Microeconomics: IB Economics
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June 1, 2024 4:46 AM
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Extend success of UK sugar tax to cakes, biscuits and chocolate, experts urge | Sugar | The Guardian

Extend success of UK sugar tax to cakes, biscuits and chocolate, experts urge | Sugar | The Guardian | Microeconomics: IB Economics | Scoop.it
From www.theguardian.com - June 1, 2024 1:00 AM
Exclusive: Co-author of analysis for WHO calls on government to control the food industry rather than being subservient to it
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Graham Watson's insight:

The World Health Organisation is calling for the UK government to extend the sugar tax to cakes, biscuits and chocolate given the success of the tax in reducing the amount of soft drinks sold.

 

As the article notes: "The levy on the soft-drinks industry led to a 34.3% fall in total sugar sales from such products between 2015 and 2020". Equally, the levy led to the reformulation of many soft drinks too. 

 

But would extending it to other sectors of the food industry make economic sense? 

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Microeconomics: IB Economics
Economy
A brief overview of relevant articles for IB, A-Level and Pre-U economists relating to microeconomic issues
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Scooped by Graham Watson
Today, 8:26 AM
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Fuel rations and no air con: south-east Asian nations race to conserve energy | Oil | The Guardian

Fuel rations and no air con: south-east Asian nations race to conserve energy | Oil | The Guardian | Microeconomics: IB Economics | Scoop.it
From www.theguardian.com - Today, 5:28 AM
Governments in countries heavily reliant on Middle Eastern oil introduce measures to shield public from soaring costs
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Graham Watson's insight:

Is this worth scooping? 

 

I don't know, it simply reaffirming how changes in economic variables affect lives - in this case how a scarcity of oil has resulted both in changes in the market price of energy more widely and the non-market methods adopted across Asia to ration that scarce resource: 4-day working weeks, a ban on air-conditioning, changing the blend of biofuels and subsidising fuel to make it more affordable. 

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March 16, 12:02 PM
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Dozens of petrol stations around Australia run out of fuel as panic-buying continues | Transport | The Guardian

Dozens of petrol stations around Australia run out of fuel as panic-buying continues | Transport | The Guardian | Microeconomics: IB Economics | Scoop.it
From www.theguardian.com - March 16, 3:08 AM
NRMA says record-high fuel may be here to stay in Sydney, Melbourne and Brisbane after prices soared early in the Middle East conflict
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Graham Watson's insight:

An echo of the period immediately prior to COVID, with fuel shortages starting to affect Australian petrol station, and consumers engaging in panic buying. You should be capable of defining what is meant by a shortage and aware of the implications of shortages for resource allocation more generally. 

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March 15, 5:29 AM
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Global food supplies could be badly hit if Iran war drags on, says fertiliser boss | US-Israel war on Iran | The Guardian

Global food supplies could be badly hit if Iran war drags on, says fertiliser boss | US-Israel war on Iran | The Guardian | Microeconomics: IB Economics | Scoop.it
From www.theguardian.com - March 14, 7:00 AM
Yara’s Svein Tore Holsether says it would be ‘catastrophic’ if the strait of Hormuz was closed for a year
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Graham Watson's insight:

The same point about derived demand made by the boss of a fertiliser manufacturer. 

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March 13, 4:49 PM
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UK petrol retailers claim ‘inflammatory language’ of ministers led to staff abuse | Petrol prices | The Guardian

UK petrol retailers claim ‘inflammatory language’ of ministers led to staff abuse | Petrol prices | The Guardian | Microeconomics: IB Economics | Scoop.it
From www.theguardian.com - March 13, 2:50 PM
Trade body attends Reeves meeting, hours after saying it was pulling out over suggestions of ‘price gouging’
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Graham Watson's insight:

Today's meeting between the government and petrol retailers might have been a little bit testy - with the latter claiming that the government's rhetoric had inflamed matters. That and the billion pound profits of the oil companies, perhaps. 

 

However, the Competition and Markets Authority are already investigating the sector, and they've also put the market "on notice" that they are closely scrutinizing current price rises to ensure that price gouging doesn't occur and we don't see a repeat of the 'rocket and feather' pricing that accompanied the start of the Ukraine war.

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March 13, 4:31 AM
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SUV drivers could face extra charges for driving in London | TfL | The Guardian

SUV drivers could face extra charges for driving in London | TfL | The Guardian | Microeconomics: IB Economics | Scoop.it
From www.theguardian.com - March 12, 8:01 PM
TfL are also poised to increase 20mph zones and cut speed limits on the capital’s fastest roads later this year
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Graham Watson's insight:

It seems as though the drivers of SUVs could be about to face higher charges for driving in London. Rightly so, in my view - they impose greater social costs than regular vehicles, both in terms of air pollution and the cost of road maintenance, never mind the fact that evidence suggests they pose greater danger to pedestrians. 

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March 12, 1:23 PM
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China Is Fueling A Caviar Boom — So Why Is It Still So Expensive?

From www.youtube.com - March 12, 8:00 AM

Caviar used to be so abundant in American rivers that bars gave it away for free. Today, a single ounce can cost more than $250. Its high cost is a result of its scarcity. But over the last decade, China has exported more caviar than any other country in the world, flooding the market. So why hasn't caviar gotten much cheaper? We visited a Michelin-starred restaurant in New York and a small American producer's processing room to see how the tides are shifting in the industry.

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Graham Watson's insight:

This Business Insider clip looks at the price of caviar, and notes that now that China has entered the market, the supply of caviar has increased. You would have thought that this would have lowered the price of caviar, but that's not the case.

 

It's quite a nice look at the history of caviar consumption, from the time of abundance, and bars giving caviar away to today's market for caviar. It's a good example of a luxury good. 

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March 12, 6:18 AM
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More airlines hike flight prices as Iran war continues to disrupt oil supply | Transport | The Guardian

From www.theguardian.com - March 12, 2:19 AM
Cathay Pacific, AirAsia and Thai Airways join Qantas in increasing prices, as travellers flock to airlines that don’t have Middle East stopovers
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Graham Watson's insight:

Some interesting microeconomics here in the form of changing levels of demand for different Asian airlines as passengers look to avoid flying via Gulf States, but equally it's interesting from a costs and revenues perspective, in that some firms have already factored in higher fuel costs, whereas others are going to impose a fuel surcharge.

 

Any change in variable costs and revenues will, of course, mean a change in the equilibrium price and output, and, by definition, profit. 

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March 12, 5:17 AM
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Experts Explain: Why does the gender gap persist?

From www.youtube.com - March 11, 8:57 AM

Women in the economy means growth. Women in the economy means wealth. Women in the economy means jobs. Despite decades of progress, men remain far more likely than women to hold positions of political, social and economic power.

 

The World Economic Forum’s 2025 Global Gender Gap Report shows that full parity remains 123 years away. We spoke with three experts in government, diplomacy and economics on why the gender gap, even in the 21st century, persists. A key takeaway? Laws alone won’t work. Real equality must be lived.

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Graham Watson's insight:

This World Economic Forum clip highlights the lack of recent progress towards gender equality, noting that increasingly it is structural factors that are impeding progress, to the extent that current estimates are that it will still take over 120 years to reach full parity.

 

In fact, for all the changes to labour law, it's social and cultural factors that determine inequality. 

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March 12, 4:27 AM
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European drivers face €220 a year jump in fuel costs due to Iran conflict, say experts | Motoring | The Guardian

European drivers face €220 a year jump in fuel costs due to Iran conflict, say experts | Motoring | The Guardian | Microeconomics: IB Economics | Scoop.it
From www.theguardian.com - March 12, 1:00 AM
Exclusive: Oil at $100 a barrel means higher prices in the EU and UK, making savings for those with electric vehicles even greater, analysts say
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Graham Watson's insight:

The Transport & Environment (T&E) thinktank have quantified the cost of higher fuel prices for European motorists, so that you don't have to.

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March 12, 4:16 AM
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A small US grocer is calling out the lower prices at big chains

A small US grocer is calling out the lower prices at big chains | Microeconomics: IB Economics | Scoop.it
From www.bbc.co.uk - March 11, 8:02 PM
It is 'impossible for us to compete', says the boss of a New York grocery store.
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Graham Watson's insight:

This is a really interesting look at whether or not it is possible for independent grocery retailers to compete with larger, established supermarkets, highlighting some of the economies of scale - notably bulk-buying - that enable them to offer lower prices. 

 

In summary, the small grocer is calling out the relationship between wholesalers and retailers, arguing that price discrimination in favour of the larger chains is anti-competitive and makes competing on price impossible, therefore making markets less competitive and reduces consumer choice.

 

I suspect that large retailers would say that quantity discounts aren't unreasonable and that smaller retailers have a number of non-price advantages such as location that should enable them to compete. 

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March 10, 4:09 PM
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UK junk food ad ban so diluted it may be largely ineffective, experts say | Health policy | The Guardian

UK junk food ad ban so diluted it may be largely ineffective, experts say | Health policy | The Guardian | Microeconomics: IB Economics | Scoop.it
From www.theguardian.com - March 10, 2:41 PM
Exclusive: Report suggests only 1% of annual spend on food and drink adverts will be affected after industry lobbying
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Graham Watson's insight:

There's a suggestion that the recent ban on junk food advertising is going to prove to be ineffective, largely as a result of lobbying by industry insiders. If that's the case, then could this be an example of government failure, in as much as the marginal cost of the intervention is less than the marginal benefit and the net outcome is a reduction in economic welfare? 

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Scooped by Graham Watson
March 10, 4:22 AM
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Millions in England to pay higher water bills after suppliers appeal | Water bills | The Guardian

Millions in England to pay higher water bills after suppliers appeal | Water bills | The Guardian | Microeconomics: IB Economics | Scoop.it
From www.theguardian.com - March 10, 4:04 AM
Anglian, Southern, Wessex and South East allowed to raise charges more than originally allowed by watchdog
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Graham Watson's insight:

It appears that the regulator has relented and allowed a group of water companies to raise their bills by more than originally agreed. 

 

Anglian, Northumbrian, Southern, Wessex and South East all appealed against the original ruling and have now been allowed to increase their bills by an average of an extra 2.2%. The original December 2024 ruling fixed price rises at 36%, with the average bill reaching £597, to help pay for maintenance and investment.

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Scooped by Graham Watson
March 9, 4:26 AM
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G7 to discuss release of emergency oil reserves as price tops $100 | Oil | The Guardian

G7 to discuss release of emergency oil reserves as price tops $100 | Oil | The Guardian | Microeconomics: IB Economics | Scoop.it
From www.theguardian.com - March 9, 3:52 AM
US among three countries so far backing measure triggered by Middle East war, according to reports
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Graham Watson's insight:

And the D&S solution to rising oil prices - releasing fuel from emergency reserves to try and stabilize the oil price. 

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March 16, 4:08 PM
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IEA to consider release of more oil reserves as Iran war keeps prices high | Oil | The Guardian

IEA to consider release of more oil reserves as Iran war keeps prices high | Oil | The Guardian | Microeconomics: IB Economics | Scoop.it
From www.theguardian.com - March 16, 1:51 PM
Head of world’s energy watchdog says it will take time for markets to recover from ongoing crisis in strait of Hormuz
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Graham Watson's insight:

The International Energy Agency (IEA) have suggested that they might consider releasing more strategic oil reserves to try and calm international markets and lower oil prices. 

 

One problem: you can only sell oil reserves once. 

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March 16, 3:18 AM
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Plans for support on heating oil costs to be announced by PM

Plans for support on heating oil costs to be announced by PM | Microeconomics: IB Economics | Scoop.it
From www.bbc.co.uk - March 15, 7:10 PM
Households have faced a sharp rise in the cost of heating oil since the outbreak of the US-Israeli war with Iran.
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Graham Watson's insight:

Another government intervention, this time to offset the costs of the war in the Middle East and its effect on the price of heating oil that's soared in the past few weeks. Evaluate it with the usual tools: opportunity cost, government failure, distributional effects. 

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March 15, 5:28 AM
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‘The sums don’t add up’: UK farmers struggle as Iran war drives up costs | Food & drink industry | The Guardian

‘The sums don’t add up’: UK farmers struggle as Iran war drives up costs | Food & drink industry | The Guardian | Microeconomics: IB Economics | Scoop.it
From www.theguardian.com - March 14, 8:00 AM
Prices of crucial farming inputs such as fuel and fertiliser skyrocketed just before the spring planting season
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Graham Watson's insight:

A fantastic example of the concept of derived demand, with the derived demand for oil in food production clear from its use both in fertiliser manufacture and in ensuring that we've got a supply chain in the sector. And if oil prices rise, then that's also going to mean higher food prices too.  

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March 13, 4:36 AM
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Do we want to keep fixing the same issue? Unlearned lessons from the first big oil crisis | Renewable energy | The Guardian

Do we want to keep fixing the same issue? Unlearned lessons from the first big oil crisis | Renewable energy | The Guardian | Microeconomics: IB Economics | Scoop.it
From www.theguardian.com - March 13, 2:00 AM
As energy prices tripled in the 1970s due to Middle Eastern wars, Scandinavia, France and the Netherlands sped up green transition
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Graham Watson's insight:

The Guardian suggests that we should learn the lessons of the original oil crisis of 1973-74 and be more decisive in moving away from fossil fuels in favour of renewable energy.

 

This article highlights the nations that did this first time around and the different ways they did so: the Danes by investing in wind power; the Dutch by building cycle lanes; the French turning to nuclear power; Scandinavians in insulating homes better and focusing on energy efficiency. The sad thing is that the recent experience of COVID would suggest that we - the Anglo-Saxon world - fail to take chances such as this.

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March 13, 4:25 AM
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Oil price profiteering will not be tolerated, says minister

Oil price profiteering will not be tolerated, says minister | Microeconomics: IB Economics | Scoop.it
From www.bbc.co.uk - March 12, 10:54 PM
Ed Miliband says the competition watchdog is primed to intervene if firms use the oil price shock to "rip off" customers.
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Graham Watson's insight:

The government is meeting with petrol retailers today to tell them that profiteering from the current Iran conflict is not on. Alas, they're a week too late - another penny on fuel overnight and a 10p increase in petrol prices since the start of the crisis suggests it's already happening.

 

Oil is bought in forward markets - so the fuel that's currently being sold at the pump was bought at least 6 months ago has been stored in Rotterdam or somewhere similar. The oil companies will no doubt claim that current price increases are smoothing out the effect of higher costs; however, during the Ukraine war they were accused of 'rocket and feather' pricing; increasing prices extremely quickly and then taking their time in lowering them back down again. Of course, the prevailing market structure means that this sort of behaviour is likely. 

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March 12, 10:09 AM
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Shell CEO’s pay jumps 60% despite slump in profits at oil company | Shell | The Guardian

Shell CEO’s pay jumps 60% despite slump in profits at oil company | Shell | The Guardian | Microeconomics: IB Economics | Scoop.it
From www.theguardian.com - March 12, 8:10 AM
Campaigners say people unlikely to ‘look favourably’ on package for Wael Sawan, which rose to £13.8m in 2025
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Graham Watson's insight:

One of my favourite areas - executive pay - with the boss of Shell seeing their salary plus bonuses rise by 60%, despite the fact that profits fell by 22%.

 

The standard defence is, as ever trotted out: "The CEO’s pay is commensurate with his position at a major global energy company and one of the FTSE’s largest companies. Around 80% of the CEO’s target total package is linked to performance. Since he took over as CEO at the start of 2023, Shell has delivered strong financial and operational performance and outperformed its peers with total shareholder returns of 19% per year.”

 

Make of that what you will. 

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March 12, 6:14 AM
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Welsh Water Dwr Cymru to pay £44.7m after sewage failures

From www.bbc.co.uk - March 12, 5:43 AM
The water supplier is set to pay a proposed £44.7m after "serious and unacceptable" sewage breaches.
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Graham Watson's insight:

OFWAT have hit Welsh Water with a £44.7m penalty for failing to "operate, maintain and upgrade its wastewater network to ensure it could cope with levels of sewage and wastewater". The net result has been marine pollution and the company is being punished for this. 

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March 12, 4:31 AM
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Will releasing millions of barrels of oil stockpiles really bring down fuel costs? | Oil | The Guardian

Will releasing millions of barrels of oil stockpiles really bring down fuel costs? | Oil | The Guardian | Microeconomics: IB Economics | Scoop.it
From www.theguardian.com - March 11, 1:14 PM
Despite rare act of multilateralism, there is no guarantee the IEA’s release of 400m barrels from reserves will depress prices
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Graham Watson's insight:

Given today's moves on global oil markets, it's already almost too late to scoop this. However, I've done so because a number of wise heads were quick to suggest that even the release for 400m barrels of oil from strategic reserves might not bring down the oil price to the extent that you might have thought. 

 

This reflects the net effect of releasing the reserves against the loss of oil coming through the Strait of Hormuz as well as the impact that using these reserves might have on confidence in the market. 

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March 12, 4:26 AM
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Oil price jumps despite deal to release record amount of reserves

Oil price jumps despite deal to release record amount of reserves | Microeconomics: IB Economics | Scoop.it
From www.bbc.co.uk - March 11, 10:29 PM
It comes as Iranian attacks on ships intensify in the crucial Strait of Hormuz waterway.
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Graham Watson's insight:

More Iran/oil price related news, with concerns about the viability of shipping via the Strait of Hormuz, and in spite of IEA agreement to release up to 400 million barrels of oil from strategic reserves, oil prices have risen this morning. It implies a longer period of disruption to global supplies and higher fuel prices at the pump. 

 

(Again, I note that the price of a litre of fuel has reached 138.9p at the garage I pass on the way to school, up nearly 10p since the conflict started. 

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March 12, 4:10 AM
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Countries agree to record release of emergency oil reserves as prices surge

Countries agree to record release of emergency oil reserves as prices surge | Microeconomics: IB Economics | Scoop.it
From www.bbc.co.uk - March 11, 7:34 AM
The G7 group of nations welcomes the idea of releasing oil in response to the surge in prices since the US-Israel war with Iran began
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Graham Watson's insight:

Lots of starting points - D&S, buffer stocks, the impact of oil prices on the global economy, PED and PES...the world's your lobster.

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March 10, 11:41 AM
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Scrapping North Sea windfall tax would not reduce UK energy bills, say experts | Fossil fuels | The Guardian

Scrapping North Sea windfall tax would not reduce UK energy bills, say experts | Fossil fuels | The Guardian | Microeconomics: IB Economics | Scoop.it
From www.theguardian.com - March 10, 5:39 AM
Rachel Reeves said to be considering levy cuts for oil and gas firms, but economists say this would just fatten profits
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Graham Watson's insight:

The current windfall tax on North Sea fossil fuel producers has been in the spotlight, with the Conservatives calling for its withdrawal in the wake of the Iran conflict. However, this Guardian article suggests that this wouldn't affect oil prices because of the nature of the tax. This is because it is a tax on profit, not a tax per unit of output, and so they cannot pass it on to consumers. 

 

Equally, the notion that its removal is going to unlock investment in the sector is also fanciful according to Alex Chapman, a senior economist at the New Economics Foundation. He suggests that higher prices are going to generate higher profits and it is these that should be used to invest in the sector rather than comparatively small tax breaks. 

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March 9, 6:22 AM
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Asia governments to cap fuel prices as oil costs jump

Asia governments to cap fuel prices as oil costs jump | Microeconomics: IB Economics | Scoop.it
From www.bbc.co.uk - March 9, 5:44 AM

The price of crude has surged above $100 on concerns about shortages due to supply disruptions.

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Graham Watson's insight:

Asian governments have already started reacting to higher energy prices by a variety of methods. South Korea has already announced that it will adopt a maximum price for fuel products, and Thailand has followed suit for the next 15 days in the diesel market, whereas Vietnam has scrapped import duties on fuel.

 

Elsewhere, Filipino public offices are going to run a four-day working week and Bangladesh has closed its universities to temporarily save fuel.

 

It will be interesting to see what the developed world, via the meeting of G& finance minister agrees later today. 

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