Minimum Prices (Online Lesson)
- AS, A Level, IB
- AQA, Edexcel, OCR, IB, Eduqas, WJEC
Last updated 20 Apr 2020
In this online lesson, students will cover the topic of minimum prices and their effectiveness in tackling market failure. Thank you to Cathy Williams and Jon Clark for their contributions to this lesson.
WHAT YOU'LL STUDY IN THIS ONLINE LESSON
- The types of market failure that can be tackled using minimum prices
- How minimum prices work, with diagrammatic analysis
- How to write an essay on Minimum Unit Pricing of alcohol
- Comparing minimum prices with indirect taxes
- Key evaluation points for minimum prices
There is also the opportunity to carry out your own reading into the use of minimum prices in the labour market (National Minimum Wages).
Additional teacher guidance is available at the end of this lesson.
HOW TO USE THIS ONLINE LESSON
Follow along in order of the activities shown below. Some are interactive game-based activities, designed to test your understanding and application of maximum prices. Others are based on short videos, including activities for you to think about and try at home.
If you would like to download a simple PDF worksheet to accompany the video activities, you can download it here: Minimum Prices. You can print it off and annotate it for your own notes, or make your own notes on a separate piece of paper to add to your school/college file.
ACTIVITY 1: GAME - MARKET FAILURE REVIEW
Try this interactive game, testing your knowledge of the different types of market failure. This will help you to consider the types of market failure for which minimum prices might be a good solution!
ACTIVITY 2: VIDEO - MARKET FAILURE AND MINIMUM PRICES
In this video, you will cover the basics of minimum prices and consider the different types of market failure for which they could be used as an appropriate policy measure.
ACTIVITY 3: VIDEO AND ESSAY ACTIVITY ON MINIMUM UNIT PRICING OF ALCOHOL
The video shown below provides an outline of some of the market failure issues in the market for alcohol, and considers the nature of Minimum Unit Pricing (MUP) for alcohol in Scotland and Wales. The video provides some background and guidance for tackling this essay question:
"Using your economic knowledge, and the data provided, discuss the view that Minimum Unit Pricing for alcohol should be introduced in England."
Ask your teacher how many marks are available for this essay. Have a go, and submit it to your teacher for assessment.
ACTIVITY 4: READING TASK - MINIMUM WAGES
The use of a minimum wage in labour markets is one way in which governments aim to tackle poverty, improve labour mobility, and reduce exploitation in labour markets.
You should also think about the pros and cons of minimum wages. You could watch Geoff Riley's video on this topic here.
If you want a slightly more challenging read, then these two UK government research papers are a great start:
ACTIVITY 5: GAME - MINIMUM PRICE EXAMPLES
Play this interactive game to find out more about real-world examples of minimum prices!
ACTIVITY 6: VIDEO - COMPARING MINIMUM PRICES WITH OTHER INTERVENTIONS
Exam questions often ask you to compare different types of interventions, or to discuss different options. In this video, we compare maximum and minimum prices (because confusing the two is a common exam error) and also compare minimum prices with indirect taxes.
ACTIVITY 7: VIDEO - EVALUATING MINIMUM PRICES
This video rounds up the key evaluation points for minimum prices, as well as analysing the impact of minimum prices on consumer and producer surplus.
ACTIVITY 8: TEST YOURSELF!
Have a go at this interactive quiz, testing your knowledge of both maximum and minimum prices.
ADDITIONAL TEACHER GUIDANCE
This lesson comprises:
- Around 25 minutes of guided video activity, spread over 4 videos and supported by an accompanying worksheet
- Around 20 minutes of "thinking time" and student activity spread over the 4 videos
- 3 interactive game-based activities, reviewing key market failure concepts, applications of minimum prices, and testing knowledge of maximum and minimum prices
- 1 reading and research task on minimum wages
- An essay question task, supported by the content in Video 2 (please advise your students of the number of marks allocated to this essay question - different awarding bodies have different requirements)
We suggest allowing around 60 to 70 minutes for the main tasks in this Online Lesson, along with an additional 30 minutes for the reading task on minimum wages, and 30 minutes for the essay task.
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