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/economics-explained-by-evan http://www.tutor2u.net/blog/index.php/economics/comments/economics-explained-by-evan#When:07:41:03Z Here is a great little article on the Today programme’s website by Evan Davis, looking at the relative merits of Plan A - Austerity - vs Plan B - government spending. He takes the arguments of Jonathan Portes, director of the National Institute of Economic and Social Research, who believes that what’s required at the moment is a short term, temporary fiscal stimulus to boost output and jobs and of Roger Bootle, managing director of Capital Economics, who thinks it would be dangerous for the government to divert from its Plan A of spending cuts. Economic Growth, Government Intervention, International Trade, Macroeconomic Policies, UK Economy, Recession Watch, 2012-02-12T07:41:03+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-public-goods-news-clips http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-public-goods-news-clips#When:19:04:45Z A selection of recent news clips linked to the concept of public goods Flood defence Lighthouse protection Speed cameras Private prisons Fireworks in Oban AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Government Intervention, Market Failure, Public Goods, 2012-02-11T19:04:45+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/stephanie-flanders-explains-quantitative-easing-in-60-seconds http://www.tutor2u.net/blog/index.php/economics/comments/stephanie-flanders-explains-quantitative-easing-in-60-seconds#When:22:22:21Z This has to be amongst the best 60 seconds of Economics you’ll ever see on television.  The superb Stephanie Flanders takes a leaf out of the RSA playbook to explain the basic theory behind quantitative easing.  Wonderful!! A2 Macro, AS Macro, Financial Markets, Global Economy, Credit Crunch, Government Intervention, Macroeconomic Policies, Monetary Policy, UK Economy, 2012-02-09T22:22:21+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/china-bans-its-airlines-from-paying-eu-carbon-tax http://www.tutor2u.net/blog/index.php/economics/comments/china-bans-its-airlines-from-paying-eu-carbon-tax#When:05:52:33Z On 1st January this year, the EU introduced an Emissions Trading Scheme (ETS) which levies a charge on flights in EU airspace based on carbon emissions. They estimate that this will add between 2 and 12 euros to flight tickets. Airlines are required to purchase emissions permits, like utilities and heavy industry in the EU, and airlines that do not comply face fines of 100 euros for each tonne of carbon dioxide emitted for which they have not surrendered allowances. In the case of persistent offenders, the EU has the right to ban airlines from its airports. A2 Micro, Emerging Economies, China Economy, Business Economics, Environmental Economics, European Economy, Government Intervention, Indirect Taxes, Market Failure, Externalities, Transport Economics, 2012-02-06T05:52:33+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/unit-1-micro-winning-the-war-on-deforestation http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-winning-the-war-on-deforestation#When:08:18:52Z Justin Rowlatt from the BBC has been investigating some of the remarkable progress being made in controlling deforestation in Brazil. The battle focuses on an area known as the “arc of destruction” and the video reports here show the impact of a government making a clear commitment to tackling the issue and backing it up with force and with incentives. AS and A2 Specifications, AQA Economics Unit 1, AQA Economics Unit 3, EdExcel Economics Unit 1, A2 Micro, AS Micro, Agriculture, Emerging Economies, Development Economics, Brazil Economy, Cost Benefit Analysis, Environmental Economics, Global Economy, Government Intervention, Regulation, Teaching of Economics, 2012-02-05T08:18:52+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/externalities-in-action-ted-talk http://www.tutor2u.net/blog/index.php/economics/comments/externalities-in-action-ted-talk#When:21:52:43Z I’ve just found this fascinating video from the amazing TED website which is an excellent example to show how ‘the market’ can can be used to solve an external cost AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Environmental Economics, Government Intervention, Government Failure, Market Failure, Externalities, 2012-01-23T21:52:43+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/video-resources-on-rising-inequality http://www.tutor2u.net/blog/index.php/economics/comments/video-resources-on-rising-inequality#When:10:24:14Z In this blog entry we will be bringing together some short video resources that might be useful when teaching and studying the economics of inequality. Please do add some more resources using the comment box at the bottom and we can add them to the listing. AS and A2 Specifications, AQA Economics Unit 1, AQA Economics Unit 3, EdExcel Economics Unit 1, EdExcel Economics Unit 2, A2 Micro, AS Micro, Government Intervention, Market Failure, Poverty and Inequality, Standard of Living, Teaching of Economics, UK Economy, Regional Economics, 2012-01-23T10:24:14+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/externalities-cartoon http://www.tutor2u.net/blog/index.php/economics/comments/externalities-cartoon#When:15:43:39Z KAL, The Economist’s cartoonist, has produced an excellent cartoon in the latest issue perfect for a discussion of a very topical externalities issue in North America. And one that has also been ‘causing tremors’ in the news over here too! AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Environmental Economics, Government Intervention, Regulation, Market Failure, Externalities, Oil and Gas, 2012-01-22T15:43:39+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-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/newsnight-on-rebalancing-the-uk-economy http://www.tutor2u.net/blog/index.php/economics/comments/newsnight-on-rebalancing-the-uk-economy#When:05:11:19Z Last night’s edition of Newsnight should be required viewing for all AS and A level economists - and it is a huge shame that it is only available on i-player for another 7 days. Introduced on the shock news that even Tesco is vulnerable to the downturn, it included reports from Andrew Verity looking at whether the British economy will ever wean itself off shopping and the City, and an excellent (and all-female!) discussion including Deborah Meaden and the FT’s Gillian Tett. Try challenging your students to watch and listen to this while noting down every aspect of the syllabus which is mentioned or referred to - that will keep them busy! There was also a debate between Employment Minister Chris Grayling and disability campaigner Sue Marsh about the government’s welfare reforms, defeated in the House of Lords the night before, and finally Tokyo correspondent Roland Buerk looking at Japanese economic stagnation of the late 1980s and 90s, to consider whether it was a “lost decade” and what could be learnt from it. A2 Macro, AS Macro, Business Economics, Cycles and Shocks, Aggregate Demand, Economic History, Economic Growth, Global Economy, Government Intervention, Macroeconomic Policies, Manufacturing Industry, OECD Economies, Japan Economy, Poverty and Inequality, Standard of Living, Teaching of Economics, UK Economy, Unemployment, 2012-01-13T05:11:19+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-externalities-from-metal-theft http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-externalities-from-metal-theft#When:20:42:02Z If a criminal steals metal from a building yard or a jewellers the impact is relatively isolated but when metal theft extends to lifitng metal from roofs, railway lines and many other public buildings, thousands are inconvenienced and left to pay the cost - negative externalities are clear. This news report from Al Jazeera looks at the growing economic and social problem of metal theft in London and a second video report from Channel 4 news looks at the external costs of copper theft from cables on the rail network that delays services and puts lives at risk. What are the best options for dealing with this crime epidemic? The Met Police has set up a specialist metal theft unit as part of their response. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Government Intervention, Market Failure, Externalities, Teaching of Economics, UK Economy, Regional Economics, 2012-01-02T20:42:02+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/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/what-is-the-socially-optimal-level-of-concerts-in-hyde-park http://www.tutor2u.net/blog/index.php/economics/comments/what-is-the-socially-optimal-level-of-concerts-in-hyde-park#When:12:52:11Z It seems those fortunate enough to live next to Hyde Park are increasingly bothered by the negative externalities arising from the concerts put on there. This BBC article is a good illustration of the difficulties involved at arriving at a socially-optimal level of production. AS and A2 Specifications, AQA Economics Unit 1, AQA Economics Unit 3, EdExcel Economics Unit 1, EdExcel Economics Unit 3, OCR AS Economics Unit F581, A2 Micro, AS Micro, Cost Benefit Analysis, Government Intervention, Government Failure, Regulation, Market Failure, Externalities, UK Economy, Regional Economics, London Economy, 2011-12-23T12:52:11+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/regulatory-capture-at-hmrc http://www.tutor2u.net/blog/index.php/economics/comments/regulatory-capture-at-hmrc#When:05:32:27Z Is the story of HMRCs failure to collect the right amount of tax from some big businesses an example of regulatory capture? In the current example, the Public Accounts Committee has said that HM Revenue and Customs enjoyed an “unduly cosy” relationship with major companies, and their procedures have allowed rules to be ‘bent’ so that up to £25bn tax has been underpaid. Regulatory capture (an example of government failure) is what happens when regulated industries are able to gain influence over their regulator, so that instead of serving the public interest, the regulator actually supports the interest of the industry concerned. In this case, there does not seem to be one specific industry concerned (although Goldman Sachs’s underpayment of something between £8mn and £20mn comes in for particular criticism); however the situation does seem to meet the requirements defined by the Economist as “Gamekeeper turns poacher or, at least, helps poacher”. More on the story here: Taxman slammed over ‘cosy’ business relations Goldman Sachs tax deal faces UK legal challenge A2 Micro, AS Micro, Business Economics, Government Intervention, Government Failure, 2011-12-23T05:32:27+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/economics-of-deforestation http://www.tutor2u.net/blog/index.php/economics/comments/economics-of-deforestation#When:16:53:58Z The Human Development Report 2011 reported that deforestation is a severe problem. In the last two decades, Latin American and Sub-Saharan Africa have experienced severe forest losses, especially when compared to the rest of the world. For economists the economic and social costs of rapid deforestation represent a telling example of the tragedy of the commons where the pursuit of individual self-interest can risk a permanent destruction of natural resources that undermines the sustainability of communities and societies for current and future generations. The United Nations calculates that deforestation and degradation is responsible for nearly 20 per cent of global greenhouse gas emissions. Will the REDD programme make a difference? REDD stands for Reducing Emissions from Deforestation and Forest Degradation in Developing Countries and is designed to provide financial incentives funded by advanced nations for developing countries to preserve their forests and instead invest in low-carbon paths to sustainable development. The UN estimates financial flows of up to $30bn could come from REDD and related initiatives - the scheme effectively allows rich countries to offset their carbon emissions from domestic industries and consumers by funding clean low-carbon development projects in developing countries. But it is highly controversial and opposed by many organisations such as Friends of the Earth and the World Rainforest Movement. In this blog we have put together some web resources on the issue of deforestation - focusing on causation, consequences and also on some of the policy approaches that might work to bring about behavioural change. 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 Macro, A2 Micro, AS Micro, Agriculture, Emerging Economies, African Economy, Development Economics, Brazil Economy, Commodities Markets, Cost Benefit Analysis, Economic Growth, Environmental Economics, Global Economy, Government Intervention, Market Failure, Externalities, Public Goods, Teaching of Economics, 2011-12-20T16:53:58+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-2-macro-will-a-youth-jobs-subsidy-work http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-will-a-youth-jobs-subsidy-work#When:11:03:38Z The Coalition Government recently heralded a new scheme designed to address the structural problem of high youth unemployment in the UK economy. Under their “youth contract” plan, employers will be given “wage incentives” worth £2,275 to take on some 160,000 18-to-24-year-olds. But will it have much impact on the problem? The independent Office for Budgetary Responsibility says that the net effect on overall unemployment will be close to zero, because the subsidy incentive will lead to a switch in employment away from older workers. AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, A2 Macro, AS Macro, Business Economics, Cycles and Shocks, Aggregate Supply, Government Intervention, Subsidies, Labour Market, Macroeconomic Policies, Supply-side policies, Teaching of Economics, UK Economy, Unemployment, 2011-11-30T11:03:38+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/unit-2-macro-should-the-eu-introduce-a-tobin-tax http://www.tutor2u.net/blog/index.php/economics/comments/unit-2-macro-should-the-eu-introduce-a-tobin-tax#When:00:42:14Z AS Economics student Freddie Bickford-Smith looks at some of the argument surrounding proposals to introduce a financial transactions tax in the EU. I will post another essay on this topic from a fellow student, offering an alternative perspective from that developed here! Following the financial crisis of the past few years, and the amassing of blame on the financial sector for it, it has come to the attention of many - including the European Commission - that there must be a way of rectifying the situation, and promoting greater economic stability. One popular suggestion is the ‘Tobin Tax’, an idea proposed by Professor James Tobin (the Nobel prize-winning American economist) for a tax on worldwide financial transactions AS and A2 Specifications, AQA Economics Unit 2, EdExcel Economics Unit 2, EdExcel Economics Unit 4, A2 Macro, AS Macro, European Economy, Financial Markets, Global Economy, Government Intervention, Indirect Taxes, Macroeconomic Policies, OECD Economies, Teaching of Economics, 2011-11-15T00:42:14+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/international-approaches-to-congestion-on-zoom.it http://www.tutor2u.net/blog/index.php/economics/comments/international-approaches-to-congestion-on-zoom.it#When:15:49:03Z This zoom-able map outlines the various approaches to traffic congestion which are in use around the world. It also shows the locations of the 15 most heavily congested cities.Zoom.it is one of my favourite finds and this zooming and panning map outlines international approaches to dealing with traffic congestion. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, OCR AS Economics Unit F581, Government Intervention, Market Failure, Externalities, Transport Economics, 2011-11-14T15:49:03+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-3-micro-uk-executive-pay-all-in-it-together http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-uk-executive-pay-all-in-it-together#When:09:55:00Z At a time when millions of people are taking nominal or real pay cuts, the news that chief executives of FTSE-100 companies have seen their earnings rise by 43% in the last year is particularly difficult to stomach. AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 1, A2 Micro, AS Micro, Business Economics, Government Intervention, Labour Market, Trade Unions, Poverty and Inequality, Teaching of Economics, UK Economy, 2011-10-29T09:55:00+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/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/unit-4-macro-world-food-day http://www.tutor2u.net/blog/index.php/economics/comments/unit-4-macro-world-food-day#When:19:33:04Z Here is one of the short information videos launched by the World Bank on the occasion of World Food Day - excellent as an introduction to the economics of high and volatile world food prices. Every night, 1 billion people go to bed hungry because food is too expensive. 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, A2 Micro, AS Macro, AS Micro, Agriculture, Emerging Economies, Development Economics, Commodities Markets, Global Economy, Government Intervention, Buffer Stocks, Market Failure, Poverty and Inequality, Standard of Living, Teaching of Economics, 2011-10-16T19:33:04+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/can-the-invisible-hand-solve-africas-poverty http://www.tutor2u.net/blog/index.php/economics/comments/can-the-invisible-hand-solve-africas-poverty#When:21:51:10Z At last night’s Senior Economics Society at Oundle we had a riveting talk by Hywel Rees-Jones, Managing Director of CDC, which covered so many areas of the issues of development economics. The talk was entitled “Can the invisible hand solve poverty in Africa?” Whilst conceding that some of the statements were broad generalisations across a variegated continent, Hywel discussed some of the key issues facing Africa. AS and A2 Specifications, AQA Economics Unit 4, EdExcel Economics Unit 4, A2 Macro, AS Macro, Emerging Economies, African Economy, Development Economics, China Economy, Commodities Markets, Economic Growth, Environmental Economics, European Economy, Global Economy, Government Intervention, International Trade, Manufacturing Industry, OECD Economies, Teaching of Economics, 2011-10-13T21:51:10+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/unit-3-micro-monospony-power-and-low-wages-in-care-homes http://www.tutor2u.net/blog/index.php/economics/comments/unit-3-micro-monospony-power-and-low-wages-in-care-homes#When:05:46:37Z An October 2011 edition of Panorama from the BBC investigates low pay and poor working conditions for thousands of people struggling to earn a decent living in the care homes sector. AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 1, A2 Micro, Government Intervention, Minimum Prices, Labour Market, Trade Unions, Poverty and Inequality, Teaching of Economics, 2011-10-04T05:46:37+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/nmw-classical-real-wage-unemployment http://www.tutor2u.net/blog/index.php/economics/comments/nmw-classical-real-wage-unemployment#When:16:42:17Z As the government increased the NMW this weekend by 15p to £6.08 an hour for adults….....the minimum wage may be pricing young people out of work because employers are finding it too expensive to give them their first job, Government pay advisers have said. Good application here for discussing real-wage classical unemployment. Read more here. AS and A2 Specifications, AQA Economics Unit 1, AQA Economics Unit 3, EdExcel Economics Unit 1, A2 Micro, AS Micro, Business Economics, Government Intervention, Minimum Prices, Labour Market, UK Economy, Unemployment, 2011-10-03T16:42:17+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/the-cure-for-economic-slowdown-drive-faster http://www.tutor2u.net/blog/index.php/economics/comments/the-cure-for-economic-slowdown-drive-faster#When:06:38:34Z This is the headline used by Reuters in their report of the government Transport Secretary’s proposal that the speed limit on motorways should be raised from 70 to 80mph. The justification for the proposal is largely that, when the limit was introduced, cars were less safe than they are now, and that technical improvements have made 80mph a safe speed at which to travel. Other arguments include the desire to conform with the higher motorway speed limits in Europe, which are generally higher than in the UK, and also the fact that many drivers do drive at between 70 and 80 on motorways anyway and tend not to be fined for it, so the law may as well be amended to keep up with actual behaviour. A2 Micro, AS Micro, Behavioural Economics, Environmental Economics, Government Intervention, Government Failure, Market Failure, Transport Economics, 2011-10-01T06:38:34+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-coast-guard-protection-and-moral-hazard http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-coast-guard-protection-and-moral-hazard#When:12:08:00Z A hat tip to Mark Seccombe for spotting this fine piece of economics writing from the New York Times economics blog. Casey Mulligan explores the question of whether the US coast guard should enforce that boats install safety beacons as a way of cutting the number of incidents they are required to attend. Does providing a safety-net regardless of whether participants have covered the cost of providing themselves with basic safety equipment lead to a problem of moral hazard? Has mandatory safety belts in cars led to a reduction in the quality of driving? Would compulsory air bags do the same? When is the state justified in applying and enforcing stringent safety requirements on people and businesses as they go about their daily lives? AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Cost Benefit Analysis, Government Intervention, Regulation, Market Failure, Public Goods, Teaching of Economics, 2011-09-29T12:08:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-drink-driving-and-government-intervention http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-drink-driving-and-government-intervention#When:18:14:01Z A culture of drink-driving has been a scourge in many countries for decades. The human and economic cost of lives lost and wrecked by motorists driving under the influence of alcohol is huge and most governments have introduced a range of interventions designed to change the incentives facing drivers. But which ones have most impact? AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Government Intervention, Regulation, Market Failure, Information Failure, Teaching of Economics, Transport Economics, 2011-09-26T18:14:01+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/information-failure-what-does-a-sell-by-date-really-mean http://www.tutor2u.net/blog/index.php/economics/comments/information-failure-what-does-a-sell-by-date-really-mean#When:06:28:01Z According to the Food Standards Agency and the government, the sell-by or display-until labels on food have little to do with whether the food remains edible, but are only to there to help retailers with their stock rotation. But DEFRA say that five million tonnes of edible food is discarded by UK households annually - the equivalent to £680 for a household with children - because of confusion over the date labelling. They would like to see the use-by dates on packaging used only for foods which actually become unsafe to eat, like meat, fish and prepared foods, and all stock rotation dates removed completely. They believe that this would help to avoid confusing shoppers with unnecessary information. However, the Food Director of the British Retail Consortium says that a better solution to the problem of food waste lies in better education for consumers. “Helping consumers understand that food past its best-before date can still be eaten or cooked could contribute to reducing food waste and saving people money,” he said. Retaining the display-until labelling on foods which don’t actually go off, such as crisps and biscuits, helps consumers to know how long they have been on the shelf, and pick out those that are more recently made and so may have lost some quality, even though they are quite edible. There is a little more on the report here. Government Intervention, Regulation, Market Failure, Information Failure, 2011-09-15T06:28:01+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/childcare-cost-means-that-working-doesnt-pay http://www.tutor2u.net/blog/index.php/economics/comments/childcare-cost-means-that-working-doesnt-pay#When:09:08:00Z I don’t think this dilemma is anything new, but Aviva’s Family Finance Report presents some up-to-date figures which show how difficult it can be for working parents to fund the cost of the childcare that makes it possible for them to take a job. Based on average pay rates, they estimate that a parent of two children working full time would only keep £120 a month of their pay after paying all the costs associated with work, including travel as well as childcare, while those who take a part-time job may actually be £98 a month worse off. The trade-off faced by working parents if they decide to swap the unpaid role of full-time childcare at home for paid work outside the home, which necessitates paying for some other form of childcare, has always been an issue, but the gap between the gain in pay and the loss in costs seems to be getting more difficult to manage. The report also looks at costs for child-related expenses such as school trips, clothes and sporting activities which have risen by 6.9% over the past year. Compare this with the fall in family incomes estimated at 2% between May and August this year - and the strain on family budgets is very clear. This report goes on to give some more data about the burden of unsecured debt and the measures government is taking to try to make working a more affordable option for families, which will be useful when looking at government intervention to deal with the poverty trap and the distribution of income. A2 Macro, Government Intervention, Labour Market, Macroeconomic Policies, Supply-side policies, Poverty and Inequality, Standard of Living, 2011-09-04T09:08:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/starter-activity-health-economics http://www.tutor2u.net/blog/index.php/economics/comments/starter-activity-health-economics#When:17:02:00Z This is a follow-up blog to Ben Cahill’s superb idea for a first lesson in economics focusing on making tough choices about resource use with a kidney dialysis machine. See: An activity for the first Economics lesson of the year! I too will be using health care economics as a starter activity with my AS micro groups this year. I was interested in finding out some of the assumed costs of different health care treatments offered by the NHS and my research took me to published cost/price lists used by NHS Scotland. Drawing on a detailed spreadsheet I selected the following: AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Government Intervention, Health Economics, Introductory Economics, Teaching of Economics, Digital Learning, 2011-09-01T17:02:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/keynes-vs-hayek-how-to-solve-an-economic-crisis http://www.tutor2u.net/blog/index.php/economics/comments/keynes-vs-hayek-how-to-solve-an-economic-crisis#When:07:42:00Z As major economies are buffeted by crisis again, the excellent Keynes vs Hayek debate held at the LSE last month is thrown into ever sharper context. You can hear the 30-minute radio programme made from the debate here on BBC i-player, or download it as a podcast. There is also an article here introducing the opposing arguments, which students could use in September to analyse the changes to the global economic situation - no doubt there are still many twists and turns to come in the next month for them to work with. Cycles and Shocks, European Economy, Financial Markets, Government Intervention, Macroeconomic Policies, Monetarism, Teaching of Economics, UK Economy, Recession Watch, 2011-08-08T07:42:00+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/where-theres-muck-theres-brass http://www.tutor2u.net/blog/index.php/economics/comments/where-theres-muck-theres-brass#When:06:08:00Z I am cross-posting this from the Business Studies blog, so apologies to those who read both - but I think it is a good story for both subjects. I have changed a few of the terms and themes to cover the different emphasis for an economics student. On the face of it, this is a good end-of-term case study which is bound to raise a smirk or a grimace from most students, but actually there is a wealth of good solid theory in it. In answer to the question “What to do with 12,000 tonnes of pig poo?” a farm in Gloucestershire has taken advantage of government grants to set up their own biogas generator, which enables them not only to provide their own power for the farm and farmhouse, but also to sell about 2.2 million kilowatts of electricity each year to the National Grid, and even better, to save money on fertiliser as the by-product has been broken down into a form that can be used on the fields. Even better, the process prevents huge amounts of methane from being released into the atmosphere - apparently each year it saves the equivalent of almost 9,000 return flights from London to New York. So lots of good positive externalities there. A2 Micro, AS Micro, Agriculture, Business Economics, Environmental Economics, Government Intervention, Macroeconomic Policies, Supply-side policies, Market Failure, De-Merit Goods, Externalities, Merit & De-Merit Goods, Teaching of Economics, 2011-07-06T06:08:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/protection-of-british-jobs http://www.tutor2u.net/blog/index.php/economics/comments/protection-of-british-jobs#When:06:01:00Z Is this protectionist, or is it common sense? Today’s headlines are all about Ian Duncan Smith’s speech in which he urges British employers to give young unemployed workers in the UK a ‘level playing-field’ and a better chance of getting the jobs which are being created. A2 Macro, Government Intervention, Labour Market, Macroeconomic Policies, Supply-side policies, UK Economy, Unemployment, 2011-07-01T06:01:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/competition-plan-for-universities http://www.tutor2u.net/blog/index.php/economics/comments/competition-plan-for-universities#When:15:36:01Z Competition, AS Microeconomics, A2 MicroeconomicsSo the Universities White Paper has been published.  Words like “Competition” on news feeds instantly make me sit up and take notice.  As my Year 12s embark on their odyssey into market structures and ever more close encounters with efficiency, I think this might just be the case study of the moment.  After all its subject matter is foremost in many of their minds. AS and A2 Specifications, AQA Economics Unit 1, AQA Economics Unit 3, A2 Micro, AS Micro, Behavioural Economics, Game Theory, Business Economics, Competitive Markets, Monopolistic Competition, Competition Policy, Government Intervention, Maximum Prices, Market Failure, Information Failure, 2011-06-28T15:36:01+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/global-economy-increased-risk-of-future-shocks http://www.tutor2u.net/blog/index.php/economics/comments/global-economy-increased-risk-of-future-shocks#When:07:05:00Z A new OECD report on the risks of external shocks to the global economy looks like being really useful for teachers preparing fresh materials for their courses. “The interconnectedness of the global economy makes it more vulnerable to major shocks…...these shocks include cyber attacks, pandemics, geomagnetic storms, social unrest and financial crises.” The report can be downloaded here. AS and A2 Specifications, AQA Economics Unit 4, EdExcel Economics Unit 4, OCR A2 Economics Unit F585, A2 Macro, AS Macro, Emerging Economies, Business Economics, Management Issues, Cycles and Shocks, Aggregate Demand, Aggregate Supply, Environmental Economics, European Economy, Global Economy, Credit Crunch, Government Intervention, Macroeconomic Policies, OECD Economies, Teaching of Economics, UK Economy, 2011-06-28T07:05:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/transport-economics-government-failure-in-roadbuilding http://www.tutor2u.net/blog/index.php/economics/comments/transport-economics-government-failure-in-roadbuilding#When:05:35:01Z A controversial motorway extension in Scotland is set to open. Glasgow’s new £657m M74 extension set to open (BBC News). The 6-lane elevated M74 extension is over-budget at a cost of £657m, which works out at £131m per mile or £75,000 a yard (£80,000 a metre). How can road extensions cost so much? Can the costs be justified by the suggested economic benefits? The BBC article provides a good mini-case study in transport cost-benefit analysis. Here are some other supporting links: AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, A2 Micro, Cost Benefit Analysis, Government Intervention, Government Failure, Transport Economics, 2011-06-28T05:35:01+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/unit-1-micro-are-carbon-taxes-ineffective http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-are-carbon-taxes-ineffective#When:20:44:00Z Some evidence here from a survey of the UK business community of ineffective incentives to invest long term to reduce C02 emissions. Green taxes fail to reduce carbon emissions AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Business Economics, Environmental Economics, Government Intervention, Government Failure, Market Failure, Teaching of Economics, 2011-06-20T20:44:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/oceans-at-grave-risk http://www.tutor2u.net/blog/index.php/economics/comments/oceans-at-grave-risk#When:19:28:00Z The tragedy of the commons and the grave consequences for the state of marine ecology are highlighted in this new report. Covered with passion in this blog. Climate change, pollution and over-fishing are two fundamental problems for the oceans. More details here from the International Programme on the State of the Ocean (IPSO) website. The report identifies a number of important policy approaches to tackle the problems - The scientists say that the ‘precautionary principle’ must be used in terms of oceanic impacts, in other society shouldn’t don’t proceed with activities unless they are proven to be largely safe for marine ecosystems.  And they argue for much stringer use of property rights by widening the size of international marines of the sea. TED Talk: Jeremy Jackson: How we wrecked the ocean   AS and A2 Specifications, AQA Economics Unit 1, AQA Economics Unit 3, EdExcel Economics Unit 1, EdExcel Economics Unit 4, A2 Micro, AS Micro, Emerging Economies, Cost Benefit Analysis, Environmental Economics, European Economy, EU Farming and Fishing, Global Economy, Government Intervention, Market Failure, Teaching of Economics, 2011-06-20T19:28:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/do-you-agree-that-the-government-should-provide-support-to-the-uk-car-indus http://www.tutor2u.net/blog/index.php/economics/comments/do-you-agree-that-the-government-should-provide-support-to-the-uk-car-indus#When:09:25:00Z This is a fairly classic A2 macroeconomics question, and one that the European Automobile Manufacturers Association has been considering at their meeting in London last week. Their conclusion? That non-European governments should scale back assistance for their own automotive industries, but at the same time governments in Europe should support the industry’s efforts to cut car emissions. A2 Macro, Emerging Economies, Business Economics, Competitive Markets, European Economy, Government Intervention, Subsidies, Macroeconomic Policies, Supply-side policies, Manufacturing Industry, 2011-06-12T09:25:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/is-cost-benefit-analysis-of-our-natural-environment-a-slippery-slope http://www.tutor2u.net/blog/index.php/economics/comments/is-cost-benefit-analysis-of-our-natural-environment-a-slippery-slope#When:06:01:00Z Helpful revision notes provided by a new government report yesterday, attempting to put a financial value on Britain’s ecology. The ‘National Ecosystem Assessment’ attempts to give a standard valuation on ‘ecosystem services’ like pollination by insects, water and air purification by soils and plants, the flood alleviation provided by woods and marshes upstream of towns and cities, and the value of living close to a green space; for example the value of living near a green space is calculated as £300 in terms of savings to the NHS. The first of 6 key findings of the NEA is: “The natural world, its biodiversity and its constituent ecosystems are critically important to our well-being and economic prosperity, but are consistently undervalued in conventional economic analyses and decision making.”   Cost Benefit Analysis, Government Intervention, Regulation, Market Failure, Externalities, Teaching of Economics, 2011-06-03T06:01:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/revision-profit http://www.tutor2u.net/blog/index.php/economics/comments/revision-profit#When:18:00:00Z Profit measures the return to risk when committing scarce resources to a market or industry. Entrepreneurs take risks for which they require an adequate rate of return. The higher the market risk and the longer they expect to have to wait to earn a positive return, the greater will be the minimum required return that an entrepreneur is likely to demand. Economists distinguish between different types of profit – explained below: AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, Business Economics, Competitive Markets, Monopoly, Oligopoly, Price Discrimination, Government Intervention, Regulation, Teaching of Economics, 2011-05-19T18:00:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/using-the-cost-benefit-principle-in-your-as-exam http://www.tutor2u.net/blog/index.php/economics/comments/using-the-cost-benefit-principle-in-your-as-exam#When:15:00:00Z The cost-benefit principle is one of those core ideas that can be brought into so many evaluative discussions both in micro and macroeconomics – you should be using it in your papers AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Macro, AS Micro, Cost Benefit Analysis, Government Intervention, Government Failure, Market Failure, Teaching of Economics, 2011-05-18T15:00:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/government-spending-and-cost-benefit-analysis-the-bottom-line http://www.tutor2u.net/blog/index.php/economics/comments/government-spending-and-cost-benefit-analysis-the-bottom-line#When:06:55:00Z Thought-provoking quotation from astronaut Alan Shepard, who became the first American in space in 1961: “It’s a very sobering feeling to be up in space and realise that one’s safety factor was determined by the lowest bidder on a government contract.” Cost Benefit Analysis, Government Intervention, Quirky Trivia, 2011-05-18T06:55:00+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/tackling-obesity-some-alternative-approaches http://www.tutor2u.net/blog/index.php/economics/comments/tackling-obesity-some-alternative-approaches#When:19:52:00Z So far, governments in the developed world seem to have failed in terms of developing and implementing effective policies that might reduce the negative externalities associated with the ‘obesity epidemic’. However, based on various different news reports this weekend, it seems that the private sector may actually have come up with some strategies that could be worth a try. My favourite is the ‘pay what you weigh’ approach in a new style of restaurant in Brazil - the heavier the food on your plate, the higher the price. There’s an interesting short clip on this here. Another approach, this time from Pizza Hut, is to offer unlimited free salad with all meals to all customers - apparently they expect to give away 50m cherry tomatoes and 1.3m million cucumbers over the next year! And, whilst I haven’t yet seen evidence of this, there is, apparently, an agreement by supermarkets to include portions of vegetables in ready meals in order to help consumers to eat their recommended 5 a day. Whether these approaches will actually make the nation healthier is unclear, but getting students to think of possible unintended consequences of this might be a useful pre-exam evaluative exercise. AS Micro, Government Intervention, Government Failure, Market Failure, De-Merit Goods, Externalities, Information Failure, 2011-05-15T19:52:00+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/regulation-legislation-and-competitiveness-the-bribery-act http://www.tutor2u.net/blog/index.php/economics/comments/regulation-legislation-and-competitiveness-the-bribery-act#When:20:53:01Z From the first of July, businesses will have another piece of legislation to deal with when the Bribery Act comes into law. This was proposed and passed in 2010 just before the election last May, and in the last year the government have been determining the precise way in which it should be put into practice. There are good reasons for it, to establish the country’s position as a global leader in the fight against business corruption – the UK currently holds a strong position in the World Bank’s rankings of economies for their ease of doing business. AS and A2 Specifications, AQA Economics Unit 3, AQA Economics Unit 4, A2 Micro, Business Economics, Management Issues, Government Intervention, Regulation, UK Economy, Regional Economics, London Economy, 2011-05-05T20:53:01+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-micro-government-failure-in-wind-farms http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-government-failure-in-wind-farms#When:10:24:00Z Market failure or government failure?  Six wind farms in Scotland have been paid £890,000 for nothing over a few hours on two windy days in April. They were entitled to compensation because they were offering renewable electricity which the UK National Grid did not have the capacity to take in and sell, because of a transmission fault. It seems like a huge waste of money to pay wind farms not to generate energy. Bit teething problems in matching wind farm output and capacity with the ability of the national grid to absorb and utilise their output. Read: Subsidies to wind farms to stop production AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Environmental Economics, GCSE Economics, Government Intervention, Government Failure, 2011-05-04T10:24:00+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-revision-on-government-failure http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-revision-on-government-failure#When:18:19:00Z Here is an updated revision presentation on government failure - focusing on the many causes of government failure arising from different forms of intervention in markets. Streamed: pdf handout: 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, Government Failure, Market Failure, Teaching of Economics, 2011-05-01T18:19:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-fast-food-fat-profits-obesity-in-the-usa http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-fast-food-fat-profits-obesity-in-the-usa#When:13:11:00Z Healthcare costs related to obesity-linked illnesses such as diabetes, heart disease and high cholesterol are soaring. Should the government intervene in the market in order to combat the growing costs of obesity?  This Fault Lines report from AlJazeeraEnglish provides a stark overview of the obesity crisis in the United States. Two out of every three Americans are overweight, one out of every three is obese. One in three are expected to have diabetes by 2050. Minorities have been even more profoundly affected. The free market may fail to take into account the negative externalities of consumption because the social cost exceeds the private cost. Consumers too may experience imperfect information about the long term costs to themselves of consuming products deemed to be de-merit goods. There is a huge debate at the moment about the root causes of obesity and the social costs that arise from increasing levels of obesity. A report published in June 2007 said that obesity could be a factor that bankrupted the National Health Service in the years to come.   AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Government Intervention, Indirect Taxes, Market Failure, De-Merit Goods, Externalities, Information Failure, Teaching of Economics, 2011-05-01T13:11:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/a2-micro-eu-aviation-state-aid-and-state-ownership http://www.tutor2u.net/blog/index.php/economics/comments/a2-micro-eu-aviation-state-aid-and-state-ownership#When:16:48:00Z I have put together a short revision exam-style question for AQA Unit 3 (Micro) focusing on some of the issues / problems facing the European Airline industry. Many of the established airlines are part-state owned and the question of nationalisation, government emergency funding / state aid was highly topical this time last year in the wake of the recession and the volcanic ash crisis. The document can be downloaded below and I have linked also to some other A2 micro revision resources EU_Airlines_State_Aid_Nationalisation.pdf AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, Business Economics, European Economy, Single Market, Government Intervention, Subsidies, Teaching of Economics, Transport Economics, 2011-04-28T16:48:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-mock-exam-question-on-sugar-prices http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-mock-exam-question-on-sugar-prices#When:16:40:00Z I have adapted a recent exam question in the global sugar market and the debate about sugar & salt consumption, obesity and market failure to create a new mock exam question for AQA Unit 1 students. It is available for download below. Unit_1_Revision_Sugar.pdf AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Government Intervention, Market Failure, Teaching of Economics, 2011-04-28T16:40:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/wiki-revision-a-to-z-on-monopoly http://www.tutor2u.net/blog/index.php/economics/comments/wiki-revision-a-to-z-on-monopoly#When:21:09:00Z Here is a revision idea. Take a broad topic - in this case the economics of monopoly - and get students to enter items for an A to Z on that topic. Here is an A-Z relating to monopoly, I am sure we have missed out lots of ideas, can you add some in? If so please leave a comment! AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, AS Micro, Business Economics, Monopoly, Government Intervention, Market Failure, Teaching of Economics, 2011-04-23T21:09:00+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/as-micro-revision-market-power http://www.tutor2u.net/blog/index.php/economics/comments/as-micro-revision-market-power#When:12:25:00Z A revision note on aspects of industries in which there is strong market power among one or a few businesses.  Most markets are competitive with a number of suppliers (producers) competing for the demand of consumers. Some are more competitive than others. At AS level it is important to understand some of the factors that lead to market (monopoly) power and to evaluate the costs and benefits of markets where monopoly power exists together with the effects of different types of government intervention. The revision note is available to download here: Revision_Market_Power.doc AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Business Economics, Competitive Markets, Monopoly, Government Intervention, Regulation, Market Failure, 2011-04-21T12:25:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/key-as-micro-terms-taxes-and-subsidies http://www.tutor2u.net/blog/index.php/economics/comments/key-as-micro-terms-taxes-and-subsidies#When:18:41:00Z Here are some key terms relating to taxes and subsidies - two key forms of government intervention. We have also linked to recent blogs on these concepts. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Government Intervention, Indirect Taxes, Subsidies, Market Failure, 2011-04-18T18:41:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/externalities-of-nitrogen-pollution-in-europe http://www.tutor2u.net/blog/index.php/economics/comments/externalities-of-nitrogen-pollution-in-europe#When:11:25:00Z Roger Harrabin reports on fresh research on the impact of air pollution on Europe’s natural habitats. A classic example of negative externality effects - already targeted by the EU natural habitat directive, but a regulation that appears to be ineffective. “Earlier this week, the European Nitrogen Assessment - the first of its kind - estimated nitrogen damage to health and the environment at between £55bn and £280bn a year in Europe, even though nitrogen pollution from vehicles and industry had dropped 30% over recent decades.” More here: Nitrogen pollution ‘costs EU up to £280bn a year’ The report can be accessed here   AS and A2 Specifications, AQA Economics Unit 1, AQA Economics Unit 3, EdExcel Economics Unit 1, A2 Micro, AS Micro, Agriculture, Cost Benefit Analysis, Environmental Economics, European Economy, Government Intervention, Regulation, Market Failure, Externalities, Teaching of Economics, 2011-04-16T11:25:00+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/uk-minimum-wage-rises-by-25-in-october-2011 http://www.tutor2u.net/blog/index.php/economics/comments/uk-minimum-wage-rises-by-25-in-october-2011#When:08:59:00Z An update on the economics of pay floors in the labour market. The adult rate for the UK minimum wage will rise by 15p to £6.08 an hour from October. The 2.5% increase is broadly in line with pay settlements but well below consumer price inflation, which is expected to breach 5 per cent this year. So in real terms, the value of the minimum wage will drop. The rate for 18 to 20-year-olds will rise 6p, or 1.2 per cent, to £4.98, and for 16 to 17-year-olds by 4p, or 1.1 per cent, to £3.68. But the apprentices’ rate will go up by 10p, or 4 per cent, to £2.60. AS and A2 Specifications, AQA Economics Unit 1, AQA Economics Unit 3, EdExcel Economics Unit 1, A2 Micro, AS Micro, Government Intervention, Minimum Prices, Labour Market, Poverty and Inequality, UK Economy, Unemployment, 2011-04-08T08:59:00+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/a2-micro-updates-on-competition-issues http://www.tutor2u.net/blog/index.php/economics/comments/a2-micro-updates-on-competition-issues#When:09:30:00Z Here are some links to recent news stories on competition and monopoly issues in the UK and the EU Single Market AS and A2 Specifications, AQA Economics Unit 3, EdExcel Economics Unit 3, A2 Micro, Business Economics, Competitive Markets, Monopoly, Oligopoly, Competition Policy, Government Intervention, 2011-04-02T09:30:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/accessible-uk-budget-resource http://www.tutor2u.net/blog/index.php/economics/comments/accessible-uk-budget-resource#When:16:21:00Z It’s not always easy to navigate your way through the budget, with its mass of technical detail and complexity.  Not all of it is terribly interesting either (nor the manner of presentation). Government Intervention, Macroeconomic Policies, Manufacturing Industry, Oil and Gas, UK Economy, Unemployment, 2011-03-25T16:21:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/progress-towards-low-carbon-economic-growth http://www.tutor2u.net/blog/index.php/economics/comments/progress-towards-low-carbon-economic-growth#When:19:56:00Z I am grateful to Tom Whitmey and Leo Barnes for heading over to the lecture and discussion headed up by Lord Nick Stern at the LSE last night. Their notes from the talk are below. AS and A2 Specifications, AQA Economics Unit 1, AQA Economics Unit 3, A2 Micro, AS Micro, Emerging Economies, Cost Benefit Analysis, Environmental Economics, European Economy, Government Intervention, Market Failure, Externalities, Teaching of Economics, 2011-03-18T19:56:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/a-big-society-joke http://www.tutor2u.net/blog/index.php/economics/comments/a-big-society-joke#When:00:07:00Z Why is Big Society Cluedo easier than normal Cluedo?... Government Intervention, Quirky Trivia, 2011-03-18T00:07:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/tuesday-talks-the-cycling-city http://www.tutor2u.net/blog/index.php/economics/comments/tuesday-talks-the-cycling-city#When:15:24:00Z A Radio 4 broadcast from yesterday, Bristol: Cycling City, provides the inspiration for today’s extension activity - there is a short synopsis here. This 30 minute audio documentary looks at the way in which £22m has been used over the past 3 years to increase the use of bicycles by residents of Bristol. Cyclists, motorists and local taxpayers seem to think that in general the scheme has not been successful, with only a small increase in the number of cyclists combined with poorly thought-through cycling infrastructure. After listening to the documentary, students could draw up their own cost-benefit analysis of the scheme, and discuss whether the £22m has been used in the most effective way (around two thirds of the funding went towards infrastructure and the remaining third towards education relating to cycling). More details on the specific projects that have been run as part of this scheme can be found here. Able students may want to consider how they would have tackled the scheme differently. Government Intervention, Subsidies, Teaching of Economics, Tuesday Talks, Transport Economics, UK Economy, Regional Economics, 2011-03-08T15:24:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/theory-thursdays-public-goods http://www.tutor2u.net/blog/index.php/economics/comments/theory-thursdays-public-goods#When:22:55:01Z This week’s Theory Thursday extension topic focuses on the provision of public goods, questioning whether public goods in the true sense of the term really exist, and whether governments really are the only possible providers. I’ve included a student worksheet and a detailed teacher guidance sheet for download. If you happen to have very keen and able students that cope well with the extension worksheets, you could always suggest that as further extension material they find out about Clarke taxes (the level of tax that corresponds to an individuals willingness to pay for their share in a particular public good). Public_Goods_student_sheet1.pdfPublic_goods_teacher_sheet1.pdf Government Intervention, Market Failure, Public Goods, Teaching of Economics, Theory Thursday, 2011-03-03T22:55:01+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/patent-box-or-innovation-box-as-innovation-stimulant http://www.tutor2u.net/blog/index.php/economics/comments/patent-box-or-innovation-box-as-innovation-stimulant#When:19:54:00Z The UK coalition government does not yet have a growth strategy worth the name but they have invested plenty of capital in the idea of a Patent Box. This involves a lower corporation tax on profits drawn from patented products) and is a supply-side policy to make UK an attractive location for innovative industries. One proposal is that royalties and other profits from patented products and technologies would be taxed at just 10 per cent. But many economists argue that this is at best an ineffective way of lifting the amount of research and development in the British economy. They look instead to the Netherlands where an Innovation Box has had a significant impact - it reflects the view that patents are only a small part of the innovation process - you dont necessarily have to patent an idea to make small scale innovations commercially viable. Channel 4 news tonight visited Sandwich in Kent where the Pfizer research and development facility is set to close. AS and A2 Specifications, AQA Economics Unit 2, AQA Economics Unit 4, EdExcel Economics Unit 2, EdExcel Economics Unit 4, A2 Macro, AS Macro, Business Economics, Cycles and Shocks, Aggregate Supply, Economic Growth, Economics of Technology, Government Intervention, Subsidies, Macroeconomic Policies, Supply-side policies, Manufacturing Industry, Teaching of Economics, UK Economy, 2011-03-02T19:54:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/gender-pricing-in-insurance http://www.tutor2u.net/blog/index.php/economics/comments/gender-pricing-in-insurance#When:12:57:00Z The European Court of Justice has ruled that gender “can’t be used as a factor” when working out the cost of insuring someone. “The use of actuarial factors related to sex is widespread in the provision of insurance and other related financial services. In order to ensure equal treatment between men and women, the use of sex as an actuarial factor should not result in differences in individuals’ premiums and benefits.” Lots of coverage about this today most focusing on the risks that insurance premiums for women drivers who are by-and-large safer drivers on our crowded roads will now go up. But my instinct is that insurance companies for far too long have been discriminating against younger male drivers, many of whom have a higher disposable income that women of the same age (and the insurance companies know this). Instead of getting worked up about this EU ruling more attention should be given to the much bigger problem of the millions of people in the UK who decide (for one reason or another) to drive uninsured vehicles - that is a danger and a risk that affects us all. Guardian: Discrimination ruling: Fast cars, sex and insurance Telegraph: UK insurers criticise European ban on gender-based pricing AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Business Economics, Price Discrimination, Government Intervention, Regulation, Market Failure, Information Failure, Teaching of Economics, 2011-03-02T12:57:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/eu-ruling-on-sex-equality-price-differentiation-price-discrimination-or-an- http://www.tutor2u.net/blog/index.php/economics/comments/eu-ruling-on-sex-equality-price-differentiation-price-discrimination-or-an-#When:22:27:00Z If it can be statistically proved that women have fewer car accidents than men, is it fair that they should pay the same for their vehicle insurance? And if a man and a woman have paid the same contributions to a private pension scheme during their working lives, but after they both retire at 65 the man is statistically likely to live for a shorter time that the woman, is it reasonable that the man receives the same monthly pension payment as the woman for the rest of his life? A2 Micro, Business Economics, Price Discrimination, Government Intervention, Government Failure, Regulation, Market Failure, 2011-03-01T22:27:00+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/information-failures-cowboy-builders http://www.tutor2u.net/blog/index.php/economics/comments/information-failures-cowboy-builders#When:12:30:01Z It is great material for day-time television - seek out the desperately poor but expensive work of cowboy builders who seem able to pick up job after job when there are perfectly good experienced and well qualified builders struggling to find work. But cowboy builders cost the economy many millions of pounds in lost tax revenue every year and they often leave vulnerable people in desperate situations. These days you are fortunate to find a good builder (a “peach”) and worry about falling into the hands of a bad one (a “lemon”). Something should be done about it. Jamie Wilson connects the cowboy trade and links it to information failures. That reminds me ... I need to get someone to build me a new wall ..... AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Government Intervention, Market Failure, Information Failure, 2011-02-27T12:30:01+00:00 http://www.tutor2u.net/blog/index.php/economics/comments/information-failures-health-warnings-on-cigarette-packets http://www.tutor2u.net/blog/index.php/economics/comments/information-failures-health-warnings-on-cigarette-packets#When:12:16:00Z Henry Wingfield writes about the impact of health warnings on cigarette packets - they have proved effective in many countries but should the bar be raised in the UK? They are certainly considering it in the United States as the embedded video below suggests. AS and A2 Specifications, AQA Economics Unit 1, EdExcel Economics Unit 1, AS Micro, Government Intervention, Market Failure, Information Failure, Merit & De-Merit Goods, 2011-02-27T12:16:00+00:00