Category: Economics 10e: Ch 24

A significant illegal trade in ‘e-waste’ has developed with thousands of discarded computers arriving every day in the ports of West Africa. Once there, children are often used to dismantle them and extract metals . However, this has resulted in huge toxic dumps and serious health problems for resident in the surrounding area.

Breeding toxins from dead PCs Guardian (6/5/08)

Questions

1. Identify the principal external costs resulting from this illegal trade in e-waste.
2. Using diagrams as appropriate, show the impact of this market failure on the market for new computers.
3. Evaluate two policies that the international community could adopt to reduce this illegal trade in e-waste.

Given the interdependence of the global economy, the economic slowdown in the West is likely to have worldwide knock-on effects. How serious will these effects be for the emerging economies of South East Asia? The following articles consider this question.

The decoupling debate The Economist (6/3/08)
Can Asia escape the effects of the downturn in the West? Times Online (17/3/08)
Just enough power to save themselves Times Online (25/3/08)

Questions

1. Explain the term emerging economy.
2. Discuss the extent to which the economic performance of the emerging economies will help reduce the likelihood of recession in the UK.
3. Discuss the extent to which the economic performance of the emerging economies is likely to be affected by recession in the USA.

Large areas of land in the former Soviet Union and Eastern Europe are lying uncultivated due to export barriers and tariffs. Given the recent rapid rise in food prices, this fallow land (estimated to be around 23 million hectares) could help to reduce upward pressure on food prices.

Bread basket that is left to grow weeds Times Online (12/3/08)

Questions

1. Identify three different forms of protectionism.
2. Explain why the land identified in the article has remained uncultivated.
3. Discuss the arguments for and against these countries reducing tariffs on food.

Rapidly rising food prices have led to instability in many countries and have fuelled inflation in less developed economies where food spending is a greater proportion of overall consumer spending. A number of factors have contributed to this rapid rise in prices, but one important contributory factor is the move towards growing crops that can be used as bio-fuels in the developing world and this shift in production is having a knock-on effect in world food markets.

Big food companies accused of risking climate catastrophe Guardian (8/11/07)
An agricultural crime against humanity Monbiot.com (6/11/07)
Global food crisis looms as climate change and fuel shortages bite Guardian (3/11/07)

Questions

1. Identify the main factors that have led to rising world food prices.
2. Assess the extent to which the move towards bio-fuels has contributed to the rise in world food prices.
3. Explain how the impact of rising food prices differs in the developed and developing world.
4. Discuss policies that governments could adopt to ameliorate the impact of rising food prices on the level of economic growth.

In the article below, Irwin Stelzer argues that Congress has adopted a more protectionist stance towards trade policy. Not all would, however, agree. Why not have a look at the comments after the article to see some of the discussion that has taken place about the article?

The end of free trade as we know it Times Online (20/5/07)


Questions
1. Assess the extent to which the new trade agreements under discussion are likely to improve the position of workers globally.
2. Analyse two policies that the US administration could put in place to reduce the level or protectionism.
3. Discuss the extent to which the new trade agreements referred to in the article will represent a more protectionist approach to trade.