Competition in action - M&S to sell top brand names
Marks and Spencer have recently lost market share in part due to the emergence of Waitrose but also due to shoppers trading down supermarkets due to the recession. Well M&S have decided to fight back.
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•Competitive markets -
Tags: competition, gcse micro
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My trip to Brazil - The Olympics, Market Failure and the Exchange Rate
Last week I was given the opportunity to go to Rio to compare the Brazilian education system to our own. Whilst there I thought it would be interesting to look out for any interesting economic stories for the blog. This is what I found.
I couldn’t help but notice how positive everyone seemed to be about Rio securing the Olympics in 2016, with many expecting growth to skyrocket after the event. It may be interesting for your students to use this article to discuss the economic impact of an Olympics on the host city.
The inequality of income in Rio is a great example of market failure. I was lucky enough to see a school in the middle of the second biggest favela in Brazil. There I saw that many in Brazil have not benefited from economic growth and live in appalling conditions surrounded by drugs and violence. (We drove past a drug dealer carrying an AK 47!) Click read more for some questions on market failure
The Brazilian Secretary of Economic Policy believes the currency has to weaken by 19% to allow for strong economic growth in the country. Students can use the mnemonic, SPICED to remember the effect of a strong currency. Strong Pound Imports Cheap Exports Dear. Click read more for some questions on exchange rates
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Fantastic interactive guide – economic growth
The Guardian has come up with another great interactive guide showing GDP growth in countries across the world. Growth ranges from -2.6% in Finland to 7.9% in China.
How would you spend £38bn?
As the amount the government have pumped into the banking system in the UK continues to rise, the Guardian looks at what else this huge sum of money could be spent on.
•Government income and expenditure -
Tags: government spending, gcse macro
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Video games - positive or negative externalities?
Not long ago video games such as Grand Theft Auto were being blamed for childhood obesity, reclusive children and an increase in violent crimes. These negative externalities were considered to be so harmful that some people felt certain games needed to be banned. It seems however that the general public has had a change of heart. 46% of a recent Times survey felt the reputation of the video game industry has improved due to one product…the Nintendo Wii. It produces many positive externalities such as reducing strain on the NHS, as an increasing number of people use games such as Wii Fit to develop an active and healthy lifestyle. Analysts even believe the console can improve family relationships as they get together to play games. Click read more for some classroom activities to go with this article.
Demand and Supply in action - The housing market
The housing market has seen six consecutive months of price increases suggesting an upturn. We have also seen the first annual percentage price rise, 2% on the previous year.
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•Competitive markets -
Tags: prices, demand and supply, gcse micro, housing market
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L, U, W, V or bathtub shaped?
No doubt we have all heard the various letters and shapes that have been suggested for the shape of this recession. This article in the Guardian would make a great start to the half term possibly prompting an interesting discussion.
•Economic growth -
Tags: recession, gdp, gcse macro, economic growth
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Great data on the global recession
The Guardian has once again produced a great guide to the countries that are still in recession and those that are beating it.
•Economic growth -
Tags: recession, gdp, international economics, gcse macro
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The UK still in recession - some great resources
As it was announced today that the UK remains in recession with the economy unexpectedly contracting 0.4% between July and September, there are some great resources around for teaching economic growth and GDP. The graph below from the BBC shows this recession and the last.
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•Economic growth -
Tags: recession, gdp, resources, gcse macro, economic growth
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The self service supermarket – Technological unemployment
Here is a great example of technological unemployment. Tesco have opened their first self-service only shop which requires just one person to supervise five tills. Critics worry this could lead to massive job losses as the major supermarkets currently employ around 750,000 people. Click read more for some GCSE style questions to go with the article.
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How should we tax those greedy bankers?
The country is in uproar about bankers receiving bumper bonuses this year. Here is an interesting video from the BBC which asks whether banks should face a windfall tax. It could be used as a starter for a lesson on tax where you could ask pupils to think about the pros and cons. They could also use the following article from the Guardian website to think of other ways to tax bankers.
Mnemonic Monday - PED Calculation
Whilst marking hundreds of OCR papers over the summer, I noticed a lot of students understood PED but mistakenly put price on the top of the calculation and quantity on the bottom. Here is a very simple way to make sure pupils always put % change in quantity on the top and % change in price on the bottom for PED.
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Alcohol 50p a unit - Minimum price lesson
Every time I teach minimum prices I always talk about the minimum wage or the agricultural market but today I was delighted to find a new example which I will be using from now on. It has been suggested that alcohol should have a minimum price of 50p per unit, well above the current lowest price of alcohol which is currently around 9p per unit. By setting the price high, demand should reduce which in turn will hopefully slow the current trend of alcohol related deaths. Click read more for some questions on minimum prices.
Super Starter Sunday - Beat the Teacher 3
This weeks beat the teacher is based on supply. Can you spot the mistakes in the text?
Beat_the_Teacher_3.doc
Beat_the_Teacher_3_answers.doc
The US criticises the weakened Yuan – Protectionist policies
I wrote a blog last week about China’s exports recovering from a huge dip. They have done this by actively keeping their currency weak and proving firms with tax rebates to ensure companies maintain their price competitiveness. This has angered the US who feel China’s currency is undervalued by 20% to 40% which means that Chinese products are cheaper for US consumers and American products cost more in the Chinese market. This would be a good article to use when teaching currency, the balance of payments or protectionist policies. Click read more for some GCSE style questions on these topics
Is a weak pound good?
As some of you may be discovering it isn’t a great time for UK holiday makers to go on holiday in the USA or Europe. As the value of the pound against both the dollar and the euro has weakened it has meant that it is more expensive to buy goods abroad (remember as a tourist going abroad we are an import because the money goes out of the UK and into the foreign country). Could this weak pound be good for the UK economy as a whole?
read more...» •Exchange rates and currencies -
Tags: exports, eu, imports, exchange rate, international trade, gcse macro, widec, trading partners
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More interactive unemployment data
Following the announcement that unemployment is still rising but at a slower rate, the Guardian have produced a great interactive graph with data on both the claimant count and the LFS dating back to 1971.
•Employment & unemployment -
Tags: unemployment, gcse macro, interactive data
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Price war in the mortgage market?
Competition in most markets is great for the consumer. It can help to drive down prices and improve quality. The market for mortgages is no exception. Nationwide have this week slashed interest rates on their mortgages and are once again offering 95% mortgages.
read more...» •Competitive markets -
Tags: competition, price war, gcse micro
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Starter picture – Over 10,000 people in queue for a jobs fair
This blog doesn’t take much explaining. Click read more to see a photo of a massive queue for a job fair in Canary Wharf to show at the beginning of a lesson on unemployment
read more...»The world’s largest trade fair – China’s exports rebound
China’s current account has taken a big hit during the recession with exports falling by as much as 25% from the previous year. Things are looking up however at the world’s biggest trade show in Guangzhou China where the signs are good that trade is finally rebounding. The interesting point to take from the article is how China’s government has helped increase exports, which could be really useful for revision on how to improve the state of a country’s current account. The government has actively kept their currency weak and provided firms with tax rebates to ensure companies maintain their price competitiveness. Click read more for some questions to go with the article.
Inflation video
Yesterdays announcement that inflation as measured by the CPI had fallen to 1.1% in September and the RPI had dropped to -1.4% further fueled concerns that the UK may not come out of the recession by the end of the year.
read more...» •Price stability and inflation -
Tags: inflation, cpi, rpi, gcse macro, video
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New charge faced by London’s drivers
The new OCR GCSE specification expects pupils to have an understanding of policies the government could use to help reduce externalities. The mayor of London, Boris Johnson has outlined a plan to make drivers pay for using the busiest roads in the capital.
read more...» •Fiscal policy -
Tags: externalities, congestion, gcse macro, tax revenue
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UK has worst quality of life in Europe – Economic growth and living standards revision
I am currently teaching economic growth to my year 11’s and have got used to saying an increase in GDP improves the standard of living in a country. At GCSE this statement is usually enough but this article could get your pupils extra marks for evaluating whether this is actually true.
A study has show Britain to have the worst quality of life in Europe despite having an average household income of £35,730 a year, over £10,000 higher than the European average. This is because British families have to contend with a high cost of living, with fuel, food and alcohol all costing more than the European average. Not only that but we are also working longer hours, having less holiday and dealing with worse weather. Click read more for some GCSE and A level style questions on economic growth and living standards.
•Economic growth -
Tags: gcse macro, living standard, economic growth
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Super Starter Sunday - Supply and demand special
This has been a fantastic week to teach supply and demand as there have been so many stories in the news that could be used as examples. This super starter has bought them all together and would work as a great starter where the pupils have to guess the news stories using the pictures or could be used as the basis of a whole supply and demand lesson. I am going to ask my students to draw a supply and demand diagram for each example and show whether there is a shift in supply or demand.
•Price mechanism -
Tags: gcse micro, starter, supply and demand
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Demand and Supply in action - Champagne affected by the recession
As a luxury good it is probably unsurprising to hear that the sales of champagne have dropped significantly.
•Competitive markets -
Tags: recession, demand and supply, gcse micro, luxuries, yed
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Sugar prices on the up – Supply and demand, PED and PES
This article on raw sugar is pure gold! It could be used for lessons on demand and supply, PED or PES.
Supply and Demand
The price of raw sugar peaked at 24.85 cents last month, its highest since 1981. The increase in price has been caused by a large proportion of Brazilian sugarcane being diverted from food use into ethanol production. At the same time, the biggest consumer of sugar, India, has had a dismal monsoon season and has gone from being a net exporter of sugar to an importer. These two factors have caused supply to drastically reduce, increasing the price of raw sugar.
Price elasticity of supply
One of the key factors that affects the price elasticity of supply of a good is the availability of stockpiles. In this case, even though consumption of sugar is predicted to outstrip production by 9m tonnes next year, governments and food companies have stockpiles that could be dipped into. Therefore supply should be more elastic than you would expect of a good that takes a long time to produce.
Price elasticity of demand
Any sugar lovers out there should not panic as in Europe and the US sugar prices are fixed to protect sugar beet farmers.
In addition, even if prices were not fixed, demand is unlikely to change for sugar as it is a small proportion of a person’s income. Even if the price were to increase substantially, people are still likely to buy it. Click read more for some questions to go with this topic.
Mnemonic Monday - Fiscal Policy
This weeks mnemonic is the way my students remember what fiscal policy is.
read more...» •Mnemonic Monday -
Tags: taxation, fiscal policy, government spending, gcse macro
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Milk prices plummet – Supply and demand
Here is a great article to explain why too much supply can cause prices to crash. Milk producers across the EU have driven their tractors to Brussels in protest of what that see as uneconomic milk prices. The simple problem is far too much milk is being produced. Some farmers have even had to dump some of their milk and withhold their supply to try to raise prices. Click read more for a GCSE style question to go with this article.
Changes in taste – Shift in demand
I have just taught demand to my Year 10’s and was finding it hard to think of a new example of how changes in fashion and taste can influence demand. For the last few years I have resorted to talking about clothes going in and out of fashion but here is a new example to use. Real Ale is the only type of beer to see its sales grow in UK pubs. This is down to a change in taste from women drinkers as their consumption has doubled. As a starter your pupils could show this information on a demand diagram.
Another solution to finding a job
An Italian supermarket has come up with an interesting way to help its unemployed customers. Along with buying your groceries you can enter a lottery, where the prize is a job. This video would make a great starter.
•Employment & unemployment -
Tags: unemployment, gcsr macro
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