The Spanish economy is facing many difficult challenges. Housing Boom and Bust. Despite a relatively prudent banking sector, Spain experienced a real boom in the housing market. This was partly caused by foreign demand for holiday homes. House prices rose and there was also a boom in construction. Construction accounted for a large part of …
Has the internet made price discrimination more difficult or easier? Price discrimination is charging different prices to different groups of consumers for the same good. Price discrimination requires that firms Can separate markets into different distinct groups Groups have different elasticities of demand The firm can prevent resale The costs of separating markets are less …
It is difficult to predict the dollar because there are few different factors pulling the dollar in different directions. Firstly, the dollar has been surprisingly resilient since the US slipped into its worst recession and US interest rates tumbled to near 0%. The resilience of the dollar is not based on economic fundamentals but, a …
The price of a small (illogically called the ‘Tall’) Starbucks Cappuccino is now £2.05. The Venti now costs £2.65 (2008 prices) This year the price of Starbucks drinks have increased by more than the rate of inflation. Costa Coffe and Cafe Nero have both kept their prices below £2, but, industry analysts argue that it …
After several years of rapid growth, 2009, will prove a testing year for India. Inflation Inflation continues to pose a threat. Inflation peaked at 12% in early August ’08. Inflation, is being caused by rapid growth (demand pull factors) but, also the cost push inflation factors (rising oil prices). Hopefully, the fall in oil prices …
Readers Question. Could you give any more information on how you think consumer buying habits will be affected by the credit crunch moving into 2009. Obviously people are spending less nowadays and tightening their purse strings. Will this continue into 2009? Will we see the birth of a new type of savvy consumer who knows …
A report by the European Union EU, found that on average UK car prices were 10% higher than in EU. In some cases, the difference in price could be much greater. Some people have taken advantage of this price difference to buy a new car on the continent. [BBC report] OCR exam question: Discuss factors …
Readers Question “Evaluate the argument that further measures to reduce inequality may have adverse consequences for work incentives ” Measures to reduce inequality include, progressive taxes, means tested benefits and higher minimum wages 1. Higher Income Tax. Increasing the highest rate of income tax from 40% to 50% will make work and overtime less attractive …