Unit 1: Information Failure

Health campaigns such as these here are attempts to correct market failure by raising consumers awareness about the negative externalities associated with smoking. In other words they aim to correct information failure.

Do you think that these clips actually work?

What is the opportunity cost of videos such as these?

What would be a more effective method?

Here are some examples of policies aimed at trying to reduce the negative externalities caused by eating junk food. 

This video clip here has found research that says that educating students at schools about the dangers of drugs would actually encourage students to take drugs!!

Unit 1: Rail Fare Rises

In the UK rail fares have risen by more than 4% (more than inflation) to pay for improvements to the rail network. 

This has angered many commuters who rely on the train to get in and out of work.

Have a look HERE and HERE for more information. 

Things to think about:

How will this impact labour mobility?

Aren't trains supposed to be 'green alternatives' to cars - shouldn't we be subsidising them?

Who should provide rail transport - the Government or private firms? Why?

http://news.bbcimg.co.uk/media/images/57436000/gif/_57436052_train_fares464x451.gif

Unit 1: Public goods

Public goods are non diminishable, non rivalrous and non excludable. Light houses and street lights are often cited as examples. If it was left to the free market to supply these goods they would be underprovided as people can 'free ride.' Lets say that Brendan decided to put a streetlight outside his house - he could not stop Carl, his next door neighbour from using or benefiting from it (non excludable).

Another good example of public goods is flood defence schems. This winter the UK suffered from heavy rains. The government has been critisied in the past from not spending enough on flood defence - did they do enough this year? Watch this VIDEO  and this VIDEO for more information.

The UK is not the only country in Europe to suffer from flooding - Venice whilst famous for its canals is also sinking. Watch THIS clip from more information. 

Things to think about:

a) Are these flood defences non-excludable?
b) Are these flood defences non-rival?
c) So, are these flood defences a pubic, quasi-public or private good?

Unit 1: Smoking and Market Failure

The latest attempt to stop people smoking is a hard hitting advert that shows a tumor growing out of a cigarette.

Click on this link HERE for more information.

Questions to think about:

What are the negative externalities associatied with smoking

What methods does the Government already use to stop smoking - which is the most effective and why?

What would a negative externality diagram WITH tax look like?

How does a tax on cigarettes affect consumer and producer surplus?

Unit 4: Development Glossary

Economic Development and Growth Glossary from Geoff Riley

Unit 3: Glossary of Terms

Unit 3 Business Economics Glossary from Geoff Riley

Unit 3: Revision advice for Jan examination

Some excellent advice for the upcoming Unit 3 exam...

A2 Micro Unit 3 Revision Advice from Geoff Riley