The Terms of trade refer to the relative price of exports/imports. A decline in the terms of trade means the price of exports falls relative to imports. Imports become more expensive. Typically a country will have lower living standards and less ability to import. Impact of decline in terms of trade on a developing economy …
The Brexit vote has led to sharp fall in the value of the Pound, at one stage falling to £1 = $1.22 – a fall of over 15%. This will have a significant impact on British firms, consumers and also those outside Europe. In short: Winners from weak Pound UK exporters who will be more …
Price discrimination involves charging different prices to different sets of consumers for the same good. Firms can charge different prices depending on several criteria: Quantity bought (e.g. lower unit price when higher quantity is bought) Time of use (higher price at peak times) Age profile (e.g. discounts for OAPs) When unit is bought (e.g. discounts …
Cinema admissions in UK 1935-2011 In the 1930s, the cinema was one of the main forms of entertainment in the UK. During the war years, and post-war austerity of the 1940s, cinema-going reached a peak at over 1.64 billion admissions in 1946. After this postwar peak, there was a gradual decline in the 1950s, before …
All economic forecasts are subject to margins of error. This is because: There are many variables affecting the economy. For example, the role of shadow banking was largely ignored in 2007 forecasts but failed sub-prime mortgage debt had a much bigger impact on the wider economy than ever before. There is always a big element …
Oligopoly is a market structure in which a few firms dominate the industry; it is an industry with a five firm concentration ratio of greater than 50%. In Oligopoly, firms are interdependent; this means their decisions (price and output) depend upon how the other firms behave: Barriers to entry are likely to be a feature …
Should the government leave house prices to market forces, or actively intervene to prevent a house price crash? Arguments for intervention Falling House Prices Could cause a recession If house prices fall, it will cause significant problems for the UK economy. There will be a fall in consumer wealth, and declining house prices can lead …
Agriculture often appears to be one of the most difficult industries, frequently leading to some form of market failure. In the EU and US, agriculture is the most heavily subsidised industry, yet despite the cost of the subsidy it fails to address many issues relating to agriculture. Types of market failure in agriculture Volatile Prices …