Revision - Labour Market Failure (presentation)
Here is a revised streamed presentation on market failure in the labour market
read more...»Snack attack
Street hawkers normally have an instinctive ability - honed through several generations - to spot well-heeled tourists a mile off and engage in a spot of first degree price discrimination and exploit informaton failure among confused jet-lagged travellers. Here is a neat short story of a Dutch couple who may just have bought the most expensive plate of four samosas in commercial history. Then again, perhaps they were just the first to complain to the local police.
The article is also memorable for alerting us to the availability of camel urine - a bargain at just over £1.34 per litre.
Maintaining profitability in the airline industry
My students have been tackling this assignment this week as part of their microeconomics course.
(a) Many airlines have reported heavy losses and several have already gone into administration or filed for bankruptcy. Using cost and revenue diagrams, explain why airlines have been experiencing such losses (15)
(b) Discuss the ways in which airlines can control their losses and continue to operate profitably in an industry where costs and revenues are unpredictable (15 marks)
Answers to part (b) sort the wheat out from the chaff!
Madonna’s pub accused of price gouging
It sounds like a classic case of price gouging or price discrimination and it is a bitter blow for non-regulars at the pub owned by Madonna and Guy Ritchie. Several newspapers have relished the news that the Punchbowl in Mayfair has been charging different prices to different customers for the same drink - segmenting the market between regulars and occasional visitors. The Telegraph reports that Brian Richardson, 52, who has been a customer for 12 years, was charged £3.50 for a pint one day, and £3.90 the next. He said: “I was shocked. I complained to staff. They have got two prices - regulars prices and non-regulars prices.”
It is not often that I link to the business stories covered in the Daily Mirror - but here we go!
Plenty of room at the Beijing Inn
The long awaited financial bonanza for Beijing’s hotels during the forthcoming summer Olympic games seems less likely to materialise with the news that many 3 and 4 star hotels remain vastly under-occupied with the games just a few days away. It seems that the expected influx of nearly 500,000 visitors from overseas will prove to be an over-estimate - tourists appear to have been put off by the cost of travelling, fears over security and the time and expense of arranging visas. Domestic visitors from elsewhere in China seem to have been affected by the massive earthquake in south-west China and the snowstorms that struck the south in February.
The response of hoteliers when market demand turns out to be lower than forecast is a classic form of second degree price discrimination - reducing rack rates in a bid to increase the take up of unsold rooms. Given the travel distances involved, it would appear unlikely that the price reductions will have much impact in enticing people onto planes bound for Beijing this August. Most of the four or five star hotels will already be full of Olympic dignitaries most of whom wont have to pay a penny for their time at the Games.
Revision: Labour Market Failure
Markets fail when they do not reach an efficient and/or equitable outcome from society’s point of view. At AS level, you will have studied many examples of possible market failure ranging from the provision of public and merit goods through to externalities and the welfare consequences of monopoly power in markets. At A2 level, you are asked to explore some issues relating to labour market failure. This revision note flags up a few of them:
Revision note:
Revision_Labour_Market_Failure.pdf
Most Popular Topic Tags on the Economics Blog
recession, demand, economics, unemployment, price, prices, inflation, investment, costs, profit, downturn, trade, supply, debt, confidence, euro, gdp, competition, employment, capacity, production, risk, china, oil, incentives, exports, housing, expectations, pay, manufacturing, sterling, food, profits, property, tutor2u, mortgage, globalisation, banks, revision, slowdown, borrowing, usa, retailers, emissions, airlines, deflation, innovation, dollar, supermarkets, entrepreneur, efficiency, monopsony, elasticity, aqa, welfare, consumption, economist, productivity, saving, keynes, wealth, opec, depression, moodle, depreciation, jobs, competitiveness, credit crunch, cars, google, stocks, infrastructure, economic cycle, environmental, strategy, tim harford, externalities, carbon, vle, subsidy, evaluation, eu, management, losses, protectionism, inequality, spare capacity, environment, poverty, monopoly, bank of england, construction, behavioural, macroeconomics, output gap, budget deficit, carbon trading, steel, wages, japan, oligopoly, commodities, currencies, imports, bbc, stagflation, contestable, agflation, cpi, farming, newsnight, choices, skills, regulation, survey, taxes, government failure, itunes, minimum wage, lse, climate change, paul mason, population, intervention, aviation, keynes society, fiscal stimulus, amazon, single market, pricing, dan ariely, cartel, eton college, pollution, interest rates, shareholder, london, rationality, market failure, redundancies, rpi, mpc, shipping, behavioural economics, germany, robert peston, india, reputation, rsa, facebook, income elasticity, current account, stakeholders, brazil, coffee, savings, microsoft, monetary policy, crowding out, barriers to entry, collapse, multiplier effect, nationalisation, suppliers, economies of scale, price discrimination, uk economy, development, quiz, currency, quantitative easing, apple, surplus, labour market, tesco, free, behaviour, tragedy of the commons, opportunity cost, open source, vat, smoking, ireland, poverty trap, merger, growth, edinburgh, ownership, discrimination, cost benefit analysis, global, supply chain, oecd, shareholders, scarcity, balance of payments, petrol, liquidity, duopoly, iphone, starbucks, trade deficit, happiness, etonomics, scrappage, human capital, subsidies, capital, immigration, eurozone, takeover, ecb, paradox of thrift, exploitation, advertising, taxation, wiki, iceland, utility, wants, labour force survey, cost of living, brand, blog, speculation, poland, foreign exchange, spain, indirect tax, robert frank, northern rock, roger bootle, ocr economics, heathrow, hbos, animal spirits, hotels, freight, federal reserve, kaletsky, price war, information failure, crude oil, transport, gini coefficient, sony, creative destruction, leverage, migrants, us economy, fishing, waste, information, tax, government borrowing, milk, budget, eu enlargement, anchoring, obama, aggregate demand, entrepreneurship society, needs, peter day, recovery, forecast, european union, internet, discounting, real income, copper, deficit, public sector, nissan, contestability, companies, david smith, fairness, blogging, standard of living, aqa economics, martin wolf, renewable, labour mobility, twitter, sentiment, geoff riley, collusion, imf, accelerator effect, fair trade, pubs, income tax, obesity, guardian, consumer welfare, res, disposable income, corus, national debt, devaluation, consumer surplus, vacancies, sub-prime, tariff, global economy, broadband, joint venture, startups, vehicles, yuan, immobility, income elasticity of demand, edexcel economics, tata, redundancy, accelerator, walmart, relative poverty, youth unemployment, coal, tickets, edmund conway, cash, pensions, diesel, base rate, russia, movies, liquidity trap, contestable market, marginal cost, external shocks, stephanie flanders, libor, fixed costs, comparative advantage, allocative efficiency, training, satisficing, hot money, rory cellan-jones, status races, congestion, price mechanism, healthcare, deleveraging, hyperinflation, economic efficiency, migration, veblen goods, credit, social entrepreneur, apprenticeships, age structure, cyclical, king of shaves, monopoly power, financial times, evan davis, automatic stabilisers, wheat, ucas, reserve currency, ryanair, drugs, aldi, scotland, carbon tax, positional goods, stimulus, deindustrialisation, ebea, chris coleridge, yahoo, organic growth, barclays, pay cuts, liberalisation, equity, richard thaler, royal mail, diseconomies of scale, pension, demography, structural, gillette, logging, tax burden, bonds, savings ratio, will king, job losses, ocr, nhs, biofuel, nelson thornes, house prices, cross elasticity, brics, redistribution, slump, markets, footfall, british airways, paul krugman, schumpeter, price capping, green revolution, income distribution, the economist, eastern europe, logic of life, ft, contraction, enterprise, general motors, natural monopoly, health, research, o2, deforestation, enlargement, producer welfare, economic welfare, asda, supply-side, landfill, social costs, economax, energy, long tail, jim o'neill, diane coyle, profit margin, podcast, share prices, tariffs, external shock, philip allan, hedge fund, students, fiscal drag, green shoots, ftse, elasticity of supply, buy to let, market power, disincentives, ben bernanke, resources, retailing, trend growth, declan curry, nokia, undercover economist, hysteresis, price fixing, chris anderson, bric economies, dynamic efficiency, zimbabwe, hamish mcrae, toyota, market structure, global business, john kay, fiscal policy, winners curse, compound interest, contestable markets, frictional, hedging, claimant count, repossession, royal economic society, sustainability, public good, law of unintended consequences, cambridge, robert skidelsky, vertical integration, economics teacher inset, probability, sustainable growth, business cycle, fairtrade, freemium, yields, national institute, nairu, costa, rentokil, price regulation, radio, central bank, oft, baltic dry index,All tags
ECONOMICS TEACHER RESOURCE NEWSLETTER
Join over 4,000 other Economics Teachers in the UK and around the world who receive the tutor2u Economics Resource Email newsletter. Get special offers, first news of latest resources, teaching ideas, conferences and workshops.
Recent Threads on the Economics Teacher Discussion Forums:
Posts in: General Economics Teaching
Shifts in the Labour Market
Good hotel in London for school trip
Competitive Markets
Diminishing Returns
Complementary goods - HELP Please!
URgent Help Needed
Equilibrium concept
The price of life
Extended Project Qualification
Economics course structure
