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Ask Economics Question

You are welcome to ask questions on Economics. I will post the answer on this blog, for everyone to benefit from. I shall try to answer the economics question and / or point to other resources but please bear in mind. The replies will be guidance and not for duplication. Your essays should always be your own work. My speciality is economics for British A Level standard. My university economics is rusty in parts, because generally I don’t use it in teaching A level economics. I can’t guarantee to always give answers it also…

Olive Oil

Olive Oil

Should Govt intervene with minimum prices for goods like olive oil. Reasons for minimum price A minimum price ensures a minimum income for farmers. For example, if supply increased prices would fall significantly. Demand for agricultural goods is inelastic, therefore this makes prices more volatile Supply can vary due to weather conditions. i.e. agricultural markets are more prone to market failure than other markets. (more…)

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Olive Oil and Spanish Economy

How might a fall in production of olive oil affect Spanish economy. (8) Olive oil is an important commodity, therefore farmers are likely to see a fall in revenue because they have less to sell. Therefore, this also results in lower exports and less export revenue for the economy. However, the fall in production has increased price. Because demand is inelastic, this could actually increase the incomes of farmers, even though they have less to sell. (the % increase in price is bigger than than the % fall in quantity -…

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The Rise of Globalisation

Explaining the Growth in Globalisation Globalisation refers to the increased integration and interdependence of the world economy’s. These are some reasons to explain the growth of globalisation 1. Increase in Free Trade. Since the second world war, tariffs have generally been reduced. This has been encouraged through organisations such as the WTO. This has increased trade between different countries; this is an important factor in the process of globalisation. 2. Technology Technology has improved communication between different countries. Therefore, it has become easier to split up production on a global level. It is also…

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Has Opec Misused its power?

OPEC is the organisation for Oil Producing and Exporting Countries. OPEC tries to control the price of oil within a certain target price. Because demand is inelastic OPEC can increase the profits of its member countries by keeping prices high. Therefore, if prices start to fall below the target price, OPEC may set output quota’s to restrict supply and keep prices high. OPEC did this in 1973, when the price of oil was tripled in response to events in the middle east. This caused significant economic hardship in the West, who had…

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Criticisms of WTO

Readers Question: Has the WTO abused its power? The WTO is committed to improving free trade amongst its member countries. However, its role has been very controversial –  creating polarised views. These are some of the criticisms of the WTO Free Trade benefits developed countries more than developing countries. It is argued, developing countries need some trade protection to be able to develop new industries. The WTO have sought to maintain the same rules for developing countries preventing them from protecting new industries. (This is known as the infant…

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Does China Pose a Threat to the World Economy?

China recently became the second largest economy in the world. According to the IMF, in 2010, the Chinese economy was $5,878,257 million – second only to the US economy. If we use GDP at purchasing power parity, the size of the Chinese economy is estimated to be even larger, at around $10,119,896 million. However, it also has an enviable growth rate of close to 10%; at this rate of economic growth, China is forecast to become the dominant world economy within 10 or 20 years.   The rise of the Chinese…