MICROECONOMICS TOPICS

Blog entries on key topics and themes for GCSE microeconomics

The economies of Superbowl advertising

A highlight of the year for many sports fans, the Superbowl presents advertisers with a unique opportunity to reach over 110 million captive viewers.

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Tesco’s market share drops

Tesco’s market share has fallen below 30% for the first time in 7 years. This time last year Tesco commanded a 30.5% market share.
Sainsbury’s and Iceland both saw their market shares rise.

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Perfectly price inelastic supply

What cost $10 in 1937 and would now set you back $1 million?

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Sales will take their toll

Interesting figures released today by the Office for National Statistics show that retail sales, excluding fuel, grew 0.6% in December 2011 compared with November 2011. These figures represented a 1.7% increase from December 2010. This seems to paint a rosy picture.

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Starting a business - video

This video clip is more of a business one but still great for Economists as well. Deborah Meaden on BBC news this morning talking about entrepreneurs and starting a business.
Click here to see the video

Price Elasticity of Supply

Heston Blumenthal’s Hidden Orange Christmas pudding is expected to sell out once again at Waitrose as the last few reach the shops next week.

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Stat for the day - housing market

According to new research from the Bank of England young people should be prepared to rent until the age of 44. A leading member of the Bank said homeownership in Britain is set to fall sharply and the number of people forced to rent will rise. Homeownership has fallen from 70.9% in 2003 to 67.4% today with the rest of people renting.

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Costs of Production - iPhone 4S

The graphic below is a great way to help to explain to students about costs of production and value added. The iPhone 4S costs £499 in the shops. However you may be surprised to hear that the total cost of producing it is £112.89.

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VAT relief on DVDs

The Treasury is scrapping an exemption on VAT for goods valued at less than £15 dispatched from the Channel Islands

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Cost cutting at Cadbury

In an effort to maintain profit margins as the price of commodities rise Cadbury are cutting the number of chocolates in their tins of Roses and Heroes but keeping the price the same.
The weight of a tin of Roses is to be reduced from 975g to 850g. This means 11 fewer chocolates.

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Shoppers flock to Aldi

Normal service now resumes. Having finished marking lots of great GCSE papers I am done for another year!
So I am sure we have all noticed the price of our weekly shop is constantly rising. I was shocked when I got to the till at Tesco this week!
Well it seems that the squeeze on our incomes in pushing people towards shopping at discount shops like Aldi.

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To rent or buy that is the question

The number of private renters in the housing market has increased by 1 million since 2005. The number of owner-occupied houses has fallen in this period. The data below would make a good delicious data piece:

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Peppa Pig the cash cow!

As a mum of small children I know all about Peppa Pig! For those that do not know, Peppa is a cartoon character who loves jumping in muddy puddles. Peppa has become big business not only is it a favourite on TV for many young children but there is a huge array of merchandise that can be bought. According to the latest industry figures, Peppa is now the fourth-highest selling character toy in Britain – ahead of Thomas the Tank Engine and Fireman Sam.

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How crisps are made – technological economies of scale

Here is a nice video to use when explaining how large companies can benefit from technological economies of scale allowing their cost per unit to reduce. It takes you through all of the stages of making crisps, not surprisingly everything is done by machines. It could also be used for a lesson on how companies are trying to become more energy efficient.

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Demand and Supply in action - Bumper strawberry crop

Another great demand and supply in action story to help you revise. Here we see the weather affecting the supply of strawberries (W in PINTSWC). Due to the excellent weather in the UK in April there has been a bumper crop of strawberries already. This is excellent news for British firms as their sales have increased significantly.

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The paper book v’s the E book

Here is a great short audio clip which looks as paper books and e books as substitutes. It make a great starter for revision of demand and supply.

Virgin Active to snap up Esporta

This is a great news story for budding economists. Virgin Active gyms who own 71 fitness clubs in the UK is set to buy the 51 Esporta fitness clubs for £77.6 million. A great case study to discuss the benefits and costs of growth to firms. The takeover still needs to go through the Office of Fair Trading.
Click here to read more.

Competition in Action - Summer sale starts now!

It may have been a little warmer over the weekend but don’t let that fool you that summer is just around the corner. Well it would seem that Debenhams thinks that summer is here. They have just launched their summer sale! Debenhams says its Spring/Summer collections have combined savings of £150m, with tens of thousands of new season lines reduced by up to 25%.

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Competition in Action - Computer games

Nintendo’s profits fell sharply in 2010. Having previously had much success with the Wii where demand outstripped supply they are now pinning their hopes on the new 3DS portable gaming console. Here is a great short video to show students when studying competition.

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It’s a strange world!

When I saw this story I had to check it wasn’t April 1st. The Covent Garden ice cream shop Icecreamist have come up with a new flavour, using human breast milk. The ice cream, called Baby Gaga goes on sale today and will cost £14 for a serving. It will be served with a rusk and an optional shot of Calpol or Bonjela.
This could be used as an interesting demand story, will there be any demand?
There is a good short video with this article

Videos of the week! - Teddy Bears and Specialisation

These two videos looking at Britain’s last surviving teddy bear factory covers a number of topics in economics.

This first video looks at the problems that Merrythought Ltd have faced and the initiatives they have taken to ensure their survival.

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Competition in Action - Wensleydale

Another great competition in action story here. This time it is cheese. Wensleydale cheese is undergoing a £1 million re-branding with the help of Wallace and Gromit.

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Competition in action - Subaru

In an apparent dig at its competitors Lexus and Nissan, Subaru in Canada have produced a great new advert for its Forester. Subaru have used ‘sexy’ Sumos in a series of scenes to promote their car.
Some may say this is a clever move by Subaru as you will not only remember it but you are actively seeking out the Forester so as to not have to look at the ‘sexy’ Sumos.

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The power of advertising

We all know that one of the factors that can cause the demand curve to shift is advertising (A in PASIFIC). Clearly Simon Cowell feels that advertising is very important. During last nights Super Bowl in the US, Simon and his new show had a 30 second advert. With an estimated 100 million viewers watching the Super Bowl it seems like a good idea. But how much would you pay to place an advert in this slot?

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Rubbish - are we going to be limited to 80 bags a year?

Local councils are considering limiting the amount of rubbish that will be collected from peoples homes to just 80 bags a year. So what happens if you produce more? Either you drive to the tip or you buy more bags. The scheme is already in use with one council and is being introduced by another whilst under consideration by up to 180 more. So why is this happening?

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Will the pound shop have to change its name?

So have you like me thought what will the pound shop do because of the increase in VAT, commodity prices and fuel prices. Will they have to change their name? Here the BBC have a great short video telling us what is happening to keep prices down.

Competition in action - games consoles

This a great video to start the new term with. Many of our students will have been given a games console at Christmas. This video could spark a great discussion on what features of a games console makes them buy them. This will lead into a general discussion on how firms compete.

Take That add tour dates to keep up with demand

Last month Innes wrote about excess demand for Take That tickets. In response to this Take That have released a further 4 tour dates. You could use the following article as a short data response with the following questions:

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It’s Manic Monday!

Are you one of the many people on the internet today doing your Christmas shopping? Dubbed Manic Monday, today is supposed to be the busiest day for online Christmas shopping. An expected £537 million will be spent today.

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Competition in Action - Reindeer meat

With just 41 days to go till Christmas I am sure our thoughts are turning towards presents, mince pies, christmas trees and reindeer. However, I am sure that we have not been thinking about eating reindeer meat.
Discount supermarket chain Lidl have taken the decision this year to sell reindeer meat.

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