Category: Economics for Business 9e
The kibbutzes in Israel have always been renowned as a system where everything is evenly shared. However, with the news that Israel’s oldest Kibbutz has agreed to essentially privatise itself and start paying people according to ability, it seems that the reach of capitalism and the market system is now almost total. What alternative systems are left to organise and allocate resources? With most forms of socialist organisation more or less discredited as an efficient way of allocating resources, it seems that globalised capitalism is all that is left. However, in the article from the Guardian below Timothy Garton Ash argues that capitalism may, by its very nature destroy itself.
Global capitalism now has no serious rivals. But it could destroy itself Guardian (22/2/07)
Israel’s oldest Kibbutz votes for privatisation Guardian (20/2/07)
Questions
| 1. |
Describe the changes that have taken place in the system used to allocate resources in the Degania kibbutz. |
| 2. |
Assess the reasons why the Degania kibbutz has decided to pay members according to ability. |
| 3. |
Discuss the validity of Timothy Garton Ash’s argument that global capitalism is in danger of destroying itself. |
The death of cash has long been forecast, but not yet happened, but is it the case that the next generation technology may finally sound the death knell? With the advent of prepaid cards (e.g. Oyster card in London), payment by mobiles and the continuing growth of ‘plastic’, it may be that cash is on an inexorable downward slide. The articles below look at a range of issues around the possible death of cash (and the introduction of the £20 note with Adam Smith on it).
Why I hate sticky electrons BBC News Online – Robert Peston Blog (19/2/07)
Cash used to be king, but now we pay for paying up Telegraph (9/2/07)
March launch for Smith £20 note BBC News Online (21/2/07)
A cash call The Economist (subscription) (15/2/07)
Questions
| 1. |
Explain the main functions that any form of money has to fulfil. |
| 2. |
Assess the extent to which smartcards (like the Oyster card) can fulfil these functions of money. |
| 3. |
Discuss the implications for the level of consumer spending of increased use of cash substitutes. |
A recent report from the Office of Fair Trading has argued that the NHS may be paying up to £500m too much for branded medicines for drugs companies and has recommended reforms to the system. The Pharmaceutical Price Regulation Scheme (PPRS) sets a cap on the profits that any drug company can earn on branded medicines from the NHS and the OFT is recommending changes to the system. They argued that there are “a number of drugs where prices are significantly out of line with patient benefits”.
NHS ‘spending £500m a year too much on drugs’ Guardian (20/2/07)
NHS paying too much for drugs BBC News Online (20/2/07)
Drugs giants to be told to ‘cut prices for NHS’ Times Online (20/2/07)
NHS ‘overspending by millions’ on drugs Telegraph (20/2/07)
Drugs price fixing scheme costs health service millions, says OFT Guardian (20/2/07)
Drugs buddies Guardian – comment is free blog (20/2/07)
Prescribing prices BBC News Online – Robert Peston blog (20/2/07)
Questions
| 1. |
Explain the way in which prices for branded drugs are determined. |
| 2. |
Assess the extent to which the PPRS represents a price-fixing scheme. |
| 3. |
Discuss the policies that the government could put in place to implement the OFT recommendations. |
Have you ever had a drink or packet of peanuts from a hotel minibar and then regretted being tempted when you saw the price on checkout? If things like minibars and internet access are so over-priced in hotels, then how can they get away with it? Why do people pay these amounts and what can economics tell us about this pricing behaviour?
Minibar economics MSN Slate (17/2/07)
Questions
| 1. |
Explain the reasoning behind hotel pricing strategies for rooms and minibars. |
| 2. |
Discuss the impact of competition on hotel pricing strategies for rooms and extras like minibars and internet access. |
| 3. |
Examine the reasons why more companies do not do “advertising campaigns boasting about their what-you-see-is-what-you-get pricing”. |
Did you buy red roses for Valentine’s Day? If so – where did they come from? Africa or Europe? You may have taken a conscious environmental decision to buy from European sources as the flowers do not have to travel so far and therefore involve fewer air miles, but according to International Development Secretary, Hilary Benn, this may be mistaken and it may be ‘greener’ to buy red from Africa.
Buy African flowers – UK Minister BBC News Online (13/2/07)
Buy African flowers for Valentine’s Day, minister says Guardian (13/2/07)
Questions
| 1. |
Compare and contrast the social costs and social benefits (including both private and external costs) of buying red roses produced in Europe and those produced in Africa. |
| 2. |
Assess which are the most environmentally beneficial presents to give on Valentine’s Day. Give reasons to justify your answer. |
| 3. |
Evaluate two policy options available to the government to reduce the environmental impact of Valentine’s Day. |