Category: Essentials of Economics 9e
Cement may be quietly emerging as one of the biggest obstacles to lowering carbon emissions to reduce the extent of global warming. The cement industry rarely features in media analysis of the ‘worst polluters’, but in fact the industry is responsible, because of the high energy requirements of manufacture, for more than 5% of carbon dioxide emissions. A building boom globally has fuelled demand for the material. Concrete is the second most used product on the planet, after water, so what can be done to reduce the impact of the industry on the environment?
The unheralded polluter: cement industry comes clean on its impact Guardian (12/10/07)
Questions
| 1. |
With reference to the article, identify the main external costs resulting from the production of cement. |
| 2. |
Discuss the view expressed by Dimitri Paplexopoulos, managing director of Titan Cement that “.. [c]ement is needed to satisfy basic human needs, and there is no obvious substitute, so there is a trade-off between development and sustainability“. |
| 3. |
Discuss policies that governments could adopt to try to move the market for cement towards a more socially optimal level of production. |
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“. |