According to the article linked to below, the demand for offal has risen by 15% in France since the investment bank Lehman Brothers went out of business. Over the same time period French butchers have faced a 2.6% fall in the demand for beef. So is the global financial crisis set to make offal merchants rich?
Recipes for the recession bring offal back into fashion in France Times Online (20/11/08)
Let them eat offal Guardian (20/11/08)
Questions
- Given the recession in France, as what types of good would you classify (a) offal and (b) beef?
- What values would you expect for the income elasticity of demand for (a) offal and (b) beef?
- What are the principal determinants of the demand for offal?
- Using diagrams as appropriate, explain the changes that have taken place in the market for offal in recent months.
- Discuss the extent to which the increase in demand for offal has been caused by the promotional strategies adopted by The National Federation of French Offal Merchants.
As if there wasn’t enough bad economic news at the start of 2008, Majestic Wine has been warning wine lovers to stock up early as the price of their favourite tipple is likely to rise considerably during 2008. The company is warning that, due to the strong euro and poor harvests, the price of an average bottle may rise by as much as £1.
Wine lovers find no escape from the woes of world’s economy Times Online (4/1/08)
Majestic warns of champagne price rise Telegraph (4/1/08)
Questions
| 1. |
Using diagrams as appropriate, illustrate the changes taking place in the market for champagne and other wines. |
| 2. |
Identify the principal determinants of the price elasticity of demand for wine. |
| 3. |
Discuss the extent to which a £1 rise in the price of a bottle of wine will affect the equilibrium market quantity. |
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. |
January 2007 saw unseasonably cold weather in California and the big freeze that occurred may have destroyed up to 70% of the Californian orange crop. Prices as a result of oranges are likely to treble in US shops. The impact on prices elsewhere in the world may be less, but is still likely to be significant as California is an important area in global terms. Oddly the price of orange juice is unlikely to be affected as very few of the Californian oranges go for turning into juice. The majority of oranges for juice are grown in Florida.
Questions
| 1. |
Using supply and demand diagrams as appropriate, explain the impact of the freezing weather in California on the world price of oranges. |
| 2. |
Using supply and demand diagrams as appropriate, compare and contrast (a) the change in the price of oranges and orange juice and (b) the change in the price of oranges in the USA and the rest of the world.. |
| 3. |
Examine the likely impact of the cold weather in California on prices of other foods. |