Oil Externalities

This New York Times article discusses a textbook case of negative externalities - the recent BP oilspill. This article is useful for Unit 1 reading.

Define negative externalities and list some of the external costs as a result of this oilspill.

To what extent has the government taken measures to counter the effects of these externalities?

The UK's Economic Recovery

This article from the Economist provides a useful discussion of the key macroeconomic problems faced by the UK even as it begins to recover from the recession.

What kind of monetary policy has been in place since early 2009?

With reference to the case of the UK, discuss whether devaluation will necessarily lead to an increase in the level of exports.

Boys Stink... or Is It Just Plain Economics?

This article is an entertaining attempt to explain an age-old complaint using economics - in situations where there is a shortage of eligible bachelors (or to put it more harshly, an excess supply of girls), the bargaining power unquestionably lies in the hands of the scarce resource. Hence, the author finds this complaint particularly common amongst women in American universities, where, according to the American Council on Education, at least 57% of enrolments have been female since 2000.

Note for Cambridge Students

The reading material on this blog is organised according to the corresponding unit for Edexcel A Levels. If you are doing Cambridge A Levels, please note that Units 1 & 2 roughly correspond to the AS level, while Units 3 & 4 correspond to the A2 level.

Unit 1- Reading Material

The following articles from the Financial Times provide an analysis of the demand and supply for two luxury food and beverage items: lobster and champagne.

Using a demand and supply diagram, explain the causes of the price trends discussed in the various articles.

Using evidence from the 2nd passage, to what extent is the demand for champagne elastic/inelastic?

Christmas Gift Trends (Unit 1 Reading)

The e-book is rapidly becoming a threat to the book as most of us know it. This Christmas, the Guardian documents how sales of e-books on Amazon overtook printed books for the first time.

What is the relationship between e-books and printed books? Comment on the cross elasticity of demand for these products.

Name two factors that are likely to increase the demand for e-books.

The NHS (Unit 1 Reading)

For a good example of government intervention to provide a merit good as well as some of the problems associated with this, the following article from the Economist has some useful insights.

Unit 4 - Reading Material

An interesting article from the Economist on the pre-budget announcement recently made by the Chancellor of the Exchequer, Alistair Darling.

What is the definition of a government deficit?

Name three measures that the British government is taking to control the size of its deficit.

Mountains of Beef and Butter (Unit 1 Reading)

For an overview of the Common Agricultural Policy (CAP), the BBC has a useful and succinct Q&A available here. A general understanding of the policy and the problems associated with it is important to be able to provide examples of market and/or government failure.

Smelly Star in the Limelight (Unit 1 reading)

An unlikely candidate has become the target of speculation in Chinese markets. We are accustomed to reading articles about large fluctuations in commodities such as coffee and copper, but an article from the Economist reveals a more unglamorous crop now in the limelight: garlic.

Using a supply and demand diagram, explain the fourfold rise observed in the price of garlic. (You should be able to name at least two demand factors and one supply factor)

Is the demand for garlic elastic or inelastic? Discuss.

Energetic Competition (Unit 3 Reading)

This article from the Guardian discusses a plan by the Conservative party in the UK to introduce more competition into the energy industry that is currently dominated by 6 major players at present. If they are elected, the Conservatives promise to begin a Competition Commission investigation into the matter.

What is the role of the Competition Commission?

To what extent is there a scope for further efficiency in the energy industry? (Think of allocative and productive efficiency)

Evaluate whether the energy market is contestable.

The Banana Wars (Unit 4 reading)

A long standing trade dispute between Europe and certain former colonies - some former colonies have long enjoyed special access to European markets, relying heavily on banana exports to the region. But how long should these privileges continue? This article from the Guardian discusses a controversial move to remove these trade barriers.

If this move to remove the barriers takes effect,

1) What are the potential benefits for European consumers?

2) What are some of the disadvantages for the former colonies?

Mean Supermarkets? (Unit 3 reading material)

An article from the BBC discussing the monopsonistic market that food suppliers face since the UK supermarket scene is dominated by 4 key players. What is a monopsony, and what are some of its advantages and disadvantages? Can you name another example of a monopsony?

Reading Material - Unit 4

Why can't countries use aid money responsibly? We are often taught to think that the reason is corrupt governments, who siphon away this money into their Swiss bank accounts.

While corruption is a serious problem in many countries, India's case is interesting - the country is actually sitting on a large amount of aid money that has yet to be spent! India Today has published a very interesting article that highlights some of the problems the country faces in effectively allocating the international aid it receives. This is a result of the country's excessive red tape (too many rules and regulations, and slow implementation), which reminds us that corruption is not the only obstacle to proper utilisation of donor's funds.

Reading Material - Unit 2 & 4

This New York Times article highlights the importance of understanding the method used to measure unemployment. While the official US jobless rate was 10.2% in October, an alternative measure that has a broader definition was recorded at 17.5%.

Unit 2 students (previously Unit 3), can you answer the following?

1) Describe the various ways that unemployment is measured in the UK? (e.g. JSA/claimant count, Labour Force survey)

2) Outline two key reasons behind the rising unemployment rate in the US?

Reading Material - Unit 3

Two articles by the Guardian and the Economist on the hostile takeover offer from Kraft for Cadbury.

Some useful questions to ask yourself if you are preparing for Unit 3 (formerly Unit 4):

1) Evaluate two sources of cost savings that the merger of Kraft and Cadbury would create.

2) To what extent is the market for chocolate and confectionery contestable?

LRT Economics

Are we any better?

For the first time in a long while, I rode the train today and came back irate about how inconsiderate people around me seemed to be. People were as usual, crowding around train doors, pushing to get in. It is obvious that passengers outside the train cannot enter until those inside have exited, and hence, blocking their way only slows things down. Why don’t people bring their manners to train stations?

I looked it up when I came home this evening, and as expected, Tim Harford has suggested an economic answer to this question.

Applying to the Ivy Leagues?

Check out Nathaniel Tan's preparatory classes - which are designed to help students with their application essays and interviews. Nathaniel is a Harvard University alumnus and has two years of experience as an admissions interviewer.

Reading Material - Unit 4

How does the budget filter down into the economy? The Nut Graph features an article by Tony Pua on the likely impact that the credit card tax will have on consumer spending in Malaysia. The Edge presents a differing view.

Reading Material - Unit 1 & 3

Is snail mail dead? This article from the Economist discusses the factors leading to the rapid fall in demand for traditional postal services across the world, and how service providers are evolving in response to this trend.

Unit 1 students, are you able to "Identify three factors contributing to the decline in postal services demand"?

Unit 3 students, are you able to "Evaluate two strategies that postal services providers could pursue to maintain their profitability"?