Bellerbys Economics - Mr Stephenson

Tuesday, November 28, 2006

Past Papers & Mark Schemes

For those students building up to the exams in January, you can find all the past papers and mark schemes here:

Good luck!

Sunday, November 26, 2006

American Economics Classroom

Students at Bellerbys will be familiar with our use of the Economics platforms from websites in the UK such as and, but you might also be interested to know that there are similar websites in the USA.

One of the best of these is:

Here you can find many sample lessons related to Economic teaching up to grade 20 (grade 12 is about A-level). For example, here's one on the future of the Chinese economy:

But Econedlink has rivals - competition! - and one of the best of these is Ecedweb - which can be found here:

And a third is e-connections. A sample lesson on widget production can be seen here:

So there you have it - free Economics lessons to support your education wherever and whenever you want them - you need never be bored with nothing to do again!

Thursday, November 23, 2006

China - An Econocracy?

Since 1989, the Chinese leadership has pursued a relentless drive for economic growth. Political issues have been put on the back-burner for the moment, though it is likely that these will become more important once again as Chinese influence in world politics increases.

Meanwhile, I have invented a new word for China - an econocracy - a society where economic efficiency takes priority over other all other policy decisions during the development phase of the economy. You can read my complete paper on this in a new economics journal early next year. Perhaps India is now also passing through the same phase.

More evidence of this can be seen in this week's new trade deal between China and India. The two countries have long-standing differences over political issues - but these have been put to one side for the moment - as both countries work hard to establish themselves in the world economy.

On most indicators, China has a comparative advantage over India in most fields at the moment but as we ll know from Modules 2 & 6, this doesn't mean that they can't both benefit from further specialisation and trade - and this is the key component of the new agreement. Easier access to Chinese manufactured products will boost the Indian economy as well as increasing the export market for India. Meanwhile, India's vast pool of cheap (compared to China) English-speaking labour provides extra possibilities for investment for Chinese business people. India's main area of absolute advantage, however, IT and software development, has a number of businesses keen to invest in China's rapidly developing electronics sector.

Trade between China and India is now expected to double by 2010. The deal also brings India closer to ASEAN, which China is set to join in 2010. Together, China and India represent 35% of the world's population and as their economies grow, we will continue to see a shift of economic and political influence towards South and East Asia.

NOTE: Any students now revising for the January exams who would like a complete set of revision notes for the module they are taking should send me an email and I will send it in reply.

Wednesday, November 22, 2006

Black Gold - No, Not Texas Tea!

There's another excellent movie circulating at the moment that will help you to pass the time between now and that commercial trap we call Christmas - it's called 'Black Gold'. It's perfect for Module 1 revision.

Multinational coffee companies dominate the coffee industry which is worth over $80 billion, making coffee the second most valuable trading commodity in the world after oil.

However, whilst we continue to pay ridiculous prices for the equivalent of two beans in a cup in Starbucks or Coffee Republic, the price paid to coffee farmers remains so low that many have been forced to abandon their coffee fields.

This is because of what economists sometimes call the agricultural paradigm. The more farmers who are encouraged to produce cash crops like coffee - often to help pay off the international debts of their governments - and the more efficient they become at it, the more that supply increases. As the supply curve shifts to the right, the price falls and falls until the equilibrium point is reached at subsistence level. Many farmers see no hope for the future and simply give up.

Of course, there are ways to overcome the problem - agricultural policies, buffer stock systems and so on - but many governments don't have the money or the organisational skill to run these.

What happens when the farmers give up? Well, most of them will migrate to the local city. In theory this might not be so bad if their labour could be used productively - adding value by providing work in factories or in infrastructure products - as in the Lewis Theory of Development (Module 6) - but in practice, this often doesn't happen. They may end up living in shanty towns, scratching around for odd jobs in areas where they have no specific skills (productive and allocative inefficiency), sometimes filling their time on the margins of the black economy (module 6) - crime, drug-running and so on.

The film, which has been heavily criticised by Starbucks, focusses on Tadesse Meskela from Ethiopia - a man on a mission. He is trying to save 74,000 struggling coffee farmers from bankruptcy in his home region. As his farmers strive to harvest some of the highest quality coffee beans on the international market, Tadesse travels the world in an attempt to find buyers willing to pay a fair price. It doesn't sound very promising as a movie - but believe me it's as gripping as any thriller.

Against the backdrop of Tadesse's journey to London and Seattle, the enormous power of the four multinational companies that dominate the world's coffee trade becomes apparent. They form a classic oligopsony extracting abnormal profits from both the suppliers and the consumers. New York commodity traders, the international coffee exchanges, and the double dealings of trade ministers at the World Trade Organisation reveal the many challenges Tadesse faces in his quest for a long term solution for his farmers.

As always, you should analyse economic movies in a critical way - how good is the economics in the movie, what are the benefits and the costs to each of the stakeholders from the situation described, what opportunities exist for increasing economic efficiency and so on - but believe me, you will never be bored by this movie - and the next time you drink a cup of coffee, you will think carefully about the long chain of events that brought those two beans to your cup.

The directors are Marc and Nick Francis.

Tuesday, November 21, 2006

An Inconvenient Truth

Those of you now about to embark on Module 3 - either for the first time or as part of your revision for January exams, would do well to see the Al Gore's (former Vice-President of the USA) movie, 'An Inconvenient Truth'

This explores in ninety minutes all the issues relevant to global warming in a very accessible way. As this is the topic that occurs most often in Module 3 papers, it would be a very sensible investment to have a look at the film at a cinema near you - or perhaps get it on DVD from Amazon or eBay. It's not released in the UK until Dec. 26th - but it's possible to buy it from the States over the net already.

The department will of course get a copy in due course but that may be too late for January.

Amazon and eBay, by the way, are an interesting example of what we were talking about in some classes recently about Choice Theory. Despite the fact the barriers to entry to creating at least a functional auction site are low (or at least low for a business with some money like Virgin or Tesco), nearly everyone gravitates towards eBay and Amazon - in a free market too much choice can lead to loss of efficiency - people seem to know that instinctively - except my wife when she goes shopping for shoes, of course.

You can find the top list of auction sites here:

And here's some more information on Choice Theory - rapidly becoming a big topic in universities, not just because of the way it applies to humans, but also to the way it applies to corporations and governments. One of the most interesting areas is where the best interests of corporations and governments may conflict with the best interests of the consumer and producer - and what we should do about that.

Sunday, November 19, 2006

Three Chinese Billionnaires

The new Forbes list shows three Chinese billionnaires - the country's first.

The richest man in China appears to be the head of Gome appliances - Huang Guangyu - worth £1.2bn. Guangyu is closely followed by property developer Xu Rongmao and then by Hong Kong's Larry Rong Zhijian.

You can find out more here:

With the rapidly growing number of billionnaires and millionnaires in China, some businesses are cashing in. One of the most interesting is China's love boat where lonely millionnaires can find a wife to help them count their money. It sails from Shanghai next year. Find out more here:

Saturday, November 04, 2006

Become President of your own Country

Now's your chance to run your own country!

You make all the decisions - increase taxes or interest rates; invite overseas businesses to run your health service; invest in the railways - it's entirely up to you!

All you have to do is visit - the latest episode in the always popular sim series. And it's entirely for free! This is the most sophisticated economic model - much more detailed than the one used by the Chancellor's office for example - that I've ever come across and yet it's being promoted as a game for teenagers!!

Give it a try and learn the hard way what can go wrong when you are el Presidente!

If you enjoy simulations, the American Foundation for Teaching Economics also offers a wide range of examples. You can see their materials here: