Tag: demand

In real terms the price of alcohol has been gradually falling, but to what extent might this have been a factor in rising levels of binge drinking in the UK? The link below is to an extract from the BBC Radio 4 Today Programme and will require real player installed on your computer to listen to it.

The price of alcohol and binge drinking BBC Today Programme(January 2008)

Questions

  1. What are principal determinants of demand for alcohol?
  2. Assess the relative importance of price against the other determinants of demand for alcohol.
  3. What are the principal factors that determine the price elasticity of demand for alcohol? Assess the extent to which an increase in the price of alcohol will lead to a fall in spending on alcohol.
  4. How effective would a rise in the tax on alcohol be in raising revenue for the government?

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.