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Exam Technique

Theory of the Firm Example Essays (Volume 1) for A Level Economics

  • Levels: A Level
  • Exam boards: AQA, Edexcel, OCR, Eduqas

This booklet provides twelve example essays on Theory of the Firm topics for A Level Economics - each with senior examiner commentary.

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Theory of the Firm Example Essays (Volume 1) for A Level Economics

  • SKU: 02-4130-30016-03
  • Printed Edition

  • £3.95

The example economics essays included in this printed booklet are:

  1. In January 2016, the makers od Ray-Ban sunglasses, Luxottica, agreed a merger with a rival eye-wear firm, Essilor, worth (euro sign)46bn. Evaluate the likely advantages and disadvantages for businesses growing in this way.
  2. Shares in Premier Foods, the company behind famous brands such as Mr Kipling cakes and Bisto gravy, plummeted following a January 2017 profit warning issued by the firm, in which rising production costa were blamed. Evaluate the view that all businesses should aim to maximise their profits.
  3. The company British American Tobacco agreed a takeover deal of its US rival Reynolds in January 2017. This will result in the world’s largest tobacco company. One of the reasons cited for the deal was to benefit from increased economies of scale. Evaluate the view that having a business objective of increased economies of scale is always desirable.
  4. During 2016, the UK’s Competition and Markets Authority conducted an investigation into allegations of cartel activity amongst UK furniture makers. In 2017, two companies – Thomas Armstrong Ltd and Hoffman Thornwood Ltd – were fined £2.8m for fixing prices in the drawer-making industry. The CMA reported that a third company BHK Ltd had confessed to cartel activity shortly after the investigation began and would therefore not face fines. Evaluate the view that industry fines are the best way to tackle collusion in oligopolistic markets.
  5. The telecoms provider EE was fined £2.7m by the industry regulator Ofcom in early 2017 for overcharging thousands of customers who had used their mobile phones when abroad. EE has significant market power. Evaluate the extent to which the existence of monopolies is always bad for consumers.
  6. The UK’s Post Office continues to be strongly affected by increasing competition from courier services such as UPS in the parcel sector, and by the increasing popularity of online communications. For example, in December 2016, more people sent electronic Christmas cards rather than traditional cards through the post. Consequently, the volume of letters sent via Royal Mail was down 9% in 2016. Evaluate the view that increasing contestability in markets is always good for the economy.
  7. Following the UK’s vote to leave the European Union and the Single Market, Prime Minister Theresa May has noted that UK businesses will need to be competitive and efficient to compete internationally. Evaluate the effectiveness of government policies to improve competition and efficiency in the economy.
  8. In 2016 and 2017, passengers using the Southern Train network have faced significant disruption due to strike action, initiated due to the desire by the train provider to make technological changes on the trains so that doors can be shut automatically, rather than by the train conductor. At the same time, technological improvements in driverless car technology look set to male life easier for drivers. Evaluate the likely impact of technological change on the structure of product markets.
  9. It was reported in 2016 that women were paying more than men for shaving products such as razor blades and razors. The only difference between the products designed for women and those for men was colour. Evaluate the advantages and disadvantages of price discrimination.
  10. In mid-2016, the online estate agent HouseSimple received a £13m injection of capital from a famous entrepreneur to help it compete with Purple Bricks, the dominant online estate agent. It is estimated that using an online estate agent can reduce the fees paid by house-sellers by £6000. Currently around 5% of homes are sold online rather than through traditional estate agents with a high street presence. That figure is estimated to increase to 50% by 2020. Evaluate the impact on markets of increasing competition from online suppliers.
  11. In 2016, the Indian company Tata Steel threatened to close all of its production facilities in the UK, potentially risking 15,000 jobs. The UK’s Minister for Business, at the time, that government support would probably be needed but that he ruled out nationalisation of the UK’s steel industry. Evaluate the advantages and disadvantages of nationalisation of industries such as the UK’s steel industry.
  12. The Labour Party has accused the UK’s Conservative government of having “secret plans” to “privatise the NHS”. Evaluate the advantages and disadvantages of the privatisation of organisations such as the NHS.


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