Task 1

I have a roof that is in need of some repair work. Some of the tiles are loose and a number of them are broken. It is a job that I am capable of doing myself, but time is a problem. I have contacted a roofing firm who have given me a quote of £600 to do the job. They think it will take them two days. If I did it myself it would take me at least three days spread over a couple of weekends. In those three days I could write some articles for publication that would generate £700. Using one of the appropriate items from 'What economists know' advise me whether I should do it myself or hire the services of the roofing firm.

Should I get up on the roof and fix the problem or is it more advisable to pay for someone else to do it for me? Copyright: Ana Fernandez, from stock.xchng.

Task 2

The Mayor of London, Ken Livingstone, has announced plans to levy a higher charge on drivers of 4 x4 vehicles, so called 'Chelsea Tractors', who enter the new extended congestion charging zone in the Capital. The mayor wants the new £25 charge to be in place by 2009/2010. The charge would be three times the amount paid by drivers of non 4 x 4 vehicles. Is this a fair policy?

Image copyright: Alain Varie, from stock.xchng. See the article 'End of the road: 4x4s targeted by £25 congestion super-charge' from the Guardian for further information about this.

Task 3

A firm has approached a consultant to help it understand what is happening to its sales. The firm supplies milk to a firm that produces dairy products such as yoghurts and cheese. The manufacturer of these dairy products has estimated that the price elasticity of demand for its products in relatively inelastic and has decided to raise its prices by 5%. The milk supplier is at a loss to understand why the price it is receiving from the dairy products manufacturer has gone down but its sales have also fallen. Provide an explanation to the milk supplier why this might be the case.

Task 4

It has been announced that the cost of building the facilities for the Olympic Games in 2012 is likely to rise above the £2.4 billion initially budgeted for in the submission to the IOC (International Olympic Committee). Opponents of the Games are pointing to the waste of money that this involves. Estimates are now suggesting that the actual cost of staging the Games will be in excess of £5 billion.

Image copyright: Stefano Barni, from stock.xchng.

Is staging the Olympic Games a 'waste of money'?

Task 5

It is coming up to February half term and a family are looking to book a holiday abroad. They want to go skiing. In the week before and the week after half term prices for skiing holidays and the flights are half of that which are advertised during the half term week itself. The family are discussing this and dad complains that it is simply a case of holiday companies and airlines exploiting the consumer. "The government ought to pass a law preventing these parasites from exploiting ordinary people who just want a break after weeks of working hard" he complains. As a student of economics, comment on the view that dad has made.

Snowboarding holidays: illegally expensive? Copyright: Gary Cowles, from stock.xchng.

Task 6

The farming community in the UK have been facing hard times in recent years. There are plenty of reports that show the number of farmers in the UK is diminishing. Representatives of the faming community are warning that there is a serious risk of long term damage to food production in the UK unless measures are taken to help support farmers. 'People want good quality food but are just not prepared to pay for it,' they have complained. They point to the fact that agriculture now only accounts for around 1.5% of GDP, whereas in the early 1980s it accounted for over 2.0% of GDP.

Image copyright: Benjamin Earwicker, from stock.xchng.

Should farmers in the UK continue to receive support to provide the food that we all eat?

Task 7

The dominance of China in manufacturing is putting jobs in the UK at risk. The main reason often put forward is that Chinese workers have lower wages than those in the UK and as a result their products are significantly more competitive than UK manufactured goods. If this is allowed to carry on unchecked, the UK will not have any manufacturing base to speak of. What is needed is some hefty import tariffs to divert demand to UK produced manufactured goods.

To what extent would you agree with this view?

Image copyright: Kostya Kis, from stock.xchng.

Task 8

Every day, millions of Britons face lengthy delays on Britain's roads as a result of congestion. Not only that but the problems caused by the increasing use of cars is contributing to the problem of climate change not to mention the costs to the health service in treating people injured in road accidents and the cost of policing Britain's roads. Everyone agrees something needs to be done about it. The government have outlined plans in the 2006 Queen's Speech to set up pilot schemes to trial the idea of road pricing. Road pricing schemes could benefit the UK economy to the tune of £28 billion. Pilot schemes will run in some major cities in the UK including Birmingham and Manchester in the next five years. Road users are not impressed. They believe that they already contribute huge amounts in tax to the government through vehicle excise duty and petrol duties. This is just another 'bash the defenceless motorist' they say.

The future of the UK's traffic system, with road pricing or without - according to a report by Sir Rod Eddington. Source: Crown Copyright [PDF, 2.04MB]

Are motorists right to be angry at the proposals for road pricing?