Rent controls aim to make housing more affordable but can distort housing markets and reduce rental supply. The document discusses how rent ceilings set below market equilibrium can cause excess demand and potential shortages. It evaluates arguments for and against maximum rent policies, noting the need to consider long term effects on supply and potential unintended consequences. Alternatives to address housing shortages like relaxing planning rules and incentives for building could improve rental markets while avoiding market distortions from price ceilings.
This document discusses business models for information and news in the digital age. It explains how some traditional revenue models for newspapers like classified ads and subscriptions have declined due to changes brought by the internet. It then discusses how some businesses have succeeded by using two-sided network effects, where one market is subsidized to increase profits in another linked market. Examples discussed include how operating system companies profit from developers. The document argues news businesses could adopt models that leverage user generated content, add value as platforms, and focus on credentialing and filtering content. It also advocates for new approaches like presenting information as an interactive process.
For n commodities, the slope of the budget constraint when plotted with x1 on the horizontal axis will be:
-p1/pn
Where pn is the price of the commodity on the vertical axis.
So in general, the slope of the budget constraint tells us the relative prices of commodities when one commodity is plotted on the horizontal axis.
This document provides tips and advice for the AS Microeconomics exam. It discusses:
- The meaning of common command words used in exam questions.
- What to expect on objective test questions, including the number of questions on different topics.
- How to earn full marks on supported multiple choice questions, such as by defining terms and using diagrams.
- General advice for data response questions, including identifying significant features in the data and using diagrams and economic analysis for full marks.
This document provides exam technique tips for Unit 1 Microeconomics and Unit 2 Macroeconomics exams. It outlines the structure and marking schemes for multiple choice and data response questions. For data response questions, it emphasizes the importance of defining terms, drawing diagrams, using evidence, and providing evaluation. Evaluation questions require assessing theories, considering different perspectives, and backing up answers with evidence. Proper command word understanding and time management are also stressed.
Tutor2u - Government Intervention – Subsidiestutor2u
Exam questions involving drawing subsidy diagrams are typically found demanding by many students so please remember to revise this area of the course properly and get in lots of practise for this type of government intervention. If your analysis is accurate, you will frequently be given plenty of scope to critically evaluate the role of subsidies particularly when it comes to addressing different types of market failure. Strong evaluation understands the importance of elasticity in assessing the impact and also considers alternatives to subsidies by the government.
This document provides a mark scheme for the GCE Economics exam from Edexcel. It contains three sections: 1) general marking guidance, 2) the mark scheme for exam paper 6EC01, and 3) the mark scheme for exam paper 6EC02. Each question in the schemes includes the answer, and how many marks are allocated to different parts of the answer. The highest number of marks that can be awarded for a question is 4. The mark scheme provides a detailed breakdown of the key points examiners should look for in students' answers to award marks correctly.
The document discusses various types of maximum prices or price caps that governments and regulators impose, including caps on housing rents, energy prices, CEO pay, mobile roaming charges, water prices, payday loan interest rates, and pension charges. It analyzes the effects of price caps using supply and demand diagrams, noting they may lead to shortages and black markets. The document also evaluates the merits and drawbacks of price caps in different markets, such as increasing fairness but also potentially reducing investment if profits fall.
This document discusses minimum prices in markets. It provides examples of minimum price policies, such as price support schemes for farmers. A minimum price is a form of government intervention that sets a price floor in a market. To be effective, the minimum price must be above the normal free-market equilibrium price. If set too low, it will have no impact on the market. The document also discusses debates around introducing minimum prices for specific goods like alcohol.
This document discusses business models for information and news in the digital age. It explains how some traditional revenue models for newspapers like classified ads and subscriptions have declined due to changes brought by the internet. It then discusses how some businesses have succeeded by using two-sided network effects, where one market is subsidized to increase profits in another linked market. Examples discussed include how operating system companies profit from developers. The document argues news businesses could adopt models that leverage user generated content, add value as platforms, and focus on credentialing and filtering content. It also advocates for new approaches like presenting information as an interactive process.
For n commodities, the slope of the budget constraint when plotted with x1 on the horizontal axis will be:
-p1/pn
Where pn is the price of the commodity on the vertical axis.
So in general, the slope of the budget constraint tells us the relative prices of commodities when one commodity is plotted on the horizontal axis.
This document provides tips and advice for the AS Microeconomics exam. It discusses:
- The meaning of common command words used in exam questions.
- What to expect on objective test questions, including the number of questions on different topics.
- How to earn full marks on supported multiple choice questions, such as by defining terms and using diagrams.
- General advice for data response questions, including identifying significant features in the data and using diagrams and economic analysis for full marks.
This document provides exam technique tips for Unit 1 Microeconomics and Unit 2 Macroeconomics exams. It outlines the structure and marking schemes for multiple choice and data response questions. For data response questions, it emphasizes the importance of defining terms, drawing diagrams, using evidence, and providing evaluation. Evaluation questions require assessing theories, considering different perspectives, and backing up answers with evidence. Proper command word understanding and time management are also stressed.
Tutor2u - Government Intervention – Subsidiestutor2u
Exam questions involving drawing subsidy diagrams are typically found demanding by many students so please remember to revise this area of the course properly and get in lots of practise for this type of government intervention. If your analysis is accurate, you will frequently be given plenty of scope to critically evaluate the role of subsidies particularly when it comes to addressing different types of market failure. Strong evaluation understands the importance of elasticity in assessing the impact and also considers alternatives to subsidies by the government.
This document provides a mark scheme for the GCE Economics exam from Edexcel. It contains three sections: 1) general marking guidance, 2) the mark scheme for exam paper 6EC01, and 3) the mark scheme for exam paper 6EC02. Each question in the schemes includes the answer, and how many marks are allocated to different parts of the answer. The highest number of marks that can be awarded for a question is 4. The mark scheme provides a detailed breakdown of the key points examiners should look for in students' answers to award marks correctly.
The document discusses various types of maximum prices or price caps that governments and regulators impose, including caps on housing rents, energy prices, CEO pay, mobile roaming charges, water prices, payday loan interest rates, and pension charges. It analyzes the effects of price caps using supply and demand diagrams, noting they may lead to shortages and black markets. The document also evaluates the merits and drawbacks of price caps in different markets, such as increasing fairness but also potentially reducing investment if profits fall.
This document discusses minimum prices in markets. It provides examples of minimum price policies, such as price support schemes for farmers. A minimum price is a form of government intervention that sets a price floor in a market. To be effective, the minimum price must be above the normal free-market equilibrium price. If set too low, it will have no impact on the market. The document also discusses debates around introducing minimum prices for specific goods like alcohol.
This document provides tips for writing high-quality exam answers to reach the top grades. It advises answering the question, including better paragraph structure with depth and a logical chain of arguments. It also cautions considering the effect of an answer and focusing on a small number of well-developed points rather than scattergun or bullet point approaches. Students are encouraged to get help from teachers, tutors and fellow students on social media.
Here are the key points that could be made in evaluating the argument for solar subsidies:
- Subsidies distort the free market and may be an inefficient use of taxpayer money if they artificially promote an industry that is not yet competitive. However, supporting emerging technologies like solar can have benefits if it accelerates cost reductions over time.
- While subsidies create jobs in solar installation, they may also negatively impact jobs in other energy sectors. There are opportunity costs to public funds that could be better spent elsewhere.
- Targeting subsidies only to lower-income households could help address the concern that richer households benefit disproportionately. Means-testing subsidies could maximize the social benefits.
- Improving consumer protections against mis-selling and
The document discusses various types of government intervention in markets, including taxes, subsidies, price controls, and regulation. It also examines how buffer stock schemes can help stabilize prices by buying excess supply when prices fall and releasing stock when prices rise. The effects of taxes and subsidies on producer and consumer surplus are analyzed using supply and demand diagrams. Subsidies are more likely to lower prices when demand is price elastic.
The document discusses the welfare effects of taxes and subsidies on goods. It shows how a tax increases the price consumers pay and decreases the price suppliers receive, with tax revenue collected by the government. Consumers bear more of the tax burden when demand is inelastic. A subsidy decreases the price paid by consumers and increases the price received by suppliers, with the government providing subsidy payments. When demand is elastic, a subsidy leads to a large rise in the quantity demanded of the good.
A2 Macro - Growth Development and Global Economytutor2u
This document provides an overview of globalization and the global economy. It discusses factors driving globalization like technological advances, declining transportation costs, and liberalized financial markets. It also examines the shifting center of global economic influence from Western nations to East Asia. The document outlines benefits of globalization like increased trade and specialization, as well as risks like rising inequality and macroeconomic instability. It also profiles sovereign wealth funds and their growing investments in companies around the world.
This document discusses how imperfect information can lead to market failure through the concepts of merit and demerit goods. It explains that merit goods have undervalued private benefits due to information failure, leading to underconsumption. Examples include education and healthcare. Demerit goods like cigarettes have overvalued private benefits due to imperfect information, resulting in overconsumption. Both can cause market failure since consumption levels do not reflect true social costs and benefits when private estimates are inaccurate. Governments may intervene to address underconsumption of merit goods and overconsumption of demerit goods.
This document discusses monopoly power in markets. It defines a pure monopolist as a single supplier that dominates an entire market with 100% concentration. In reality, a working monopoly is deemed to be any firm with over 25% market share, while a dominant firm has at least 40% share. Monopolies can lead to higher prices and lower output compared to competitive markets. However, monopoly power also allows firms to invest profits into research and development. There are economic arguments both for and against monopolies, and intervention may or may not be effective depending on the specific market.
This presentation covers some aspects of topical issues in trade and economic development. Designed for A2 economics students - links to some Financial Times videos with special reference to the work of Hidalgo and Hausmann and their index of economic complexity
This document discusses different types of development aid and financial flows to developing countries. It outlines various types of bilateral, multilateral, and humanitarian aid, as well as different private capital flows including foreign direct investment, remittances, and loans. Key statistics presented include total official development aid of $128 billion in 2010 compared to $1042 billion in private flows, with over half of private flows from foreign direct investment and remittances. The case for overseas aid is made, arguing it can help overcome savings gaps, support infrastructure investment and human capital development, and potentially increase growth rates in recipient countries.
The document discusses the price mechanism and how it allocates scarce resources through market forces. It describes the price mechanism's rationing, signaling, and incentive functions. When supply and demand change, prices adjust to clear the market and encourage production changes. The price mechanism works efficiently when certain conditions are met, but market failures can occur when these conditions are not met, such as with externalities or imperfect information. The document outlines how markets can allocate resources efficiently but also how government intervention may be needed to address market failures.
Government intervention aims to address market failures, but it risks creating government failures that exacerbate or introduce new inefficiencies. Government failure can occur when policies are ineffective, have unintended consequences, or do not provide value for money. It may stem from political self-interest, short-term thinking, regulatory capture by lobby groups, or by distorting incentives. While public goods can benefit from economies of scale, government projects often overrun costs and do not meet targets.
The document discusses the economics of a proposed £7 national minimum wage in the UK. It provides background on low pay in the UK labour market, including median earnings by occupation and the impact of the existing national minimum wage. Both the potential benefits and costs of increasing the minimum wage are considered, such as incentivizing work, reducing the need for benefits, and boosting spending, as well as the risk of higher costs reducing competitiveness. The conclusion is that while a higher minimum wage may have some risks, there is little evidence it would cause unemployment, and the benefits justify increasing it above inflation and benefit levels.
This is a revision presentation on aspects of the privatisation of the Royal Mail - an important milestone in the history of privatisation in the UK economy.
The cost of renting property in many parts of the UK continues to rise - would rent controls make any difference? A Unit 1 economics revision presentation.
The document provides information about an economics revision workshop, including sessions on how markets work and elasticities, market failure and government intervention, measuring UK economic performance, demand and supply side policies, and policy conflicts. It gives exam advice on answering questions and provides a glossary of key macroeconomic terms.
This document discusses various measures used to assess national income, living standards, and economic well-being. It explains that gross national income (GNI) per capita is a baseline measure but has limitations. Other indicators discussed include the human development index, index of sustainable economic welfare, Gini coefficient for inequality, and quality of life indicators. The document examines factors like remittances, purchasing power adjustments, and difficulties in accurately measuring concepts like standard of living.
AS Macro: Introduction to Economic Developmenttutor2u
This document provides an introduction to economic development. It defines economic development as improving human freedoms and reducing poverty, inequality, and unemployment. The key goals of economic development are outlined in the Millennium Development Goals and are measured by indicators such as the Human Development Index which considers education, life expectancy, and income. However, the HDI has limitations as it does not account for other important factors like political freedoms, income distribution, or qualitative changes over time. Common characteristics of lower income countries are also presented such as lower productivity and incomes as well as higher inequality, which can lead to social and economic costs if left unaddressed.
This is an updated version of a slideshow revision presentation on the way in which different charts are presented in economics exams and some tips for handling the data in your answers.
UK Economy in 2015 - Macro Revision PresentationEton College
The document summarizes the performance of the UK economy. It notes that while GDP has recovered since the recession, GDP per capita remains below pre-recession levels. Unemployment has fallen but youth unemployment remains high. Inflation fell to 0% in early 2015 due to lower food and fuel prices. The budget deficit has declined but remains over 5% of GDP, and the national debt is high at 79% of GDP. The trade deficit is growing, reflecting a lack of competitiveness, while the current account deficit was the largest in over 20 years in 2014.
AS Macro Question - Falling UnemploymentEton College
This is a revision resource for students taking the EdExcel unit 2 economics paper - suggesting a way of approaching the 30 mark question and scoring high marks for evaluation.
This document provides tips for writing high-quality exam answers to reach the top grades. It advises answering the question, including better paragraph structure with depth and a logical chain of arguments. It also cautions considering the effect of an answer and focusing on a small number of well-developed points rather than scattergun or bullet point approaches. Students are encouraged to get help from teachers, tutors and fellow students on social media.
Here are the key points that could be made in evaluating the argument for solar subsidies:
- Subsidies distort the free market and may be an inefficient use of taxpayer money if they artificially promote an industry that is not yet competitive. However, supporting emerging technologies like solar can have benefits if it accelerates cost reductions over time.
- While subsidies create jobs in solar installation, they may also negatively impact jobs in other energy sectors. There are opportunity costs to public funds that could be better spent elsewhere.
- Targeting subsidies only to lower-income households could help address the concern that richer households benefit disproportionately. Means-testing subsidies could maximize the social benefits.
- Improving consumer protections against mis-selling and
The document discusses various types of government intervention in markets, including taxes, subsidies, price controls, and regulation. It also examines how buffer stock schemes can help stabilize prices by buying excess supply when prices fall and releasing stock when prices rise. The effects of taxes and subsidies on producer and consumer surplus are analyzed using supply and demand diagrams. Subsidies are more likely to lower prices when demand is price elastic.
The document discusses the welfare effects of taxes and subsidies on goods. It shows how a tax increases the price consumers pay and decreases the price suppliers receive, with tax revenue collected by the government. Consumers bear more of the tax burden when demand is inelastic. A subsidy decreases the price paid by consumers and increases the price received by suppliers, with the government providing subsidy payments. When demand is elastic, a subsidy leads to a large rise in the quantity demanded of the good.
A2 Macro - Growth Development and Global Economytutor2u
This document provides an overview of globalization and the global economy. It discusses factors driving globalization like technological advances, declining transportation costs, and liberalized financial markets. It also examines the shifting center of global economic influence from Western nations to East Asia. The document outlines benefits of globalization like increased trade and specialization, as well as risks like rising inequality and macroeconomic instability. It also profiles sovereign wealth funds and their growing investments in companies around the world.
This document discusses how imperfect information can lead to market failure through the concepts of merit and demerit goods. It explains that merit goods have undervalued private benefits due to information failure, leading to underconsumption. Examples include education and healthcare. Demerit goods like cigarettes have overvalued private benefits due to imperfect information, resulting in overconsumption. Both can cause market failure since consumption levels do not reflect true social costs and benefits when private estimates are inaccurate. Governments may intervene to address underconsumption of merit goods and overconsumption of demerit goods.
This document discusses monopoly power in markets. It defines a pure monopolist as a single supplier that dominates an entire market with 100% concentration. In reality, a working monopoly is deemed to be any firm with over 25% market share, while a dominant firm has at least 40% share. Monopolies can lead to higher prices and lower output compared to competitive markets. However, monopoly power also allows firms to invest profits into research and development. There are economic arguments both for and against monopolies, and intervention may or may not be effective depending on the specific market.
This presentation covers some aspects of topical issues in trade and economic development. Designed for A2 economics students - links to some Financial Times videos with special reference to the work of Hidalgo and Hausmann and their index of economic complexity
This document discusses different types of development aid and financial flows to developing countries. It outlines various types of bilateral, multilateral, and humanitarian aid, as well as different private capital flows including foreign direct investment, remittances, and loans. Key statistics presented include total official development aid of $128 billion in 2010 compared to $1042 billion in private flows, with over half of private flows from foreign direct investment and remittances. The case for overseas aid is made, arguing it can help overcome savings gaps, support infrastructure investment and human capital development, and potentially increase growth rates in recipient countries.
The document discusses the price mechanism and how it allocates scarce resources through market forces. It describes the price mechanism's rationing, signaling, and incentive functions. When supply and demand change, prices adjust to clear the market and encourage production changes. The price mechanism works efficiently when certain conditions are met, but market failures can occur when these conditions are not met, such as with externalities or imperfect information. The document outlines how markets can allocate resources efficiently but also how government intervention may be needed to address market failures.
Government intervention aims to address market failures, but it risks creating government failures that exacerbate or introduce new inefficiencies. Government failure can occur when policies are ineffective, have unintended consequences, or do not provide value for money. It may stem from political self-interest, short-term thinking, regulatory capture by lobby groups, or by distorting incentives. While public goods can benefit from economies of scale, government projects often overrun costs and do not meet targets.
The document discusses the economics of a proposed £7 national minimum wage in the UK. It provides background on low pay in the UK labour market, including median earnings by occupation and the impact of the existing national minimum wage. Both the potential benefits and costs of increasing the minimum wage are considered, such as incentivizing work, reducing the need for benefits, and boosting spending, as well as the risk of higher costs reducing competitiveness. The conclusion is that while a higher minimum wage may have some risks, there is little evidence it would cause unemployment, and the benefits justify increasing it above inflation and benefit levels.
This is a revision presentation on aspects of the privatisation of the Royal Mail - an important milestone in the history of privatisation in the UK economy.
The cost of renting property in many parts of the UK continues to rise - would rent controls make any difference? A Unit 1 economics revision presentation.
The document provides information about an economics revision workshop, including sessions on how markets work and elasticities, market failure and government intervention, measuring UK economic performance, demand and supply side policies, and policy conflicts. It gives exam advice on answering questions and provides a glossary of key macroeconomic terms.
This document discusses various measures used to assess national income, living standards, and economic well-being. It explains that gross national income (GNI) per capita is a baseline measure but has limitations. Other indicators discussed include the human development index, index of sustainable economic welfare, Gini coefficient for inequality, and quality of life indicators. The document examines factors like remittances, purchasing power adjustments, and difficulties in accurately measuring concepts like standard of living.
AS Macro: Introduction to Economic Developmenttutor2u
This document provides an introduction to economic development. It defines economic development as improving human freedoms and reducing poverty, inequality, and unemployment. The key goals of economic development are outlined in the Millennium Development Goals and are measured by indicators such as the Human Development Index which considers education, life expectancy, and income. However, the HDI has limitations as it does not account for other important factors like political freedoms, income distribution, or qualitative changes over time. Common characteristics of lower income countries are also presented such as lower productivity and incomes as well as higher inequality, which can lead to social and economic costs if left unaddressed.
This is an updated version of a slideshow revision presentation on the way in which different charts are presented in economics exams and some tips for handling the data in your answers.
UK Economy in 2015 - Macro Revision PresentationEton College
The document summarizes the performance of the UK economy. It notes that while GDP has recovered since the recession, GDP per capita remains below pre-recession levels. Unemployment has fallen but youth unemployment remains high. Inflation fell to 0% in early 2015 due to lower food and fuel prices. The budget deficit has declined but remains over 5% of GDP, and the national debt is high at 79% of GDP. The trade deficit is growing, reflecting a lack of competitiveness, while the current account deficit was the largest in over 20 years in 2014.
AS Macro Question - Falling UnemploymentEton College
This is a revision resource for students taking the EdExcel unit 2 economics paper - suggesting a way of approaching the 30 mark question and scoring high marks for evaluation.
The UK government privatized Royal Mail in 2013 by floating the company on the stock exchange. This allowed retail investors to purchase shares and raised £1.98 billion for the government. Royal Mail employees were given 10% of shares. While privatization provided funds and shareholder incentives, critics argue it was sold too cheaply and will cost jobs. Royal Mail faces challenges from competition and new technologies but must still provide universal postal service.
Europe’s largest construction project
Crossrail will increase London's rail capacity by 10%
Crossrail route will run >100km from Reading and Heathrow in the west to Shenfield and Abbey Wood in the east.
40 Crossrail stations including 10 new stations
Crossrail will bring an extra 1.5 million people to within 45 minutes of central London
Total funding available to deliver Crossrail is £14.8bn
Costs outside the £14.8 billion funding package include the estimated £1 billion cost of buying trains, the majority of which will be funded directly by Transport for London
Economics of Crossrail (Microeconomics)Eton College
Europe’s largest construction project
Crossrail will increase London's rail capacity by 10%
Crossrail route will run >100km from Reading and Heathrow in the west to Shenfield and Abbey Wood in the east.
40 Crossrail stations including 10 new stations
Crossrail will bring an extra 1.5 million people to within 45 minutes of central London
Total funding available to deliver Crossrail is £14.8bn
Costs outside the £14.8 billion funding package include the estimated £1 billion cost of buying trains, the majority of which will be funded directly by Transport for London
The document discusses supply-side competitiveness and growth in the UK economy. It identifies several key supply-side challenges facing the UK, including a persistent productivity gap, high youth unemployment, low investment and research spending. It also discusses some potential policies to boost long-run supply-side growth, such as improving labour supply and mobility through immigration, investing in skills and training to boost productivity, and improving infrastructure to reduce bottlenecks. The effectiveness of these policies depends on overcoming challenges such as political opposition, significant costs, and long timeframes to see results.
AS Macro Supply Side and CompetitivenessEton College
The document discusses supply-side policies to boost long-term economic growth in the UK. It identifies key supply-side challenges facing the UK economy, including low productivity, regional economic divides, and low investment. It then analyzes three policy options to address these challenges: 1) increasing labor supply through immigration or higher participation rates, 2) improving labor mobility through housing and transport reforms, and 3) boosting innovation and enterprise through tax incentives. Each option is evaluated in terms of potential limitations or political difficulties. The document emphasizes that supply-side reforms require long-term commitments to overcome challenges.
Ed Conway Presentation to Tutor2u ETNC 2013Eton College
This document summarizes an economics teacher conference that discusses the state of the UK and global economies following the 2008 financial crisis. It notes that the recession in the UK was unusually long compared to previous downturns. It also discusses the effects of fiscal conservatism and monetary activism in the UK, as well as issues like declining real incomes, housing prices, and lack of global trade rebalancing.
Linda Yueh on prospects for the Chinese economyEton College
The document discusses China's impressive economic growth and the challenges it faces in becoming a high-income country. It notes that China's growth has been driven primarily by factor accumulation like capital and labor, as well as increasing total factor productivity. However, China now needs to transition to innovation-driven growth and rebalance its economy away from exports and investment towards domestic consumption. It also needs to address distortions from state-owned enterprises and continue reforms to support sustainable growth over the next 30 years.
Tim Harford on Bill Phillips and the Water MachineEton College
This document appears to be a listing of dates, captions, and a Twitter handle but does not contain any substantial information to summarize in 3 sentences or less. The dates and captions provided do not give enough context on their own to form a meaningful summary.
The document provides definitions for various macroeconomic key terms:
- AAA credit rating refers to the best credit rating given to bonds, indicating negligible risk of default.
- Aggregate supply shocks reduce output and can increase inflation by affecting potential output or causing inflation.
- Austerity aims to reduce government deficits through tax increases and/or spending cuts.
- Bank runs occur when depositors lose confidence and withdraw funds due to fears the bank may collapse.
- Bond markets allow governments and firms to raise money through issuing new debt.
- The BRIC economies refer to the rising emerging markets of Brazil, Russia, India, and China.
- Bubbles occur when asset prices
AS Micro Markets and Market Failure Key Term GlossaryEton College
This document defines key terms related to micro markets and market failure, including:
- Ability to pay, absolute poverty, adverse selection, allocative efficiency, asymmetric information, barriers to entry, black markets, bottlenecks, and budget constraints.
- Deadweight loss, demand, derived demand, diminishing returns, effective demand, elasticity, externalities, factors of production, and government failure.
- Market structures like monopoly, oligopoly and perfect competition. It also defines market failures like public goods, externalities, and information asymmetry.
Economic Development and Growth GlossaryEton College
The document provides definitions for various economic development and growth terms. It includes definitions such as:
- AAA Credit Rating refers to the best credit rating given to corporate bonds, indicating negligible risk of default.
- Absolute poverty refers to those without adequate nutrition, shelter, or clothing to survive, as defined by the World Bank.
- Accelerator effect links planned capital investment positively to past and expected consumer demand growth.
- Several other terms are also defined such as accession countries, accommodatory policy, adjusted net savings, advanced economies, and age dependency ratio.
The document provides definitions for various business economics concepts in a glossary format. It defines key terms related to market structures, costs, pricing strategies, mergers and acquisitions, competition, and other foundational concepts in business economics. Some key terms defined include monopoly, oligopoly, economies of scale, marginal cost, price discrimination, and mergers and acquisitions.
1. Economies of scale can benefit both firms and consumers through lower average costs and prices.
2. Internal economies of scale reduce a firm's long-run average costs through increased production, allowing higher profits. External economies reduce costs for most businesses in a growing industry.
3. Consumers benefit from economies of scale through lower prices and increased consumer surplus as firms pass on some cost savings in more competitive markets.
This document provides an overview of key concepts from behavioural economics. It discusses:
1) How traditional economic models assume humans are rational actors who make utility-maximizing decisions, while behavioral economics recognizes humans have biases that influence decisions.
2) Various psychological factors ("messengers") that influence human behavior, including incentives, social norms, defaults, priming, and affect/emotions.
3) Specific cognitive biases and heuristics that shape decisions, such as loss aversion, availability heuristic, and status quo bias.
4) How understanding these behavioral influences can help design "nudges" to encourage healthier, safer, or more beneficial choices.
The document discusses market power and pricing strategies in the smartphone industry, noting that average smartphone selling prices are expected to fall 9% in 2013 due to intense competition between manufacturers as well as emerging markets and substitute devices. It also explores concepts of economies of scale that can lower costs and prices for consumers as smartphone production increases.
Micro Finance Fair Trade and DevelopmentEton College
Microfinance aims to provide financial services to the poor and extreme poor, including microloans, savings, insurance, and remittances. It aims to reduce poverty through financial inclusion and empowerment. Professor Muhammad Yunus founded Grameen Bank in Bangladesh, which pioneered microcredit and saw rapid early growth. However, microfinance also faces criticisms like over-indebtedness, limited poverty reduction, and reliance on subsidies. Fair trade aims to promote equitable trading conditions for marginalized producers and workers through minimum prices, social premiums, and standards. However, it remains a small niche and critics argue it is not a long-term development solution on its own.
This document provides information on different types of financial flows to developing countries, including foreign aid, remittances, foreign direct investment, and loans. It discusses the scale of these flows, noting that in 2010 private flows such as FDI made up 89.1% of total official and private flows, compared to 10.9% for official development aid. The document also outlines different types of foreign aid and perspectives on the impact and effectiveness of aid, including debates around whether aid fosters long-term growth and self-sufficiency or dependence.
4. Renting has become more expensive
Region Average Rent (Sept
2012, £s per week)
London £1,092
South West £638
Yorkshire £542
North West £594
Wales £556
South East £776
England and Wales £741
5. Maximum rents – rising demand
Rent per Rental Market with a Maximum Rent
With the help of an appropriate
month (£)
diagram show how the
introduction
Supply 1 of a maximum rent might affect
the market for rental properties
P1 1. Define a maximum rent
2. Explain where a maximum
price must be to change the
free-market equilibrium price
3. Use a clear supply and
Demand 1
demand diagram to help
4. Include some evaluation
O Q1
Quantity of rented property
6. Maximum rents – rising demand
Rent per Rental Market with a Maximum Rent
month (£)
With the help of an appropriate
diagram show how the
Supply 1
introduction
of a maximum rent might affect
the market for rental properties
P1
1. Max rent is a price ceiling
ceiling
2. Must be set below normal
P2
free market equilibrium
Demand 1 3. In diagram – set at rent P2
O Q1
Quantity of rented property
7. Maximum rents – rising demand
Rent per Rental Market with a Maximum Rent
With the help of an appropriate
month (£)
diagram show how the
introduction
Supply 1 of a maximum rent might affect
the market for rental properties
P1 1. Max rent is a price ceiling
2. Must be set below normal
ceiling free market equilibrium
P2 3. In diagram – set at rent P2
4. P2 (ceteris paribus) creates an
Demand 1
excess demand or shortage =
Q3-Q2
O Q3 Q1 Q2
Quantity of rented property
8. Maximum rents – rising demand
Rent per Rental Market with a Maximum Rent With the help of an appropriate
month (£) diagram show how the
introduction
of a maximum rent might affect
Supply 1
P3 the market for rental properties
1. Max rent is a price ceiling
P1
2. Must be set below normal
free market equilibrium
ceiling
3. In diagram – set at rent P2
P2
4. P2 (ceteris paribus) creates an
Demand 1 excess demand or shortage =
Q3-Q2
5. Shortage may lead to a
shadow market developing –
O Q3 Q1 Q2 some people willing to pay P3
Quantity of rented property
9. Maximum rents – rising demand
Rent per Rental Market with a Maximum Rent With the help of an appropriate
month (£) diagram show how the
introduction
of a maximum rent might affect
Supply 1
P3 the market for rental properties
P1
Evaluating possible effects on
market for rental properties
ceiling
1. Extent of contraction in rental
P2
housing supply is uncertain
Demand 1 2. Will there be a long run
decline in supply?
3. Possible reduction in quality
of rental housing available
Q3 Q1 Q2 4. How will max rent respond to
Quantity of rented property
shifts in demand?
10. Evaluate the case for and the case against the
introduction of maximum rents in the market for
rented properties in the UK
11. Evaluate the case for and the case against the
introduction of maximum rents in the market for
rented properties in the UK
Bigger picture – long term shortage of available rented property
Efficiency – does a price ceiling improve the market outcome?
Equality – is a max rent equitable - helping those in most need?
Scope – how low would the ceiling be? National? Regional?
Time – long term effects of holding down market rents
Effectiveness – unintended consequences? Better alternatives?
Prioritise arguments – what is your main argument and why?
Scale – Significance – wider importance of the rented sector
13. Improving rented housing supply
Relaxation
of planning Incentives
controls for building
innovation
Tax
incentives Release of Build more
for “build surplus social
to rent” land housing