recent revision blogs and revision presentations for students taking their Unit 1 Economics papers. Click to the bottom of the blog for the related revision posts. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Business Economics, Market Equilibrium and Price, Nature of Supply, 2011-04-16T08:21:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/smartphones-and-creative-destruction http://www.tutor2u.net/blog/index.php/economics/comments/smartphones-and-creative-destruction#When:07:23:00Z 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 AS and A2 Specifications, AQA Economics Unit 1, AQA Economics Unit 3, EdExcel Economics Unit 1, EdExcel Economics Unit 3, A2 Micro, AS Micro, Business Economics, Competitive Markets, Oligopoly, Economic Growth, Economics of Technology, Market Equilibrium and Price, Nature of Demand, Price Mechanism in Action, Teaching of Economics, 2011-04-16T07:23:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/key-as-micro-terms-prices http://www.tutor2u.net/blog/index.php/economics/comments/key-as-micro-terms-prices#When:19:14:01Z The price mechanism figures heavily in the AS micro syllabus. Below we have provided definitions of some key terms and also link to recent blog items and revision presentations AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Market Equilibrium and Price, Nature of Demand, Nature of Supply, Price Mechanism in Action, Price Volatility, Inter-related Markets, 2011-04-15T19:14:01+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/peter-day-at-the-faber-castell-factory http://www.tutor2u.net/blog/index.php/economics/comments/peter-day-at-the-faber-castell-factory#When:12:49:00Z The humble pencil - I have one in front of me now - is on the surface just about the simplest product one could make. But how is it manufactured? Would you be able to do it? I for one possess virtually none of the skills required to create a pencil but fortunately the wonderful Peter Day from BBC Radio 4’s In Business has been investigating the enduring success of two of the world’s most successful pencil businesses - including a visit to the Faber-Castell factory in Germany. There are some super images from the factory on the BBC Business News Facebook Page - great for visual learners who want to understand more about the production line process. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Business Economics, Economies of Scale, GCSE Economics, Market Equilibrium and Price, Nature of Supply, Teaching of Economics, 2011-04-13T12:49:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/nudge-more-like-a-shove-for-aussie-smokers http://www.tutor2u.net/blog/index.php/economics/comments/nudge-more-like-a-shove-for-aussie-smokers#When:18:59:00Z Here is an example of a government prepared to make tough decisions on the marketing of a de-merit good - a strong alternative to the default option of simply raising the duty (tax) on consumption in real terms. The Australian government has introduced what it thinks are the strongest laws controlling the sale and display of cigarettes in the world - it will be fascinating to see how this impacts on consumption among different age groups. Logos are banned, a large area of each packet must show cancerous tumours and the health effects of tobacco. And they are taking nudge to a new level by insisting that the colour of each packet is one that in surveys, smokers have found to be least attractive. The Sydney Morning Herald reports that smoking kills 15,000 Australians a year and costs the community about $31.5 billion annually. Over the last twenty years the smoking rate in Australia has halved but the government now wants to reduce it still further to 10%. The move is being contested by the multinational cigarette manufacturers who claim that the proposed restrictions infringe international trademark and intellectual property laws. Read: Australian anti-smoking laws to be ‘toughest in world’ See also The Independent: Australia’s cigarette war over shocking pack rules and David Prosser: When will big tobacco decide to give up? AS and A2 Specifications, AQA Economics Unit 1, AQA Economics Unit 3, EdExcel Economics Unit 1, EdExcel Economics Unit 3, A2 Micro, AS Micro, Government Intervention, Regulation, Market Failure, De-Merit Goods, Externalities, Merit & De-Merit Goods, Market Equilibrium and Price, Price Mechanism in Action, Teaching of Economics, 2011-04-12T18:59:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-solar-panels-and-economies-of-scale http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-solar-panels-and-economies-of-scale#When:08:11:22Z General Electric has announced plans to invest $600m in building the largest solar panel factory in the USA - using the latest “thin-film” technology acquired when it bought the US firm PrimeStar Solar, General Electric is aiming to utilise economies of scale to bring down the unit (average) cost of manufacturing solar panels. This BBC news article looks at the background to the announcement. The piece highlights one of the advantages of vertical integration. General Electric has agreed to buy Converteam, a French company that makes equipment to allow electricity from solar and wind power to be used by the national energy grid. This will mean that General Electric can offer customers a complete package including solar panels and products to connect them to the electricity grid. Chinese solar panels are cheaper (with lower manufacturing costs and a subsidy from the Chinese government) but they do not have this advantage. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Environmental Economics, Market Failure, Externalities, Market Equilibrium and Price, Nature of Supply, 2011-04-11T08:11:22+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-the-volatile-price-of-crude-oil http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-the-volatile-price-of-crude-oil#When:20:21:00Z Few commodity prices are watched as closely as the international price of crude oil. Brent crude is currently trading at over $122 a barrel - the highest price for over two years. Our Timetric chart is constantly updated and will always show the latest price. We have included below links to many of our recent blogs on the economics of oil prices and some of their micro and macro economic effects. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Commodities Markets, Oil and Gas, Market Equilibrium and Price, Nature of Demand, Nature of Supply, Price Mechanism in Action, Price Volatility, Teaching of Economics, Transport Economics, 2011-04-09T20:21:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-prices-for-new-and-second-hand-cars http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-prices-for-new-and-second-hand-cars#When:20:07:00Z The prices of new and second-hand cars as measured by the consumer price index have changed in absolute and real terms in recent years as the chart below shows AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Market Equilibrium and Price, Nature of Demand, Nature of Supply, Price Mechanism in Action, Price Volatility, Transport Economics, UK Economy, 2011-04-09T20:07:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-key-term-bubble http://www.tutor2u.net/blog/index.php/economics/comments/as-macro-key-term-bubble#When:15:46:00Z A bubble is said to happen when the prices of securities or other assets rise so sharply and at such a sustained rate that they exceed valuations justified by fundamentals, making a sudden collapse likely (at which point the bubble “bursts”). Typically this is seen in property markets where housing valuations can rise to unsustainable levels relative to income or long-run average prices. Speculative demand driven by positive price expectations has the effect of amplifying market demand and driving prices higher - especially when supply is restricted and unresponsive to short-term price movements. Bubbles are common in other asset markets such as for stocks and bonds. And increasingly we find that world commodity prices exhibit bubble tendencies with high levels of volatility in the prices of foodstuffs, oil and natural gas and metals. The bursting of a bubble - such as a collapse in property prices - can have important demand-side effects on wealth, confidence and aggregate demand AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, AS Macro, Commodities Markets, Cycles and Shocks, Market Equilibrium and Price, Price Volatility, UK Economy, 2011-04-04T15:46:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/information-failures-tesco-and-second-hand-cars http://www.tutor2u.net/blog/index.php/economics/comments/information-failures-tesco-and-second-hand-cars#When:13:03:00Z An updated article here on Tesco’s entry into the used car market Supermarket giant Tesco has announced plans to launch its own used motors website teaming up with one of the UK’s biggest ex-fleet car provider – Motability which is said to have access to 560,000 cars per year, with about 200,000 popular makes such as Ford and ­Vauxhall coming onto the market at the end of their lease life - sold through a network of 5,000 registered car dealerships. Industry analysts believe that Tesco will sell cars online and to overcome some of the asymmetric information issues in the market it will offer customers warranties, insurance and breakdown cover, as well as part exchange on vehicles. Finance for car purchases could be arranged through Tesco’s own personal finance business. Tommy Seagull writes here on the information failure issues connected to the second hand car market AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Government Intervention, Regulation, Market Failure, Information Failure, Market Equilibrium and Price, Nature of Demand, 2011-04-03T13:03:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-revision-banana-prices http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-revision-banana-prices#When:17:51:00Z This revision note covers supply and demand factors that help to determine the world and domestic retail price of bananas. Despite rising world prices, the UK retail price of bananas has actually fallen in recent years. Can students explain why? What effect does intense competition within the UK food retail sector have on the prices we pay? AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Agriculture, Emerging Economies, Commodities Markets, GCSE Economics, Market Equilibrium and Price, Elasticity of Demand, Elasticity of Supply, Nature of Demand, Nature of Supply, Price Mechanism in Action, Price Volatility, 2011-04-01T17:51:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/opec-oil-revenues-set-to-surge-above-1-trillion-in-2011 http://www.tutor2u.net/blog/index.php/economics/comments/opec-oil-revenues-set-to-surge-above-1-trillion-in-2011#When:17:49:01Z A combination of higher prices and higher oil production means that Opec’s oil revenues may exceed $1 trillion in 2011 for the first time. The International Energy Agency has published some new data on Opec production - the revenue forecast includes exports of natural gas liquids and is not adjusted for the effects of inflation. But if you are a Finance Minister of an oil exporting country the price of crude trading at $115 is welcome news especially given the stimulus spending that some countries have introduced as a response to social and political unrest. On some estimates, Saudi Arabia (the world’s largest oil producer and exporter) needs oil to be priced at $83 for its national budget to balance. AS and A2 Specifications, AQA Economics Unit 1, AQA Economics Unit 4, A2 Macro, AS Micro, Commodities Markets, Oil and Gas, Market Equilibrium and Price, Price Mechanism in Action, 2011-03-30T17:49:01+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/timetric-mortgage-lending-and-mortgage-rates http://www.tutor2u.net/blog/index.php/economics/comments/timetric-mortgage-lending-and-mortgage-rates#When:14:56:00Z Want to purchase a property? Chances are that you will need a mortgage to finance the deal and you will also need to find someone prepared to lend you the money. The fallout from the credit crunch continues to haunt the UK mortgage market with monthly loans to property-buyers stuck at very low levels. The average mortgage interest rate on a standard variable rate loan is low but most mortgage lenders have cut the % loan to housing valuation ratio meaning that buyers must find a hefty deposit to clinch the deal. Our Timetric chart (below) is always updated so you can keep up to speed with what is happening to mortgage lending and the cost of home loans in the UK property market. AS and A2 Specifications, AQA Economics Unit 1, AQA Economics Unit 2, AS Macro, AS Micro, Housing Economics, Market Equilibrium and Price, Price Mechanism in Action, UK Economy, 2011-03-14T14:56:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/timetric-price-convergence-within-the-eu http://www.tutor2u.net/blog/index.php/economics/comments/timetric-price-convergence-within-the-eu#When:09:10:00Z Has the growth and development of the European Union single market and the Euro accelerated a process of price convergence within the EU? Price convergence means that the gap in prices for the same good or service has come down and in theory, having one currency and an open market ought to bring down the extent of price variations. Our Timetric chart below tracks what has been happening to the price convergence indicator. A fall in the measure indicates a coming-together of average prices. AS and A2 Specifications, AQA Economics Unit 3, A2 Micro, Business Economics, Monopoly, Price Discrimination, European Economy, Single Market, Market Equilibrium and Price, Price Mechanism in Action, Standard of Living, UK Economy, 2011-03-13T09:10:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/timetric-internet-browser-market-shares http://www.tutor2u.net/blog/index.php/economics/comments/timetric-internet-browser-market-shares#When:00:02:00Z Timetric update the latest figures for market share in the web browser market - they are shown in the chart below. Internet Explorer continues the long slow slide as rival browsers become more popular and web users reveal their preferences! AS and A2 Specifications, AQA Economics Unit 1, AQA Economics Unit 3, A2 Micro, AS Micro, Business Economics, Oligopoly, Economic Growth, Economics of Technology, Market Equilibrium and Price, Nature of Demand, Teaching of Economics, Digital Learning, 2011-03-12T00:02:00+00:00