Category: Essentials of Economics 9e
Dutch brewers including Heineken and Grolsch have been fined a total of nearly £185m between them for stifling competition and sharing price information with the intention of fixing prices. This cartel was discovered by EU investigators and the fine has been imposed by the EU competition commission.
Dutch brewers fined over cartel BBC News Online (18/4/07)
Beer makers fined in Dutch price probe Business Week (18/4/07)
EU fines Heineken for fixing beer prices Business Week (18/4/07)
Heineken and Grolsch fined for price-fixing Guardian (18/4/07)
Heineken fined 219m euro for fixing beer prices Times Online (18/4/07)
Questions
| 1. |
Explain the conditions required for a cartel to develop. |
| 2. |
Explain the methods used by the brewing firms to fix prices in the beer market. |
| 3. |
Evaluate two policies that could be used by the EU competition commission to try to prevent cartels reemerging in the future in the brewing industry. |
In what is being heralded as a historic deal, the EU has reached agreement with the USA on what is termed an ‘open skies’ deal. This will allow EU-based airlines to fly from anywhere in Europe to anywhere in the USA and US carriers can operate to any European destination. So what will this deal mean for travellers, the environment and the airlines. The articles below look at the issues and also at the detail of the agreement, which still maintains many of the previous limitations on airlines and their ownership.
EU backing for ‘open skies’ deal BBC News Online (22/3/07)
Q&A: Open skies BBC News Online (22/3/07)
EU agrees open skies deal Guardian (22/3/07)
Open skies: Q&A Guardian (22/3/07)
Transatlantic fares set to tumble after ‘open skies’ deal Times Online(22/3/07)
Questions
| 1. |
What criteria should be used to assess the success of the ‘open skies’ deal? |
| 2. |
Assess the extent to which the ‘open skies’ deal will increase the level of competition in the transatlantic market for air travel. |
| 3. |
Discuss the options available to the EU to increase competition further in the market for air travel. |
Many new regional trade agreements (RTAs) and bilateral trade agreements have been signed in recent years. In a report – Signing away the future – Oxfam has argued that these trade agreements may often significantly disadvantage the poorer developing countries. The links below give access to the briefing paper and some FAQs about these agreements.
Oxfam slams bilateral trade deals BBC News Online(20/3/07)
The state of world trade – Oxfam Oxfam website
Signing away the future – Oxfam Briefing Paper Oxfam website
Signing away the future – Q&A Oxfam website
Questions
| 1. |
Explain the difference between a regional trade agreement and a bilateral trade agreement. |
| 2. |
Discuss the advantages and disadvantages for developing countries of signing (a) bilateral trade agreements and (b) regional trade agreements. |
| 3. |
Choose a specific recent regional trade agreement and assess the impact it has had on the member countries. |
Changes in house prices could be considered a national obsession in the UK and recent speculation about a property crash or a crash in the buy-to-let sector of the market has been no exception. Many commentators differ about the possible direction of house prices with average annual increases of around 10% continuing. So will the sector crash? Or won’t it? The articles below consider some of the issues on the supply side and the demand side of the market.
Head to Head: Will property prices crash? BBC News Online (13/03/07)
Five million new homes needed Guardian (16/03/07)
Past report of buy-to-let’s death have been exaggerated Guardian(21/02/07)
Britain likely to need 5m new homes by 2027 Guardian (17/03/07)
Questions
| 1. |
Describe the main factors determining the level of supply and demand in the housing market in the UK. |
| 2. |
Using supply and demand diagrams as appropriate, illustrate recent changes in the UK housing market. Draw a further set of diagrams to illustrate the changes in the rented sector of the housing market. |
| 3. |
Assess the most likely direction of house prices in the next three years and give reasons for your answer. |
China, in a contentious new law, has given its people additional private property rights and protection of private assets. Many were worried that this eroded fundamental socialist principles, and it can be argued that this moves China further towards becoming a market economy.
China announces new property law BBC News Online (9/3/07)
China passes new law on property BBC News Online (16/3/07)
Questions
| 1. |
Examine the implications for the Chinese economy of the new additional property rights. |
| 2. |
Discuss the advantages and disadvantages of the new law giving additional private property rights. |
| 3. |
Assess the extent to which this moves China closer to being a free market economy. |