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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Rail nationalisations may be coming down the track

Rail nationalisations may be coming down the track | Microeconomics: IB Economics | Scoop.it
Control of certain struggling franchises could be handed back to the government, sources say.
Graham Watsons insight:

The future of Britain's railways remains uncertain, with emergency deals with various UK franchises due to expire on Sunday.

 

It might be that some existing arrangements lapse and some franchises return to government hands. It will be interesting to see what transpires, although you might argue that the current level of emergency support offered to the rail franchises is tantamount to renationalisation anyhow.

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One Man's Plan to Revolutionize Electric Cars and Elections

After almost 13 years in development, Arcimoto’s three-wheeled electric vehicles had finally started rolling off the production line. But shortly after the first 100 were made, the coronavirus shut down production. While the company has adapted its green vision to our new pandemic reality, its founder has his eyes on fixing another intractable problem.

Graham Watsons insight:

A lovely little clip from BLoomberg - a look at how the pandemic has affected a small electric vehicle manufacturer, helping it and also prompting it to innovate in unusual ways to stay afloat. 

 

It looks fun to drive too...

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Lego to ditch plastic bags after children call for change

Lego to ditch plastic bags after children call for change | Microeconomics: IB Economics | Scoop.it
Lego is investing £310m to make its products more sustainable after letters from young customers.
Graham Watsons insight:

Consumer power - that of the young consumer - has prompted Lego to get rid of plastic bags after a number of letters from its customers querying its commitment to sustainability.

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UK government under pressure to intervene in Arm sale to Nvidia | Business | The Guardian

UK government under pressure to intervene in Arm sale to Nvidia | Business | The Guardian | Microeconomics: IB Economics | Scoop.it
Labour, unions and co-founder express concern about deal for Britain’s biggest tech company
Graham Watsons insight:

Another call for thew UK government to demand guarantees from Nvidia in relation to its purchase of Britain's largest tech company, ARM Holdings. The argument is that, at present, there is little to stop the company relocating ARM's HQ, and that this would be against British national interests.

 

But is it a strong 'economic' argument?

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TikTok rejects Microsoft bid at eleventh hour

TikTok rejects Microsoft bid at eleventh hour | Microeconomics: IB Economics | Scoop.it
Oracle is now the favourite to take over US operations of the popular Chinese-owned video-sharing app.
Graham Watsons insight:

It seems that the looming deadline for US company's to buy the US operations of video-sharing app TikTok has forced the hand of one or two - with Microsoft's offer to buy the company being rebuffed, seemingly in favour of selling to Oracle.

 

The whole business has been highly irregular, with the 'forced' sale of the app unusual to say the least.  

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Haribo stocks run low at Tesco over price cut row

Haribo stocks run low at Tesco over price cut row | Microeconomics: IB Economics | Scoop.it
The supermarket is reportedly not ordering more sweets until the confectioner agrees to drop prices.
Graham Watsons insight:

A supermarket story - it seems that the deal that Aldi have with Haribo is better than the one that Tesco have with the German sweet manufacturer, and as a result the latter - and their commitment to match Aldi on price - want to renegotiate their deal.

 

It seems that Tesco is trying to exert a little bit of monopsony power over the sweet manufacturer. Whether or not Haribo feel the need to budge remains to be seen.

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Labour calls for UK jobs guarantee in potential Arm sale to Nvidia | Business | The Guardian

Labour calls for UK jobs guarantee in potential Arm sale to Nvidia | Business | The Guardian | Microeconomics: IB Economics | Scoop.it
Government urged to intervene to ensure US buyer does not move microchip firm’s HQ
Graham Watsons insight:

I've already 'scooped' outline details of the ARM-Nvidia merger, and this story highlights the fact that there are concerns that UK competition policy doesn't do enough to protect UK jobs. 

 

In many senses, this sort of concern dates back to the 2010 Cadbury's - Kraft merger, and in this case the Shadow Business Secretary is asking the government to seek guarantees regarding the location of ARM's HQ and protection of British jobs.

 

It's a tough balancing act: the merger reflects market forces - but do they sometimes operate against the national interest, and at what point, and how can the government intervene?

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LVMH scraps Tiffany takeover citing tariff fight

LVMH scraps Tiffany takeover citing tariff fight | Microeconomics: IB Economics | Scoop.it
The French luxury goods giant had planned to buy the US-based jeweller for more than $16bn.
Graham Watsons insight:

Trouble in the luxury goods market: the LVMH - Tiffany merger is off. It won't make a jot of difference to me, I suspect but it seems that Tiffany's aren't overly impressed, not least because LVMH have asserted that threat of future US tariffs has halted the move. 

 

It's not the fact that Tiffany's share have fallen 36% in the first half of the year, and that the original offer price of $135 per share looks overly generous then. That said, even without Covid-19, it's often the case that people pay too much to merge - the so-called 'winner's curse'.

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Rio Tinto CEO's fate in balance as board to meet after blasting of Aboriginal site | Business | The Guardian

Rio Tinto CEO's fate in balance as board to meet after blasting of Aboriginal site | Business | The Guardian | Microeconomics: IB Economics | Scoop.it
Investor pressure increases over mining company’s destruction of two 46,000-year-old caves at Juukan Gorge
Graham Watsons insight:

Ethics and the mining industry. Mutually exclusive?

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Uber pledges all-electric fleet by 2040

Uber pledges all-electric fleet by 2040 | Microeconomics: IB Economics | Scoop.it
The transportation company says it has a "responsibility" to tackle climate change.
Graham Watsons insight:

Uber has announced that it has a responsibility to tackle climate change, and as a result all of its taxis will be electric: in the US, Canada and Europe by 2030 and elsewhere by 2040.

 

It's an eye-catching claim - and highlights the company's green credentials bu you have to ask if it's really that impressive. Won't most new cars be electric by 2030 in the developed world? And elsewhere by 2040?

 

It's also another one of those claims that easy for executives to make in 2020 because they won't be accountable for them when the deadlines arrive.

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How much did the Covid-19 lockdown really cost the UK? | Larry Elliott | Business | The Guardian

How much did the Covid-19 lockdown really cost the UK? | Larry Elliott | Business | The Guardian | Microeconomics: IB Economics | Scoop.it
Economists have conducted a cost-benefit analysis of the blanket shutdown. It makes for grim reading
Graham Watsons insight:

You've got to love a cost-benefit analysis - in this case dealing with coronavirus - and it doesn't make for pleasant reading. According to the research, the UK's response to Covid-19, and the imposition of a total lockdown cost the UK far more than it saved, and we'd have been better following the Swedish example and adopted less stringent restrictions. 

 

But how do they reach all of these conclusions? What assumptions is this research based on? How valid is it?

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The global coffee market has had a rollercoaster year amid Covid crisis | Business | The Guardian

The global coffee market has had a rollercoaster year amid Covid crisis | Business | The Guardian | Microeconomics: IB Economics | Scoop.it
Coffee sales around the world have fallen, risen and plunged again, hitting producers hard
Graham Watsons insight:

D&S and coffee prices - it's down and then up, and then down and then up again, largely as a result of fluctuations in demand and supply. 

 

However, the uncertainty in the coffee market has adversely,  affected coffee producers and also damaged developmental prospects in those countries heavily dependent upon the product.

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Higher price of electric cars a concern for more than half of UK consumers | Environment | The Guardian

Higher price of electric cars a concern for more than half of UK consumers | Environment | The Guardian | Microeconomics: IB Economics | Scoop.it
Cost deterrent ‘risks UK being in slow lane’ in transition from fossil fuel vehicles, says car industry body
Graham Watsons insight:

The Society for Motor Manufacturers and Traders (SMMT) suggests that there's one factor responsible for the slow take-up of electric cars in the UK: their price.

 

I suspect that the relative lack of infrastructure also plays a part in this.

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John Lewis scraps bonus for first time since 1953

John Lewis scraps bonus for first time since 1953 | Microeconomics: IB Economics | Scoop.it
The partnership posted a £55m loss in the six months to 25 July as costs soared during the pandemic.
Graham Watsons insight:

An interesting story about the various stakeholders in a firm, and its structure, given that employees at John Lewis Partnership are partners and share in the firm's successes, or failures. 

 

In this case, the partnership has posted a loss, and as such its partners are no going to receive a bonus for the first time in nearly 70 years. The company faces tricky times ahead, is closing a number of its stores and trading conditions are complicated by the continued growth of e-commerce. 

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Most plastic will never be recycled – and the manufacturers couldn’t care less | Arwa Mahdawi | Opinion | The Guardian

Most plastic will never be recycled – and the manufacturers couldn’t care less | Arwa Mahdawi | Opinion | The Guardian | Microeconomics: IB Economics | Scoop.it
Oil and gas companies make far more money churning out new plastic than reusing old. Meanwhile, the public gets the blame, writes Arwa Mahdawi
Graham Watsons insight:

All economist will spot the self-evident truth in the headline, but this article highlights a little known fact: is plastic as recyclable as people make out?

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Net loss: the high price of salmon farming | News | The Guardian

Net loss: the high price of salmon farming | News | The Guardian | Microeconomics: IB Economics | Scoop.it
The long read: The salmon has always been a barometer for the health of the planet. Now industrial-scale farming is bringing pollution, plagues of sea lice and threatening the future of wild salmon
Graham Watsons insight:

A long read about salmon farming: an ideal way to start Tuesday with a look at how something proposed as a way of offering sustainable fish stocks has a hidden environmental cost.

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Global oil demand may have passed peak, says BP energy report | Business | The Guardian

Global oil demand may have passed peak, says BP energy report | Business | The Guardian | Microeconomics: IB Economics | Scoop.it
Oil will be replaced by clean electricity, BP predicts, as demand may never recover from Covid-19 pandemic
Graham Watsons insight:

BP's new Chief Executive, Bernard Looney, appears to have tacitly accepted that the game is up for oil, with BP predicting that the demand for clean energy is going to outstrip demand for fossil fuels. 

 

The net result? The company seems to be of the view that we've passed peak demand for oil. Let's wait and see...

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Meet the Women Fighting the Global Surge in Plastic Waste

Dr. Jenna Jambeck and Dr. Christine Cuomo are discovering innovative ways to keep plastics out of our oceans developed from their research on HP's recycling program in Haiti last year. What they learned there could help create a blueprint for addressing the current plastic crisis and develop scalable, self-reliant and truly circular supply chains -- while building a new green economy.

Graham Watsons insight:

An excellent clip that looks at plastic waste, and potential solutions to the problem, extrapolating from the experience of a programme developed in Haiti, focusing on the reality of creating a circular economy, and collaboration with the community to tackle the problem.

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Turkey farmers 'on tenterhooks' over Christmas demand

Turkey farmers 'on tenterhooks' over Christmas demand | Microeconomics: IB Economics | Scoop.it
BBC News Navigation
Graham Watsons insight:

An unusual coronavirus story: there could be an over-supply of turkeys this Christmas if social gatherings are limited to no more than six people. Frankly, I'm not disappointed: I think that the price of a turkey is scandalous and a lovely example of price gouging - you can get better quality beef and pork for less, and spend the difference on a better bottle of wine. 

 

However, it's a lovely and basic illustration of the forces of demand and supply at work: ideal for Year 12 economists starting to learn about the subject. 

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Petrol and diesel cars could cost up to £1,500 more under proposals | Automotive industry | The Guardian

Petrol and diesel cars could cost up to £1,500 more under proposals | Automotive industry | The Guardian | Microeconomics: IB Economics | Scoop.it
Report suggests buyers of polluting vehicles should subsidise electric cars
Graham Watsons insight:

This is a fascinating story in the Guardian suggesting that the government is contemplating increasing the price of diesel and petrol cars to subsidise electric cars and encourage their take up. 

 

Whilst the latter is a noble intention, the road to hell - irrespective of whether it has the necessary electric car infrastructure - is paved with plenty of these.

 

Furthermore, I think that there's a worrying distributional angle to this: electric cars are currently more expensive than petrol cars, so it rather smacks of the bizarre situation where lower income earners are going to subsidise the consumption of the better-off something that the Society for Motor Manufacturers and Traders (SMMT) has picked up on.

 

That said, perhaps the lack of objections to the 'Eat Out to Help Out scheme have signalled the willingness of the British public to back give-aways to the middle-classes.

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Electric bike and scooter sales boom spurs Halfords back to growth | Business | The Guardian

Electric bike and scooter sales boom spurs Halfords back to growth | Business | The Guardian | Microeconomics: IB Economics | Scoop.it
Sales more than triple on e-bikes and scooters as commuters avoid public transport
Graham Watsons insight:

D&S and e-scooters! A simple chance to analyse market dynamics - what is likely to happen as a result of increased consumer demand for e-scooters and lower levels of demand for public transport.

 

A chance for an early mention of related markets and cross-price elasticity of demand (XPED) perhaps?

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Air pollution causes 3m lost working days per year in UK, says CBI | Environment | The Guardian

Air pollution causes 3m lost working days per year in UK, says CBI | Environment | The Guardian | Microeconomics: IB Economics | Scoop.it
Analysis finds work absences related to poor air are costing Britain about £600m annually
Graham Watsons insight:

A stark reminder of the external costs associated with air pollution in the UK - 3 million working days lost per year, equivalent to around £600m annually.

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Freeze on national living wage would be totally wrong, says TUC | UK news | The Guardian

Freeze on national living wage would be totally wrong, says TUC | UK news | The Guardian | Microeconomics: IB Economics | Scoop.it
Frances O’Grady calls for pay rise pledge to be met, amid speculation it will be scrapped
Graham Watsons insight:

Controversy as regards the National Living Wage, with some press reports speculating that the Treasury was on the point of freezing a proposed increase in response to the coronavirus pandemic. 

 

Of course, this comes at a time when unemployment is expected to rise and there are suggestions that some members of the Low Pay Commission see this as a necessary step. That said, I did enjoy the coverage that suggested that linguistically, we seem only capable of finding rising levels of low pay "unaffordable" and not high pay. 

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How Ben & Jerry’s Makes Nearly One Million Pints A Day | Big Business

To pump out its famous flavours like Half Baked and Cherry Garcia, Ben & Jerry's Vermont plants run 24-7, operated by hundreds of workers and flavor gurus. Business Insider visited the St. Albans factory back in 2019 to see how these iconic pints flip their way to our freezers.

Graham Watsons insight:

More Business Management than Economics, but gold nonetheless. Ethics, production methods, market share, economies of scale, corporate social responsibility.

 

It's difficult to know where to start...

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Tesco asks shoppers to weigh their food bins to help cut waste | Business | The Guardian

Tesco asks shoppers to weigh their food bins to help cut waste | Business | The Guardian | Microeconomics: IB Economics | Scoop.it
Project by supermarket and charity Hubbub aims to tap into changing attitude to food waste after lockdown
Graham Watsons insight:

Tesco is joining with charity Hubbub in attempt to try and reduce food waste. This follows a 2018 attempt by Sainsbury's Waste Less, Save More scheme to reduce waste in a Derbyshire town - Swadlincote, from memory - which was abandoned because it didn't generate the anticipated benefits. 

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