Microeconomics: IB Economics
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Microeconomics: IB Economics
A brief overview of relevant articles for IB, A-Level and Pre-U economists relating to microeconomic issues
Curated by Graham Watson
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Energy firms likely to miss smart meter deadline, warns Which?

Energy firms likely to miss smart meter deadline, warns Which? | Microeconomics: IB Economics | Scoop.it
Which? says suppliers would have to triple their installation rate to reach the 2020 deadline.
Graham Watson's insight:

The smart meter is meant to be a force for good, but their introduction is behind schedule and it makes you wonder if this is another example of government failure waiting to happen. It's clear that we're not going to hit the 2020 deadline without significant expenditure and this might exceed the potential savings that supporters are certain that smart meters are going to generate. 

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The streaming wars: Can Disney topple Netflix?

The streaming wars: Can Disney topple Netflix? | Microeconomics: IB Economics | Scoop.it
Netflix is the leader in online video. Will Disney's plans check its growth?
Graham Watson's insight:

A really interesting article about Disney entering the streaming market, and becoming a competitor to Netflix. 

 

It's a fantastic article for many reasons: it shows the dynamic nature of markets - twenty years ago, consumers wouldn't have dreamt of streaming in its modern guise. However, there are also interesting asides to consider - network effects, the economies of scale and scope enjoyed by both companies, and the nature of competition in the digital age.

 

All fascinating material and well worth a read. 

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EE and Virgin Media fined £13.3m for overcharging customers

EE and Virgin Media fined £13.3m for overcharging customers | Microeconomics: IB Economics | Scoop.it
The companies overcharged phone and broadband customers leaving their contracts early, Ofcom says.
Graham Watson's insight:

Regulation in action - Ofcom has intervened to fine EE and Virgin Media for overcharging people wanting to leave broadband and phone contracts.

 

EE appear to have accepted the ruling but Virgin Media are livid - however, the actions of both were deemed by Ofcom to have reduced the incentive for customers to switch provider, reducing efficiency.

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Pubs fail to stop underage gambling, watchdog warns

Pubs fail to stop underage gambling, watchdog warns | Microeconomics: IB Economics | Scoop.it
Nine out of ten pubs do not prevent teenagers from using gaming machines, Gambling Commission says
Graham Watson's insight:

Gambling is clearly in the headlights at the moment - in this case, it's fruit machines in pubs, with the latest research suggesting that the vast majority of pubs don't stop children playing them, despite the fact that this is against the law.

 

Campaigners argue that a failure to intervene is likely to foster a gambling habit in the young. I wonder if the empirical evidence bears this out.

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Addison Lee loses appeal on worker rights

Addison Lee loses appeal on worker rights | Microeconomics: IB Economics | Scoop.it
Court upholds ruling that drivers are employees, not self-employed, in major blow to taxi company.
Graham Watson's insight:

Another triumph for workers in the gig economy, the Court of Appeal ruling that Addison Lee's drivers are employees and not contractors, and thus they are entitled to the minimum wage and holiday pay.

 

Perhaps similar businesses might consider facing up to the changed direction of the tide, rather than fighting legal battles to defend corporate rent-seeking, because that's what it is. 

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Troubled npower sheds 500,000 customer accounts in 2018 | Business | The Guardian

Troubled npower sheds 500,000 customer accounts in 2018 | Business | The Guardian | Microeconomics: IB Economics | Scoop.it

npower to report fourth consecutive annual loss.

Graham Watson's insight:

Evidence of a significant degree of churn in the energy market - with members of the Big Six losing customers. Overall, 4.2 million customers have changed their energy supplier and the profits of the once-dominant firms are declining, which implies that there's greater efficiency in the market.

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Oil price drops amid fears over demand

Oil price drops amid fears over demand | Microeconomics: IB Economics | Scoop.it
The latest falls come after oil cartel Opec reduces its forecast for global oil demand next year.
Graham Watson's insight:

There are times when you just wish that markets would make their minds up: oil prices do the hokey-cokey. Demand and supply. Or Damned demand and supply, if you wish to curse.

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Oil prices rise as Saudi Arabia signals production cut | Business | The Guardian

Oil prices rise as Saudi Arabia signals production cut | Business | The Guardian | Microeconomics: IB Economics | Scoop.it
Energy minister’s remarks help lift price, with Opec likely to confirm move next month
Graham Watson's insight:

Basics. D&S. And oil.

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The ‘nudge unit’: the experts that became a prime UK export | Politics | The Guardian

The ‘nudge unit’: the experts that became a prime UK export | Politics | The Guardian | Microeconomics: IB Economics | Scoop.it
A team of former civil servants specialising in behavioural psychology now pulls in revenues of £14m a year
Graham Watson's insight:

A quick look at the first decade of the Behavioural Insights Unit, and the impacts that it has had on a variety of policy areas.

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New UK gas power station 'would breach climate commitments' | Business | The Guardian

New UK gas power station 'would breach climate commitments' | Business | The Guardian | Microeconomics: IB Economics | Scoop.it
Environmental law group submits objection over proposed 3.6GW Drax plant
Graham Watson's insight:

However, environmentally-friendly on the one hand, but less environmentally-friendly in another. This Guardian article notes that the government's decision to approve a new gas power station at Drax is likely to see the UK breach its climate commitments. As a result, an environmental pressure group is challenging the decision. 

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Inside Amazon: The Rugeley warehouse - BBC Newsnight

Does the online retail giant offer a new dawn to towns like Rugeley? 

Graham Watson's insight:

This Newsnight clip looks at the impact of Amazon opening its fulfilment facility in Rugeley, and this highlights the debate about working conditions in Amazon's warehouses. 

 

David Grossman investigates - it's a fascinating insight into the nature of modern commerce. 

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Let’s stop lining housebuilders’ pockets and tax them instead | Aditya Chakrabortty | Opinion | The Guardian

Let’s stop lining housebuilders’ pockets and tax them instead | Aditya Chakrabortty | Opinion | The Guardian | Microeconomics: IB Economics | Scoop.it
Jeff Fairburn’s £75m bonus has sharpened focus on the windfalls of help to buy, says Guardian columnist Aditya Chakrabortty
Graham Watson's insight:

Aditya Chakrabortty deconstructs the excessive bonuses paid to executives in the construction sector, arguing that whilst their pay is excessive, it's a direct consequence of government intervention in the market, particularly "help-to-buy".

 

And he's right - how can a bonus of £75 million be justified? In the construction sector? I'd love to know how much per house that represents.

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Could these balls help reduce plastic pollution?

Could these balls help reduce plastic pollution? | Microeconomics: IB Economics | Scoop.it
Microplastics have swamped our ecosystem. Can tech help prevent them entering our water systems?
Graham Watson's insight:

Another invention designed to reduce marine pollution -the cora ball is designed to reduce the number of microfibres entering waste water and ultimately our oceans. It is one of a number of innovations looking to reduce this form of pollution. 

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Productivity woes? Why giving staff an extra day off can be the answer | Business | The Guardian

Productivity woes? Why giving staff an extra day off can be the answer | Business | The Guardian | Microeconomics: IB Economics | Scoop.it
Firms that operate a four-day week with no cut in pay or benefits, as proposed last week by John McDonnell, can see improvements in staff morale and health as well as revenue
Graham Watson's insight:

Hands up if you'd like to work a four-day week without any cut in pay? 

 

It sounds appealing, and there are signs that for some companies it might be the way forward. For example, Pursuit, a telephone and digital marketing firm, has seen productivity rise by nearly 30% at the same time as boosting revenues and reducing staff turnover. 

 

Is this the way for Britain to overcome the productivity puzzle?

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How long can gin stay in high spirits?

How long can gin stay in high spirits? | Microeconomics: IB Economics | Scoop.it
Gin has gone from a drink for posh parents and old buffers to the hippest spirit in the UK - but is it on the wane again?
Graham Watson's insight:

A story of changing consumer tastes, a dynamic market and a hint of the product life cycle, with the emergence of the market for gin. 

 

Whereas thirty years ago, gin was old-fashioned, today it is all the rage, with a variety of flavours, and an increased number of producers. It is interesting to note that one of the major factors in the emergence of the market was a change in the law: deregulation of the market, allowing for smaller distillers being licenced to produce gin seems to have been a key moment in encouraging craft distillers.

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Should we pay people for donating blood?

Should we pay people for donating blood? | Microeconomics: IB Economics | Scoop.it
Worldwide sales of blood plasma are increasingly strongly, but is it ethically right that people should be paid to donate it?
Graham Watson's insight:

If you want an ethical issue to discuss, then this might be it?

 

Should we pay people for donating blood. This raises all sorts of concerns - there's clearly an opportunity cost for donors, but would payment change the nature of the transaction? And if so, what would the unintended consequences of this be?

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Hand car washes should be licensed say MPs

Hand car washes should be licensed say MPs | Microeconomics: IB Economics | Scoop.it
Environmental Audit Committee says cheap hand car washes should be licensed to prevent "modern slavery".
Graham Watson's insight:

This is an interesting article, because it counters the prevailing wisdom. For the most part, we talk about removing regulation - i.e. deregulation - to increase efficiency. However, in this case there's a call for increased regulation to stop 'modern slavery' - and, in essence, to protect employers abusing their monopsony position.

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Gambling machine climbdown means new rules go ahead in April

Gambling machine climbdown means new rules go ahead in April | Microeconomics: IB Economics | Scoop.it
It comes after 70 MPs called on the government to cut the largest wager on FOBTs from April.
Graham Watson's insight:

A victory for common sense, and an indication of how policymaking is complicated by vested interests. No one doubts that there are negative externalities associated with problem gambling encouraged by FOBTs but the current government are also heavily influenced by bookmakers too. 

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Monopoly - Applied Data on UK Market Shares

This short video looks at recent data on the market share of leading businesses in a variety of UK and global industries. In some, there are dominant firm
Graham Watson's insight:

A lovely little Tutor2U video looking at the market share of various different markets, from global pharmaceuticals to the UK sofa market.

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Millennials haven't killed pubs – pubs just haven't kept up | Devarshi Lodhia | Opinion | The Guardian

Millennials haven't killed pubs – pubs just haven't kept up | Devarshi Lodhia | Opinion | The Guardian | Microeconomics: IB Economics | Scoop.it
Rising prices and diversification have made the boozer less of a priority, says freelance journalist Devarshi Lodhia
Graham Watson's insight:

Back in the mists of time, a Pre-U Data Response question looked at whether the government should intervene to protect Britain's pubs from closure. This is the perfect example of why such a policy would be wrongheaded: the market, like any other, is dynamic and subject to changing tastes, and, producers should adapt to changing tastes rather than rely on inefficient government intervention to protect them.

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World has no capacity to absorb new fossil fuel plants, warns IEA | Business | The Guardian

World has no capacity to absorb new fossil fuel plants, warns IEA | Business | The Guardian | Microeconomics: IB Economics | Scoop.it
Watchdog says new projects must be low carbon or existing plants must be cleaned up
Graham Watson's insight:

The Guardian highlights the fact that even the International Energy Agency is of the view that the world has no ability to absorb the carbon emissions of new fossil fuel power plants, if it wants to meet existing climate change commitments.

 

Yes, renewables are slowly growing, especially in the developed world, but fossil fuels will remain the principal source of energy for the foreseeable future.

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Boardroom boys still full of excuses for lack of equality | Business | The Guardian

Boardroom boys still full of excuses for lack of equality | Business | The Guardian | Microeconomics: IB Economics | Scoop.it
A government review into the shortage of female executives – due to make its final report this week – has exposed amazingly backward attitudes
Graham Watson's insight:

This Observer business leader looks at the causes of gender inequality, and the lack of female executives, arguing that cultural factors, and backward attitudes have a significant role to play in this. 

 

Unfortunately, the issue is that these sorts of things are the hardest to amend via policy interventions. 

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Retailers to pay up to £1bn for recycling under waste strategy | Environment | The Guardian

Retailers to pay up to £1bn for recycling under waste strategy | Environment | The Guardian | Microeconomics: IB Economics | Scoop.it
Exclusive: ministers seeking to make firms pay more towards recycling their own waste
Graham Watson's insight:

It seems that the government is going to increase the costs of recycling for many firms, as it looks to increase its emphasis on more environmentally-friendly methods of production. 

 

It won't be popular, but it will look to internalise the negative externalities associated with waste.

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The cost of renting in the UK in seven charts

The cost of renting in the UK in seven charts | Microeconomics: IB Economics | Scoop.it
The typical one-bed home in England costs £600 a month to rent, but this hides a big divide across the country.
Graham Watson's insight:

A really interesting snapshot of the state of the UK rental market with all sorts of asides about rent differentials, the discrete nature of individual housing markets, even in the same location, and the extent to which there's a clear generational divide in the market too.

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Gig economy workers' rights to be given boost in overhaul | Business | The Guardian

Gig economy workers' rights to be given boost in overhaul | Business | The Guardian | Microeconomics: IB Economics | Scoop.it
Exclusive: PM targets loophole allowing firms to pay agency workers less than full-time staff
Graham Watson's insight:

An interesting change in the law is mooted in that the government is looking to ensure that agency workers are paid the same as full-time staff doing the same job. It's only fair, and is part of a raft of possible measures being considered as part of the regulation of the gig economy.

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