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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April 29, 2018 10:20 AM
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Overhaul of planning rules ‘threatens to reduce supply of affordable housing’ | Society | The Guardian

Overhaul of planning rules ‘threatens to reduce supply of affordable housing’ | Society | The Guardian | Microeconomics: IB Economics | Scoop.it
Charity Shelter warns ministers new rules might let developers reduce commitments to cheaper forms of property
Graham Watson's insight:

A nice D&S perspective on a rethink of planning law, with Shelter suggesting that a re-classification of affordable housing is going to reduce the commitment to build cheaper property, with adverse effects for first-time, low income buyers. 

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April 29, 2018 9:38 AM
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Calls for £10bn-plus Sainsbury's-Asda deal to face competition probe

Calls for £10bn-plus Sainsbury's-Asda deal to face competition probe | Microeconomics: IB Economics | Scoop.it
Pressure is mounting on the competition watchdog to launch an investigation into a potential £10bn-plus tie up between Sainsbury’s and Asda amid fears customers could be left worse off.
Graham Watson's insight:

The Telegraph summarises the reaction to the proposed Sainsburys-Asda deal. Lots of people are already keen for the Competition and Markets Authority (CMA) to intervene. 

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April 27, 2018 9:17 AM
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The battle for Sky: what next for Murdoch, Comcast and Disney? | Business | The Guardian

The battle for Sky: what next for Murdoch, Comcast and Disney? | Business | The Guardian | Microeconomics: IB Economics | Scoop.it
US firm Comcast’s £21.5bn rival bid is expected to spark a complex game of cat and mouse
Graham Watson's insight:

The Guardian dissects the Comcast - 20th Century Fox battle for Sky, noting that there are a number of issue that will determine the final outcome, not least Disney, who as part of the deal were going to be buying Fox.

 

Alles klar?

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April 27, 2018 3:11 AM
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Government mishandling of Southern rail and East Coast 'shows franchise model is broken'

Government mishandling of Southern rail and East Coast 'shows franchise model is broken' | Microeconomics: IB Economics | Scoop.it
The Government has been slammed by an influential committee of MPs over its “completely inadequate” handling of two major rail franchises amid fears it could be indicative of the “broken” privatised system.
Graham Watson's insight:

The Public Accounts Committee have suggested that the current state of the railways implies that the current franchising system isn't fit for purpose.

 

This view reflects the poor performance of the Southern and East Coast rail franchises.

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April 27, 2018 2:53 AM
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Sugar tax revolt: Meet the Ribena stockpilers

Sugar tax revolt: Meet the Ribena stockpilers | Microeconomics: IB Economics | Scoop.it
Some people hate the new Ribena so much, they've started to stockpile the last "classic" bottles.
Graham Watson's insight:

The sugar tax isn't universally popular, although it has had a marked effect upon the market for drinks. Indeed, even prior to its introduction soft drink manufacturers have taken steps to reduce the sugar content of their drinks, leading to some unusual consequences, such as the stock piling of 'original', high sugar versions of drinks such as Ribena and Irn Bru.

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April 26, 2018 2:00 PM
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Some praise our gig economy flexibility. I call it exploitation | Larry Elliott | Opinion | The Guardian

Some praise our gig economy flexibility. I call it exploitation | Larry Elliott | Opinion | The Guardian | Microeconomics: IB Economics | Scoop.it
The idea that workers on zero-hours workers contracts are happy is for the birds, says the Guardian columnist Larry Elliott
Graham Watson's insight:

Larry Elliott appears not to be a fan of the gig economy: he argues that it exploits workers and has increased in-work poverty. There's little to disprove this hypothesis, at present. I'm afraid that I don't buy the narrative that the majority of people on zero-hours contracts are grateful for this. 

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April 26, 2018 3:14 AM
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SSE-Npower merger could push up prices, competition body says

SSE-Npower merger could push up prices, competition body says | Microeconomics: IB Economics | Scoop.it
The competition watchdog says the planned merger of the two energy giants could face an in-depth inquiry.
Graham Watson's insight:

The Competition and Markets Authority (CMA) is unconvinced by the impact of an SSE-Npower merger on conusmers, such that it is preparing to launch an in-depth inquiry into the merger. 

 

The CMA argue that "The removal of...competition could therefore lead to higher prices for some customers," and they might well be right. 

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April 26, 2018 3:04 AM
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From Seattle to Luxembourg: how tax schemes shaped Amazon | Technology | The Guardian

From Seattle to Luxembourg: how tax schemes shaped Amazon | Technology | The Guardian | Microeconomics: IB Economics | Scoop.it
The retail giant’s critics say contrived financial arrangements are at the heart of its success
Graham Watson's insight:

The Guardian with more on Amazon, and this time it looks at the tax arrangements that have enabled the company to be so profitable. Various tax avoidance schemes are highlighted.

 

And yet, it begs the question as to why Jeff Bezos is lionised. Why as a society do we praise CEOs whose tax avoidance schemes effectively reduce the amount of money available to fund the provision of public goods? Are we more interested in low prices? 

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April 26, 2018 2:00 AM
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The cost of carbon emissions to double by 2021, say new forecasts

The cost of carbon emissions to double by 2021, say new forecasts | Microeconomics: IB Economics | Scoop.it
Europe’s carbon price is set to double in the next three years creating a major market push towards cleaner power and factories.
Graham Watson's insight:

I'm confused by the Telegraph's focus on climate change this week: however, it reports that the European carbon price is going to double in the next three years and this will push markets towards cleaner solutions. 

 

That said, as the article notes, the introduction of the carbon price hasn't had much traction so far, in part because a collapse in manufacturing output depressed carbon prices. But if they rise as much as is predicted, they will start to bite. 

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April 25, 2018 9:10 AM
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Some call it outsourcing. I call it spivvery | Aditya Chakrabortty | Opinion | The Guardian

Some call it outsourcing. I call it spivvery | Aditya Chakrabortty | Opinion | The Guardian | Microeconomics: IB Economics | Scoop.it
All over the country, rows over the likes of Capita threaten to be the Tories achilles heel at the local elections, says Guardian columnist Aditya Chakrabortty
Graham Watson's insight:

I just throw this out there - is this evidence of cutting edge, efficient labour markets in operation or 'spivvery' as Aditya Chakrabortty implies.

 

Ladies and gentlemen of the jury, I leave it to you to consider your verdict.

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April 25, 2018 9:02 AM
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Jeff Bezos v the world: why all companies fear 'death by Amazon' | Technology | The Guardian

Jeff Bezos v the world: why all companies fear 'death by Amazon' | Technology | The Guardian | Microeconomics: IB Economics | Scoop.it
With its profound knowledge of its customers, Amazon can move into almost any sector – striking fear into the hearts of rivals. And the $740bn company is ‘just getting started’
Graham Watson's insight:

The modern economy in a nutshell. The Guardian looks at the rise of Amazon and why other retailers fear it to such an extent.

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April 25, 2018 8:48 AM
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Shire recommends Takeda's revised £46bn takeover offer

Shire recommends Takeda's revised £46bn takeover offer | Microeconomics: IB Economics | Scoop.it
The improved bid comes after the Irish drugmaker rejected a series of offers from the Japanese firm.
Graham Watson's insight:

More horizontal integration with Shire recommending Takeda's improved offer. It represents the largest takeover by a Japanese firm.

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April 25, 2018 8:40 AM
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Viagogo faces legal action by competition watchdog

Viagogo faces legal action by competition watchdog | Microeconomics: IB Economics | Scoop.it
The reseller fails to give consumers better information about the tickets it sells on, the CMA says.
Graham Watson's insight:

Will the regulator show some teeth? The secondary ticketing site Viagogo has failed to fully comply with Competition and Markets Authority (CMA)  recommendations and is facing up to the fact that it might now face legal action.

 

This is a relatively rare turn of events, although the issue of reselling tickets is a vexed one. Do touts reduce or enhance efficiency in markets? There's more of a case to be made for the latter than you might think.

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April 29, 2018 9:59 AM
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Competition regulator likely to choke on Sainsbury's-Asda deal | Business | The Guardian

Competition regulator likely to choke on Sainsbury's-Asda deal | Business | The Guardian | Microeconomics: IB Economics | Scoop.it
CMA unlikely to swallow any of the arguments the two retailers make for merger
Graham Watson's insight:

More on the likely regulatory involvement of the Competition and Markets Authority (CMA) in any Sainsburys-Asda deal.

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April 29, 2018 9:27 AM
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Sainsbury's and Asda merger 'must be investigated'

Sainsbury's and Asda merger 'must be investigated' | Microeconomics: IB Economics | Scoop.it
UK competition watchdog is urged by politicians to probe a potential merger of Sainsbury's and Asda.
Graham Watson's insight:

The big story of the week - it has emerged that Sainsbury's and Asda are considering a merger, which is likely to create a £10bn grocery retailing giant.

 

This has lots of people in a flat spin - it would create the market leader with over 31% of the market, although it's likely that both brands are going to be maintained. However, there are concerns that it will give the merged firms localised monopoly power. It could be the biggest shake-up in the sector since Morrisons took over Safeway in 2004.

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April 27, 2018 9:04 AM
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Proportion of mums in work 'up 50% since mid-1970s'

Proportion of mums in work 'up 50% since mid-1970s' | Microeconomics: IB Economics | Scoop.it
But the increases have been largest among the partners of higher-earning men, says the IFS.
Graham Watson's insight:

Nice little snippet on changes in the nature of the UK labour market, with 50% more working mums than in the mid-1970s. The majority of that increase has come among partners of high-earning men. However, to what extent is that to be expected given the growth in female graduates since then?  

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April 27, 2018 3:05 AM
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'We are at the beginning of a revolution in healthcare'

'We are at the beginning of a revolution in healthcare' | Microeconomics: IB Economics | Scoop.it
Low-cost genetic testing coupled with health data analysis is promising to transform medicine.
Graham Watson's insight:

The extent of the gains from sequencing the human genome are investigated in this BBC article, with the cost of sequencing declining dramatically over the past 10 years. But has it generated commensurate wider gains?

 

The initial reaction is that this remarkable advance doesn't have many 'obvious' gains but the advances in medical knowledge are likely to have generated significant gains.

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April 27, 2018 2:50 AM
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Amazon's sales surge and profits double

Amazon's sales surge and profits double | Microeconomics: IB Economics | Scoop.it
The online retailer beat expectations with a 43% rise in revenues during the first quarter.
Graham Watson's insight:

More chance to reflect on profit. This time, Amazon have seen profits double. Proof of the efficiency of the company or the ability to exploit an imperfectly competitive market. 

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April 26, 2018 1:54 PM
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UK retailers 'will not suffer financial losses' from bottle deposit scheme | Environment | The Guardian

UK retailers 'will not suffer financial losses' from bottle deposit scheme | Environment | The Guardian | Microeconomics: IB Economics | Scoop.it
Analysis of a similar system in Norway shows no one will be out of pocket as long as bottles and cans are returned
Graham Watson's insight:

The Campaign to Protect Rural England has researched the effect of plastic bottle deposit schemes across Europe, noting their efficacy and their cost implications.

 

Samantha Harding, the litter director at CPRE has gone as far as to suggest that “This analysis of the deposit return system cycle should dispel any misconceptions that retailers or consumers may have about how the system will work, and more importantly how it is funded. No one will be out of pocket, so long as the bottles and cans are returned.”

 

However, cynics might suggest that she's got a vested interest in this. 

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April 26, 2018 3:07 AM
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UK supermarkets launch voluntary pledge to cut plastic packaging | Environment | The Guardian

UK supermarkets launch voluntary pledge to cut plastic packaging | Environment | The Guardian | Microeconomics: IB Economics | Scoop.it
Critics say retailers can pick and choose whether to sign up to Plastics Pact, a series of pledges that have no enforcement mechanism
Graham Watson's insight:

The Guardian on the supermarkets signing up to the UK Plastics Pact. It argues that it's little more than rhetoric, window dressing rather than a commitment to significant reductions in packaging.

 

There are some good details in here - not least the fact that the annual amount of plastic waste prioduced is equal to the weight of humanity.  

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April 26, 2018 2:04 AM
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Fine big companies which pay suppliers late, says small business tsar

Fine big companies which pay suppliers late, says small business tsar | Microeconomics: IB Economics | Scoop.it
Britain’s biggest companies should face significant fines if they persistently pay suppliers late, the Government’s small business tsar has insisted.
Graham Watson's insight:

The small business tsar, Paul Uppal, has argued that big firms who withhold payment from small suppliers should be fined. This represents an attempt to counter the monopsony power of the former. 

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April 26, 2018 1:46 AM
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Companies sign up to pledge to cut plastic pollution

Companies sign up to pledge to cut plastic pollution | Microeconomics: IB Economics | Scoop.it
More than 40 firms including Coca-Cola have promised to reduce harmful packaging.
Graham Watson's insight:

A serious attempt to cut waste or profit-maximising marketing activity to improve the brand? A number of leading companies have signed up to the UK Plastic Pact, promising to reduce plastic pollution.

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April 25, 2018 9:04 AM
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Bezos's empire: how Amazon became the world's biggest retailer | Technology | The Guardian

Bezos's empire: how Amazon became the world's biggest retailer | Technology | The Guardian | Microeconomics: IB Economics | Scoop.it
Amazon has shipped more than over 400 items second at its peak. How did it grow from bookseller to retail giant?
Graham Watson's insight:

Some great graphics on the growth of Amazon.

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April 25, 2018 9:00 AM
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Wind power giant Ørsted to charge up first major battery project

Wind power giant Ørsted to charge up first major battery project | Microeconomics: IB Economics | Scoop.it
One of the UK’s largest wind farm developers is preparing to charge up its first major battery storage project to help stabilise Britain’s power grid as more turbines begin to spin.
Graham Watson's insight:

The Danish company Otsted are diversifying into battery storage to complement their investment in wind energy, looking to capitalise on growth in the renewable energy market.

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April 25, 2018 8:46 AM
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Whitbread to spin off Costa chain as a separate firm

Whitbread to spin off Costa chain as a separate firm | Microeconomics: IB Economics | Scoop.it
Whitbread is to split off the UK's biggest coffee chain after pressure from activist investors.
Graham Watson's insight:

Another interesting microeconomic story that highlights some theory of the firm issues, in that shareholders appear to be holding Whitbread to account, and possible avenues for exploring the notion of diseconomies of scale, notably managerial, that may occur when businesses over-reach themselves.

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