Category: Economics: Ch 12
Having secured the 2012 Olympics, we now have to work out how to pay for it. Recent news has indicated that the cost of hosting the Olympics has risen significantly from the original estimate. However, there is considerable debate in the media about what the real cost is. The figures given are massive, but what will we be left with after the games are over? How can we value these assets? The blog below from Evan Davis looks at some of these issues and discusses the real cost of hosting the Olympics.
Why do costs overrun? BBC News Online (16/3/07)
Real cost of 2012? BBC News Online – Evan Davis blog (15/3/07)
Questions
| 1. |
Identify five fixed and five variable costs of running the Olympics. |
| 2. |
Discuss the value of the opportunity cost of hosting the Olympics. |
| 3. |
List the direct and indirect benefits of hosting the 2012 Olympics in London. |
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. |