Category: Economics: Ch 04

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What Al Gore doesn’t understand about climate change

Al Gore’s contribution to the global climate change debate is not in question and he has, along with the IPCC, been awarded the 2007 Nobel Peace Prize for his work in raising awareness. If you haven’t seen his film “An inconvenient truth” then do get hold of the DVD – it may just be the most interesting PowerPoint presentation you will ever see! However, does he really understand the nature of the debate? The article below suggests that he has not yet taken account of the most fundamental trade-off in dealing with climate change – the trade-off between our own quality of life and that of our descendants in the future.

Save the earth in six hard questions MSN Slate (22/10/07)

Questions

1. Explain what is mean by a trade-off “between the quality of our own lives and the quality of our descendants’ [lives]”.
2. What is meant by the term ‘risk-averse’ and how is this relevant in the climate change debate?
3. Consider the questions raised by the article. Discuss how relevant the conclusion reached is in the light of these questions.
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Parents priced out of independent schools?

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.