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.