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Microeconomics: IB Economics

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Today, 4:02 AM

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From www.bbc.co.uk - April 9, 1:20 PM

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This article - either with or without animations (and I can't see what on earth they add) highlights how the effects of a higher oil price resulting from the Iran war are filtering into other markets - notably the cost of food, foreign holidays and also the likely effect on the conduct on monetary policy.

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Economy

Microeconomics: IB Economics

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, 4:02 AM

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From www.bbc.co.uk - April 9, 1:20 PM

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April 9, 5:04 AM

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From www.theguardian.com - April 9, 12:00 AM

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The New Economic Foundation have come up with an interesting intervention in the energy market: provide all households with a set amount of subsidised energy, equivalent to two rooms' worth. This would reduce energy bills by around £160 on their annual bills but be progressive in that it represents a higher proportion of a low income household's spending than a richer household.

Of course, this has an opportunity cost, but the thinktank notes that the £4.5bn cost is equivalent to the forecast windfall taxes on oil and gas companies, so would, in effect be redistribution away from them in favour of households. It's an elegant bit of thinking.

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April 8, 2:52 PM

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‘We can’t increase prices any more’: UK hospitality firms hit by cost triple blow | Hospitality industry | The Guardian | Microeconomics: IB Economics | Scoop.it

From www.theguardian.com - April 8, 8:00 AM

Graham Watson's insight:

A nice hands on look at the reality of running a business, with a pub business highlighting how rising costs - National Insurance, the minimum wage, and energy bills - are affecting their ability to make profit. And they are adamant that the one thing that's not going to happen is prices going up - in their eyes, such a move would cost them, implying that the demand for pub food and drink at the current price point is elastic.

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April 6, 1:45 PM

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Thousands of small UK firms’ energy bills set to more than double due to Iran war | Small business | The Guardian | Microeconomics: IB Economics | Scoop.it

From www.theguardian.com - April 6, 6:00 AM

Graham Watson's insight:

The Federation of Small Businesses has reported that around 7% of its members getting their heating via heating oil and that their energy costs have doubled since the start of the Iran conflict. As a result, a number of them are already rationing consumption, and their costs have risen. And yet, unlike households, these companies are not eligible for government support.

Is that economically sensible? Well, much as I have sympathy for them, I would point out that risk is an essential part of running a business and that there are plenty of alternative fuel sources.

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April 2, 7:06 AM

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From www.theguardian.com - April 2, 5:58 AM

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The Guardian is reporting that Thames Water believes itself to be close to agreeing a deal with its creditors that will keep it out of state ownership, and stop it being renationalised. The precise terms of the deal are unclear but the company are hoping to avoid being fined by the regulator, OFWAT.

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April 2, 6:40 AM

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From www.bbc.co.uk - March 31, 7:01 PM

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Back at it; this is a standard minimum price - although in this case it's a wage floor, not a price floor. However, yesterday saw the minimum wage rise by 50p per hour to £12.71 for workers aged 21 and over, for 18 to 20 year olds it's now £10.85 and under 18s and apprentices will get £8 per hour.

The introduction of a minimum wage was feared because intuitively it should cost jobs, but there's relatively little evidence of this. However, perhaps this is because of the level at which it was initially set and many now think that it's starting to bite with some businesses suggesting that it is now costing jobs.

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March 27, 12:12 PM

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From www.bbc.co.uk - March 27, 8:36 AM

Graham Watson's insight:

I love this sort of article - the outrage of Asda boss, Allan Leighton, in response to government suggestions that petrol retailers might be price gouging, and profiteering at customers' expense. That's never happened, Allan.

There's no empirical evidence of that in any way shape or form, and there's no Competition and Markets Authority scrutiny of the petrol retailing sector in the wake of its response to the Ukraine war, nor would the market structure of the sector lend itself to this sort of behaviour.

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March 27, 4:34 AM

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Five firms including Autotrader and Just Eat investigated over fake review failings | Competition and Markets Authority | The Guardian | Microeconomics: IB Economics | Scoop.it

From www.theguardian.com - March 27, 4:01 AM

Graham Watson's insight:

This article highlights the importance of perfect information to the efficient functioning of markets and the Competition and Markets Authority's concerns about the extent to which five firms are failing to tackle fake reviews. The firms named include Autotrader, JustEast, funeral services operator Dignity, the review company Feefo and the restaurant chain Pasta Evangelists.

In all cases, there's a suggestion that reviews have been doctored - either excluding 1-star reviews or getting staff to write inflated reviews. It's clearly attempting to manipulate the market and act against consumers' interests.

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March 26, 4:23 AM

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From www.bbc.co.uk - March 25, 8:00 PM

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Another Iran-based story, with the conflict increasing the demand for solar panels according to the CEO of Octopus Energy, Greg Jackson. Apparently, sales are up 50% since the conflict began.

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March 25, 4:15 AM

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From www.bbc.co.uk - March 24, 9:35 PM

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Geopolitics and the oil price. Again. D&S.

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March 24, 4:35 AM

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From www.theguardian.com - March 23, 8:01 PM

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Whilst the government is bringing in new regulations to limit the amount of carbon produce by new homes from 2028, there's a degree of discontent at the fact that they've relaxed rules on one or two aspects of new homes, not least the issue of whether or not they should all be fitted with heat pumps. As ever, trade-offs are involved with critics suggesting that developers pursuit of profit trumps environmental objectives.

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March 24, 4:30 AM

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Japan to begin biggest-ever oil release from national reserves as Middle East energy crisis bites | Japan | The Guardian | Microeconomics: IB Economics | Scoop.it

From www.theguardian.com - March 24, 12:36 AM

Graham Watson's insight:

Japanese PM Sanae Takaichi has announced the release of 80m barrels of oil from national reserves to try and calm Japanese energy markets and keep fuel prices low. Total Japanese reserves were 470m barrels. so whilst there's no immediate need to panic, it's worth bearing in mind that Japan is resource-poor and reliant upon the Middle East for 90% of its energy needs.

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March 24, 4:22 AM

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From www.bbc.co.uk - March 23, 8:31 PM

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Economics is all about incentives - so one wonders why oil and natural gas producers are currently so keen to get more of the stuff out of the ground?

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April 9, 11:20 AM

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From www.theguardian.com - April 9, 8:45 AM

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The rise of the discounters continues unabated, with Lidl GB announcing that it is going to continue to add to its stores, with another 50 UK stores going to open this year.

This then begs the question as to whether the aim of Lidl is profit maximization, or is it revenue, sales or market share maximization? Given ongoing uncertainty, low levels of consumer confidence and subdued growth, the implied YED of shopping at Lidl would imply that this is likely to be successful.

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April 9, 4:59 AM

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From www.bbc.co.uk - April 8, 7:03 PM

Graham Watson's insight:

Today's big domestic story seems to be the implications of higher oil prices for farmers and, by definition, food prices in the UK. The demand for oil is a derived demand for lots of different things, fuel and fertiliser, for two.

Independent research suggests that farmers' costs went up by 7% last month, which is damaging not least because for many of them, there are pre-agreed contracts, which mean that they have to absorb higher costs.

However, more broadly the expectation is that food price inflation will reach around 10% this year.

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April 7, 8:51 AM

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From www.bbc.co.uk - April 7, 6:06 AM

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There's the possibility of a massive takeover in the music industry, with investment vehicle, Pershing Square, offering $64bn to takeover Universal Music Group. It doesn't seem as though there's much rhyme or reason to the offer, other than the fact that its Chief Executive thinks that UMG is currently undervalued.

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April 6, 4:44 AM

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From www.bbc.co.uk - April 5, 9:09 PM

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Yet more uncertainty in the oil market, with oil prices rising a game on the back of President's remarkable outburst yesterday.

Uncertainty is not good for any market, not least the oil market.

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April 2, 6:47 AM

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From www.bbc.co.uk - April 1, 4:15 AM

Graham Watson's insight:

Estate agents are on the point of taking Rightmove to court, arguing that the online property portal is abusing a dominant position, something that's likely to attract Competition and Market Authority attention.

Certainly, Rightmove have monopoly power: the company's own research highlights that it has an 80% share of the online property market in terms of time spent in its website. It also has a 70% profit margin which implies it has the ability to earn abnormal profits too, its charges have risen dramatically and its brand name also represents a sizeable barrier to entry,

In short, watch this space - is it simply in the position because it's efficient or is it exploiting its monopoly.

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March 27, 12:43 PM

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Governments controlling prices? It has long been unthinkable – but may now be inevitable | Andy Beckett | The Guardian | Microeconomics: IB Economics | Scoop.it

From www.theguardian.com - March 27, 4:00 AM

Graham Watson's insight:

Guardian columnist, Andy Beckett, presumably taking a break from selling Socialist Worker on Regent Street, makes the case for the government directly intervening in markets to set maximum prices.

He points to the examples of Mexico and Spain where successive governments have been more interventionist. In Mexico, apparently, the government has capped the price of 24 essential goods, although he hasn't said anything about the availability or quality of such goods. Similarly, Spain's centre-left government has already introduced a national rent freeze and established a body to be known as the Business Margins Observatory to oversee markets and deter profiteering.

I wonder if you could both make a case for such interventions, and, a similar case for opposing them? Think in terms of the effect on economic efficiency, and the opportunity cost of such interventions.

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March 27, 4:42 AM

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From www.theguardian.com - March 27, 2:00 AM

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The question of whether or not the net effect of disposable vapes. Clearly they play a role in reducing the number of smokers, although the evidence of any negative externalities from vaping hasn't emerged to the same degree. Where there is a stronger body of evidence is about the negative externalities generated by the waste created, with 6m vapes and pods discarded weekly in the UK, and that represents a 23% fall on 2025.

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March 26, 10:56 AM

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From www.theguardian.com - March 26, 7:49 AM

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Evidence of the extent to which the UK's water companies are responsible for generating negative externalities, with news that there were nearly 300,000 sewage pollution incidents last year, albeit that's a reduction on the previous year. The companies will claim that they are investing record amounts into stopping this sort of thing; however, if I were caught emptying my rubbish bins into your garden I'd be liable for criminal prosecution.

Economics is all about incentives, and yes, I accept that the equilibrium level of sewage spills isn't zero; it occurs where the marginal cost of investment in the sewage network equals the marginal benefit. However, stiffer penalties for water company executives would focus the mind slightly more, I feel.

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March 26, 4:22 AM

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From www.bbc.co.uk - March 25, 9:51 PM

Graham Watson's insight:

Is this the first Iran-induced government intervention? The government is investing £100m in a Teesside site manufacturing carbon dioxide, a key part of fertiliser and food and drink manufacturing.

It's thought to be a response to the closure of the Strait of Hormuz and the possibility of ongoing shortages of fertiliser.

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March 24, 2:14 PM

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From www.bbc.co.uk - August 6, 2021 2:15 AM

Graham Watson's insight:

You could look at this from a number of angles, derived demand, the impact of the price cap - or the Energy Price Guarantee if you prefer, or, you could just consider the implications of higher energy costs for the wider macroeconomy. The choice is yours!

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March 24, 4:32 AM

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From www.theguardian.com - March 23, 8:01 PM

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At last, a break from oil-related D&S stories: good news for domestic wine production. Last summer saw a bumper harvest for English and Welsh winemakers, and presumably this might even see prices fall.

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March 24, 4:26 AM

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From www.bbc.co.uk - March 24, 3:20 AM

Graham Watson's insight:

The Competition and Markets Authority (CMA) have ruled that vets' prescription charges will be capped at £21, and that all vets must publish price lists for the treatments and make customers aware that cheaper treatments might be available online. It's all part of an attempt to increase transparency in the sector in the wake of allegations of overcharging.

Of course, the sector itself, increasingly owned by private equity companies, denies that it's overcharging but you only have to look at what's happened to veterinary bills relative to inflation in the past decade.

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Microeconomics: IB Economics

How holidays, food and clothes soon cost you more - despite the Iran ceasefire - BBC

Give all UK households a set amount of subsidised energy, says thinktank | Energy industry | The Guardian

‘We can’t increase prices any more’: UK hospitality firms hit by cost triple blow | Hospitality industry | The Guardian

Thousands of small UK firms’ energy bills set to more than double due to Iran war | Small business | The Guardian

Thames Water ‘close to deal that would spare it new Ofwat fines until 2030’ | Thames Water | The Guardian

Minimum wage rises to £12.71 an hour as firms warn of impact

Petrol price above 150p a litre for first time in nearly two years

Five firms including Autotrader and Just Eat investigated over fake review failings | Competition and Markets Authority | The Guardian

Octopus Energy boss: We've seen a 50% rise in solar panel sales since start of war in Iran

Oil price falls as Trump talks up Iran peace negotiations

Ministers delay new rules for low-carbon housing in England | Energy efficiency | The Guardian

Japan to begin biggest-ever oil release from national reserves as Middle East energy crisis bites | Japan | The Guardian

UK must back North Sea oil and gas drilling, says trade body

Lidl to open 50 UK stores in year ahead as part of £600m expansion plans | Lidl | The Guardian

'Even if Iran war ends now farmers costs will have to be passed on'

Universal Music Group gets $64bn takeover offer from Bill Ackman's Pershing Square

Oil prices choppy after expletive-laden Trump threat to Iran

Estate agents accuse Rightmove of charging excessive fees

Governments controlling prices? It has long been unthinkable – but may now be inevitable | Andy Beckett | The Guardian

More than 6m vapes and pods discarded weekly in UK despite single-use ban, study finds | Vaping | The Guardian

Sewage released into England’s rivers and seas nearly 300,000 times last year | Water | The Guardian

Government to reopen CO2 plant in Iran war contingency plan

Energy bills: What is happening to gas and electricity prices?

English and Welsh winemakers report sharp rise in production in 2025 | Food & drink industry | The Guardian

Vet prescription fees to be capped at £21