Category: Economics for Business 9e
The rapid growth in the use of overseas and agency staff for many lower paid jobs has been a contentious issue for many in the trade union movement. Unions have demanded the same rights for agency staff as for permanent staff, but the government is reluctant to do this, arguing that the use of agency staff encourages flexibility in the workforce.
Underpaid, easy to sack: UK’s second class workforce Guardian (24/9/07)
Questions
| 1. |
Explain the impact that the use of agency staff has on the supply curve for labour. (N.B. You should consider both the position and shape of the curve in your answer.) |
| 2. |
Discuss the government’s view that “the flexibility provided by agency workers has been a vital part of Britain’s economic success“. |
| 3. |
Discuss the impact on the UK labour market of giving agency staff the same employment rights as permanent staff. |
Independent school fees have generally risen faster than inflation and a relatively inelastic value of the price elasticity of demand seems to have led to their revenues increasing. Demand has stayed high despite the above-inflation fee increases. However, a recent report suggests that fees have risen relative to average earnings and that independent schools have become less affordable. This may, the report argues, make some schools relatively more vulnerable to a fall in the number of places demanded.
Public school fees ‘risk pricing parents out’ Guardian (18/9/2007)
Questions
| 1. |
Identify the main factors affecting the value of the price elasticity of demand for places at independent schools. |
| 2. |
Discuss the extent to which the value of the price elasticity of demand for places at independent schools is likely to change as fees increase relative to average earnings. |
| 3. |
Assess the extent to which competition in the market for independent schools affects the level of fees (the market price) and the value of the price elasticity of demand for places. |
A report from Cycling England has suggested that a £70m investment in cycling each year could save the government £520m per year. The savings result from the positive benefits of increased cycling – lower carbon dioxide emissions and lower NHS costs as we become healthier. But, do the numbers add up?
Investment in cycling could save £520m, government told Guardian (17/9/07)
Questions
| 1. |
Define the terms (i) external benefits (ii) external costs and (iii) marginal social benefit. |
| 2. |
Identify three external benefits that result from increased cycling. |
| 3. |
Using diagrams as appropriate, show how the market equilibrium and the socially optimum level of cycling will differ. |
| 4. |
Discuss policies that the government could adopt to move the market closer to the social optimum. |
The article linked below is a blog article by George Monbiot looking at the rise of neoliberal economic views and discussing whether these are simply an intellectual justification for the rich and powerful to reinforce their position.
How the neoliberals stitched up the wealth of nations for themselves Guardian (Comment is free) (28/8/07)
Questions
| 1. |
Write a brief summary of the neoliberal views of the founder of the Mont Pelerin Society – Friedrich Hayek. |
| 2. |
Explain the neoliberal argument that “….. we are best served by maximum market freedom and minimum intervention by the state. The role of government should be confined to creating and defending markets, protecting private property and defending the realm.“ |
| 3. |
Discuss the view espoused by George Monbiot in the article that neoliberal policies like “minimal taxes, the dismantling of public services and social security, deregulation, the breaking of the unions” serve to make the elite even richer and simply act as a “wealth grab“. |
Do you know what the current rate of economic growth is? Probably not. In the article below Larry Elliott argues that this may indicate that the link between economic growth and happiness has been broken and that alternative measures of GDP may be more helpful in analysing the performance of the economy.
Cameron should count on happiness Guardian (27/8/07)
Questions
| 1. |
Explain what is meant by the term ‘Index of sustainable economic welfare’. |
| 2. |
Examine three factors that may raise economic welfare that are not included in a conventional measure of GDP. |
| 3. |
Use the Friends of the Earth make your own ISEW site to analyse the factors that may contribute the most to economic welfare. Discuss the arguments for and against the introduction of an ISEW as an official government measure of economic welfare. |