Unit 3: UK oil & gas industry in crisis. (Business strategy & game theory)

Thank you to Elliot for this article on the UK Oil & Gas industry. Useful for Unit 3 questions on 'why are they making a loss or fall in profits' type question and 'what strategies could they use to improve situation'.

Rising costs and fall in price due to increased supply elsewhere are just some of the reasons.

Strategies discussed include reducing investment, cutting costs etc

Can you apply game theory to these questions?

Unit 2 & 4: Real wages are on the rise!

Thank you to Huzaifa for this article on real wages in the UK. Real wages take into account inflation. If real wages are rising it should increase disposable income and lead to increases in aggregate demand.

Questions for discussion:

Assess the economic effects of an increase in the real wage be for the UK economy. (8 Marks)

Unit 2 & 4: Budget deficits and Surplus

Thank you once again to Riz (where are the rest of you?) for sending me this article on how the UK government has managed to turn a monthly deficit into a surplus. This is good news in terms of reducing the UK's overall national debt burden.

Questions to think about:

Is reducing the national debt a good thing?
What could be a downside to this?
How has the government managed to turn a deficit into a surplus.
What does this mean for future macroeconomic policy?

Unit 3: CMA & Report on the 'Big Six'!

Morning everyone, thanks again to Riz for sending me this article on the gas companies. It seems that they are charging more for their energy than perhaps they should.

However, the CMA still regards the profits to be within the reasonable limits, despite the fact the energy costs are hitting the 'Most Vulnerable'. Is this an example of regulatory capture?

Unit 3: Public Private Partnerships

Once again, Thank you to Riz for finding this article on the issues with bringing in private firms to provide a public service.

It raises a few excellent evaluation points. Firstly, are governments asking too much of a company that naturally wants to profit maximise when the government wants best service possible. Secondly, are the government contracts too lenient for private firms.....if this was a private hospital, it would close (as they have made a loss). The obvious issue with this is what happens if you are sick or have an accident in Hitchinbooke?

Unit 3: Another great regulation article

Thank you to Riz for finding another great article on regulation. (Click here to access).

The article identifies issues with patents (part of the a question you have just completed in your mock exam!)

Unit 4: What should we (the government) focus on?

When will people listen? It's not 'Clever' not paying tax. It's morally wrong!

Unit 3: Tesco being investigated - Regulation

Tesco is to face another investigation into its relations with suppliers, amid concerns that it breached the Groceries Supply Code of Practice.    Click here to read the article.

It highlights the issue that a huge company like Tesco can have buying power over smaller suppliers. (monopsony).

This can not only mean pushing prices down, but also withholding payments to suppliers, causing cash flow problems and bankruptcy.

The article suggests that the regulation investigation will take 9 months. Not only is this a huge cost to the taxpayer, but it also means nothing can be done for the suppliers for at least this period of time, if not longer.

Is this another example of government failure as far as regulation is concerned?

Unit 1: Indirect Taxation and its regressive effect on consumers

The weekend newsletter from the Institute of Economic Affairs has this 2-minute video about the regressive impact if indirect taxation on those with the lowest incomes. The message comes very much from the free-market perspective of the IEA, which may or may not be to your taste, but serves as a very good stimulus to discussion and analysis. The data that supports their argument for a reduction in indirect tax can be found in a report titled Aggressively Regressive.

Unit 3: Gas Prices - Is there 'real' competition?

Thank you to Riz for finding this excellent article on gas prices in the UK.

It raises many important issues for Unit 3 students.

For instance, the big six do face competition from many smaller firms, but it suggests that they are not really effecting the market enough to change behaviour.

Also, the gas industry say they cannot pass on the recent price falls due to the fact they 'hedge' bu buying gas at a 'futures' price rather than the current market price.

Whether this is true and to what extent it effects gas prices for the customer is the regulators role to find out. But it highlights the complex issue of gas pricing and asymmetric information.