Monday, 5 December 2011
Monday, 28 November 2011
Saturday, 26 November 2011
Who, What, Why: How could Reebok sell trainers for $1?
The answer
- High volume with very slim profit margins
- Locally sourced materials and labour
- There are no guarantees of breaking even - a pilot in Bangladesh made losses
- But it's a social venture and the company stands to establish a foothold in a big market
Friday, 25 November 2011
Great resources to help with learning the theory on Labour Markets
A PowerPoint that includes basics plus a decent overview of Econ. Rent and Transfer Earnings.
http://www.google.co.uk/url?sa=t&rct=j&q=Key+factors+in+UK+Labour+supply&source=web&cd=9&ved=0CGMQFjAI&url=http%3A%2F%2Fwww.bized.co.uk%2Fsites%2Fbized%2Ffiles%2Fdocs%2Flabmarket1.ppt&ei=K1LPTq22E8Lt8QPJy-39Dw&usg=AFQjCNEoQ1W5Vqq3br3vu5h2BhwA9vgcJQ&sig2=9MvgW84RAlPDC8rZWgB_NA
Supply of Labour
http://tutor2u.net/economics/revision-notes/a2-micro-supply-of-labour.html
http://www.google.co.uk/url?sa=t&rct=j&q=Key+factors+in+UK+Labour+supply&source=web&cd=9&ved=0CGMQFjAI&url=http%3A%2F%2Fwww.bized.co.uk%2Fsites%2Fbized%2Ffiles%2Fdocs%2Flabmarket1.ppt&ei=K1LPTq22E8Lt8QPJy-39Dw&usg=AFQjCNEoQ1W5Vqq3br3vu5h2BhwA9vgcJQ&sig2=9MvgW84RAlPDC8rZWgB_NA
Supply of Labour
http://tutor2u.net/economics/revision-notes/a2-micro-supply-of-labour.html
Saturday, 19 November 2011
Wednesday, 16 November 2011
Market Failure - Smoking (From Bryn's Blog)
Unit 1: Market failure from smoking
A nice video and article from the BBC
a) What sort of market failure is occuring?
b) To what extent do you think providing information on the dangers of in car smoking would reduce people doing it and reduce the market failure?
c) To what extent do you think banning in car smoking would reduce people doing it and reduce the market failure
A nice video and article from the BBC
a) What sort of market failure is occuring?
b) To what extent do you think providing information on the dangers of in car smoking would reduce people doing it and reduce the market failure?
c) To what extent do you think banning in car smoking would reduce people doing it and reduce the market failure
Friday, 22 April 2011
Direct Line and X-Inefficiency
I was the recent victim (well last September) of a shunt in my car, when another driver undercut me going round a dual carriageway roundabout.
At the time, Direct Line said I could arrange a repair with my local garage, which I did for £375 plus VAT. Unfortunately, the other party, having originally accepted liability, gave backword, and so delayed my repair.
Direct Line rang today (Good Friday) to say that in fact I was not at fault mmm….and wanted to arrange my repair. This involves sending my vehicle to Barnsley (transport c.£100) and hiring me a car through Enterprise for the duration (£150+vat) for four days(!), then the cost of a repair at £250 per panel (£500+vat) and new alloy wheel fitted at £159+vat.
To arrange my own repair, they said, in addition to providing the receipt (which is what I would expect); they said I would have to meet their engineer next week at my garage in Lincoln, when I work in Spalding, 46 miles away.
So given the priority to me of personal convenience I’m going to let them sort the lot out!
Don't forget that x-inefficiency occurs where cost deviate from minimum due to uncompetitive behaviour. So how is this X-efficiency? Well the minimum cost to Direct Line for me to arrange the repair conveniently in my own time is £375 plus VAT, the cost for them to do it is c. £1009+VAT, £634 more!
In this case bureaucratic rules, probably to deter moral hazard, effectively increase their costs of operation by 169%!
What are the additional issues? Direct Line are owned by RBS (Royal Bank of Scotland) and RBS are owned by… you guessed it us!
At the time, Direct Line said I could arrange a repair with my local garage, which I did for £375 plus VAT. Unfortunately, the other party, having originally accepted liability, gave backword, and so delayed my repair.
Direct Line rang today (Good Friday) to say that in fact I was not at fault mmm….and wanted to arrange my repair. This involves sending my vehicle to Barnsley (transport c.£100) and hiring me a car through Enterprise for the duration (£150+vat) for four days(!), then the cost of a repair at £250 per panel (£500+vat) and new alloy wheel fitted at £159+vat.
To arrange my own repair, they said, in addition to providing the receipt (which is what I would expect); they said I would have to meet their engineer next week at my garage in Lincoln, when I work in Spalding, 46 miles away.
So given the priority to me of personal convenience I’m going to let them sort the lot out!
Don't forget that x-inefficiency occurs where cost deviate from minimum due to uncompetitive behaviour. So how is this X-efficiency? Well the minimum cost to Direct Line for me to arrange the repair conveniently in my own time is £375 plus VAT, the cost for them to do it is c. £1009+VAT, £634 more!
In this case bureaucratic rules, probably to deter moral hazard, effectively increase their costs of operation by 169%!
What are the additional issues? Direct Line are owned by RBS (Royal Bank of Scotland) and RBS are owned by… you guessed it us!
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