Archive for February, 2011
Price Discrimination
Feb 28th
The first video in this post goes to a student. Komilla (CuteChadz)has produced a very professional looking summary and it is well worth a look:
pajholden does price discrimination
richardmckenzie gives us two videos:
Click here to see a Reffonomics interactive presentation on price discrimination.
For a bit of fun, view the scene from the Monty Python film ‘Life of Brian’ where confusing haggling (first price discrimnation) takes place – click here.
The World According to Facebook
Feb 24th
(Click on the image for original version).
I have only just come across this image, reported on by the BBC last December, based on a blog post by a Facebook intern. It has been produced using actual Facebook data. Each line links pairs of ‘friends’. Brighter lines indicate more ‘friends’ between two given cities.
The dark spaces, where Facebook connections are relatively absent, are as interesting to note as the bright areas where the number one social networking site has proliferated.
It calls to mind the now classic image of the Earth’s lights at night based on NASA satellite imagery, although Eastern China and Western Russia, for example, are far more luminous in that particular image …
(Click on image for original version. Source: NASA)
Oligopoly
Feb 21st
IB Syllabus requirements:
• Assumptions of the model
• Collusive and non-collusive oligopoly
• Cartels
• Kinked demand curve as one model to describe interdependent behaviour
• Importance of non-price competition
• Theory of contestable markets
BrynJonesOnline introduces the theory before moving onto Kinked Demand Theory:
Cartels
This helpful video is by richardmckenzie
Non Collusion – Kinked Demand Theory:
An animated slideshow on oligopoly focuses on kinked demand theory (from the excellent Reffonomics ).
The above introduces the ‘kink’ (by ACDCLeadership). The below is by pajholden and goes into more detail:
kinked demand curve theory (click on the link to view)
The kinked demand theory can be extended to show how such a non-collusive oligopolistic firm makes a loss, makes a profit or breaks even (again from the excellent Reffonomics ).
Theory of Contestable Markets
pajholden discusses the theory in his back garden: contestable market theory
economicslessons has produced this video geared towards A Level economics (so the example question at the end is not an IB one):
Extra:
On the interdependency of firms, we should consider John Nash who arrived at the theory of a Nash Equilibrium in which members of a group would serve their own interests by also serving the rest of the group’s interests (as opposed to Adam Smith’s contention that individuals (or firms) will strive to serve their own interests only). This idea was captured in the excellent film A Beautiful Mind and the relevant excerpt can be seen by clicking here.
On the difficulty of drawing a line between monopolistic competition and oligopoly, view this slideshow by Reffonomics.
Finally, for a bit of fun, see how a famous condom manufacturer has approached non-price competition through the power of advertising by clicking here.
Developed and Developing Economies – Online Resources and Revision Materials
Feb 21st
The full title of this section from the IGCSE syllabus is:
‘Developed and developing economies: trends in production, population and living standards’
Image: Some rights reserved by souravdas
Here is what the syllabus requires of us:
Candidates should be able to:
• describe why some countries are classified as developed and others are not;
• recognise and discuss policies to alleviate poverty;
• describe the factors that affect population growth (birth rate, death rate, fertility rate, net migration) and discuss reasons for the different rates of growth in different countries;
• analyse the problems and consequences of these population changes for countries at different stages of development;
• describe the effects of changing size and structure of population on an economy;
• discuss differences in living standards within countries and between countries, both developed and
developing.
There is a lot of overlap between this section of IGCSE Economics syllabus and the Geography (I)GCSE – if you are studying that subject, you will be able to use some of your Geography notes and resources too. Some of the websites given below are Geography revision pages.
Some rights reserved by godwin d
a) describe why some countries are classified as developed and others are not;
Quite a detailed, interactive site: http://bbc.in/hZmNJh
Note: development is bigger than economci growth. Think of economic growth as a key ingredient of development, a sub set of development. This video by geographyalltheway shows us that development can mean a lot of things:
b) recognise and discuss policies to alleviate poverty;
Aid
Fair Trade
mobiuslive posted an excerpt video from eq.tv on fair trade:
And DiagramConsultores gives us this video on Fair Trade in the Domincan Republic:
Microfinance
Video from Opportunity International:
WorldBank provides an example from Mauritania:
c) describe the factors that affect population growth (birth rate, death rate, fertility rate, net migration)
Image: Some rights reserved by Aidan Jones
d) discuss reasons for the different rates of growth in different countries;
e) analyse the problems and consequences of these population changes for countries at different stages of development;
cheergalsal offers this summary of the Demographic Transition Model:
And geographyalltheway gives us this animated explanation:
http://bbc.in/htA601– and follow the links to the pages that follow this first one
Test your understanding here: http://bit.ly/g9Spcs
f) describe the effects of changing size and structure of population on an economy;
g) discuss differences in living standards within countries and between countries, both developed and developing.
Source: http://www.mint.com/blog/trends/mint-map-global-wealth-distribution/
Monopolistic Competition
Feb 8th
Here is the IB syllabus requirement for this sub-topic:
Monopolistic competition
• Assumptions of the model
• Short-run and long-run equilibrium
• Product differentiation
• Efficiency in monopolistic competition
From www.reffonomics.com a useful introductory slide on calculating price and quantity under monopolistic competition scenario:
Which then leads to finding profit (from the same site, www.reffonomics.com) :
One that is earning a loss:
And one breaking even:
You can access all the resources here: Microeconomics by Dick Brunelle and Steven Reff – full credit to these industrious authors of the presentations above.
From http://highered.mcgraw-hill.com (McConnell Brue Economics) we have a useful interactive graph to explore with appropriate questions to solve – click on the image or title below
Now some video resources:
econsteve12 has given us three parts:
pajholden provides this video: click here
richardmckenzie offers this video:
And finally here is ACDCLeadership’s 60 seconds’ worth:
Development Economics TED Talks
Feb 4th
Here is a selection of TED talk videos which should help when studying Development Economics, and help to provide fresh and sometimes unusual perspectives on the topic. A suggested way of making use of these for your studies is to watch an entire video and summarise its key points in 100 words or under. This is no easy task as there will be lots to say, so you have to select what you think were the key / most interesting points. It is also good to include example detail (regions / countries / place names, dates, and figures) as good examples always help to boost your understanding of development.
Monopoly
Feb 1st
The IB syllabus requirements for this sub-topic are to understand:
- Assumptions of the model
- Sources of monopoly power/barriers to entry
- Natural monopoly
- Demand curve facing the monopolist
- Profit-maximizing level of output
- Advantages and disadvantages of monopoly in comparison with perfect competition
- Efficiency in monopoly
Here are a selection of useful resources to further your understanding of the above.
Two very good presentations on monopolies courtesy of http://www.reffonomics.com:
Above Video Source: mjmfoodie
