Category: Essential Economics for Business: Ch 01
The start of a new year is a time that many of us make New Year Resolutions. Generally we have broken these before then end of January, but a new web site called Stickk.com aims to helps us keep the resolutions. Can economics help us rationalise the process of making resolutions? In the article below Tim Harford (the Undercover Economist) looks at incentives and what economics can tell us about New Year Resolutions.
Rationalising resolutions MSN Slate (22/12/07)
Questions
1. |
Assess the importance of incentives in determining people’s economic behaviour. |
2. |
How does the analysis of ‘rational behaviour’ help us understand the economic choices people make? |
3. |
Discuss the likely success of the business model developed by Stickk.com. |
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. |
President Hugo Chavez of Venezuela has built up the pace of turning Venezuela into a socialist state with sweeping reforms, including extensive nationalisation. This has always been a controversial policy (not least with the private companies which will be taken into state ownership) and threatens to create further social tension in Venezuela.
Nationalisation sweeps Venezuela BBC News Online (15/5/07)
Questions |
1. |
What are the economic implications of the creation of a ‘socialist state’? |
2. |
Many of the poorest in Venezuela do not have full access to key services such as telecoms. Assess the extent to which nationalisation will help extend the reach of these services to all groups in society. |
3. |
Discuss the arguments for and against bringing key industries into state ownership. |
Adam Smith is the face on the new £20 note. This could be used as an argument that economics has moved into the mainstream, but many people may not be aware of the influence that he has had on modern classical economics. The articles below may help reveal his ongoing economic influence.
What you should know about Adam Smith BBC News Online (13/03/07)
Why Brown reveres the man on the new £20 note Guardian (19/03/06)
Questions
1. |
Assess the impact of Adam Smith on classical economic theory. |
2. |
Summarise the main works and theories of Adam Smith. (You may find the information in the Biz/ed Virtual Economy on Adam Smith helpful. For a complete list of works of Adam Smith, many online, see website C18 in the hotlinks section of this site.) |
3. |
Discuss the extent to which Gordon Brown has been influenced by Adam Smith in his policies. |
Recent economic history has led many commentators to believe that a free-market capitalist economy is the only efficient method of allocating resources. The transition of former Eastern Bloc economies has furthered this perception. In the article from the Guardian linked below, Andrew Murray considers this argument and argues that capitalism may not be the be all and end all of economic organisation.
No, capitalism is not the only way to order human affairs Guardian (8/3/07)
Questions
1. |
Discuss the arguments for and against using a free-market economy as the principal method of resource allocation. |
2. |
Assess the principal reasons for the transition of planned economies to market economies over the past two decades. |
3. |
Examine the validity of the arguments raised by Andrew Murray in his article. |