2025 context

example of state owned business

channel 4

what is an example of a company that operates in a market where OFGEM(office of general energy markets) regulates maximum prices

octopus

what sector has been a major recipiant of subsidies in recent years

renweable energy

which industry has a minimum price in scotland

alcohol

examples of 3 state owned businesses

network rail(rail infastructure), british business bank( bank to support small medium sized businesses), scotrail( train services nationalised in april 2022)

key drivers for state ownership

cost of living pressures, investment in infastructure over short term profits(thames water)

3 examples of privatised businesses

royal mail(privatised in 2013-16), lloyds bank( bailed out in 2008, privatised in 2017), northern rock( sold to virgin money in 2011)

what does efficiency depend on for private firms

contestability and competition

example of monopoly that still faces competition

uk broadband

examples of industrys with price caps

energy price cap (until oct 2024), rail fares( certain tickets), telecommunications(BT openreach)

what is BT openreach an example of

a quasi natural monopoly

what are regulators of natrual monopolys such as ofcom or ofgem described as acting like

a surrogate competitor

what is ofcom

office of communications( regulation)

what is a socail tarriff

when a company provides cheaper prices for families on low income/ people on universal credit

what are social tarriffs and example of for monopolys

3rd degree price discrimination where monpolys can increase welfare for those on lower incomes

evaluation for monopoly

judge a monopoly by outcomes rather than textbook theory

3 examples of recent mergers 2024

virgin money - nationwide building society, aviva - direct line group, baratt homes - redrow homes

what is an example of macroeconomics having micro foundations

barrat purchasing redrow which could increase quantity of new house building and therefore improve mobility of labour

3 examples of duopolys

pepsi and coke, visa and mastercard, inpost and amazon(parcel lockers)

how can oligopolys be contestable

oligopoly firms may be in price competition and competition of suppliers, each gaining economies of scale, and threat from challengers keeps prices low

3 examples of contestable markets

parcel couriers, low cost airlines, low cost gyms

what are the types of economies of scale?

purchasing economies, financial economies, technical economies, risk bearing economies

who is the biggest supplier of gas in the uk

octopus

what are 3 examples of indirect tax

VAT, sugar tax, landfill tax

what is good evaluation for government intervention for market failure

one policy is usually not enough and both demand and supply side policys are needed

• government market failure

What factors shift the demand curve?

Income, tastes, prices of substitutes/complements, advertising, etc. 🟢 Real-world example: Demand for electric cars rose due to environmental awareness and government subsidies (e.g. UK plug-in grant).

What is price elasticity of demand (PED) and why is it important?

PED measures responsiveness of quantity demanded to a change in price. Important for pricing strategies. 🟢 Example: iPhones have inelastic demand; Apple can raise prices with little fall in quantity sold.

What is a negative externality?

A cost imposed on third parties not involved in the transaction. 🟢 Example: Air pollution from diesel cars harms public health.

How can the government correct negative externalities?

Taxes, regulation, pollution permits. 🟢 Example: UK sugar tax (Soft Drinks Industry Levy) aimed at reducing obesity.

What are the characteristics of a monopoly?

Single seller, price maker, barriers to entry, abnormal profits. 🟢 Example: Thames Water is a regional monopoly in London.

What are features of oligopoly?

Few firms, interdependence, price rigidity, non-price competition. 🟢 Example: UK supermarket industry – Tesco, Sainsbury’s, Asda, Aldi.

What factors affect wage determination?

Skill level, demand for labour, trade union power, discrimination. 🟢 Example: NHS nurses striking in 2023–24 for higher pay due to inflation and working conditions.

What are the benefits and costs of economic growth?

+ Higher income, jobs, tax revenue – Inflation, inequality, environmental damage 🟢 Example: India’s rapid GDP growth raised living standards but increased pollution.

What causes inflation?

Demand-pull, cost-push, built-in inflation. 🟢 Example: UK inflation surged in 2022 due to energy prices and supply chain disruptions.

Types of unemployment

Frictional, structural, cyclical, seasonal 🟢 Example: Structural unemployment in coal mining communities after shift to renewables.

What is expansionary fiscal policy?

Increase in government spending or tax cuts to stimulate growth. 🟢 Example: UK furlough scheme in 2020 was expansionary to support demand during COVID-19.

How does monetary policy affect the economy?

Interest rate changes influence consumption, investment, exchange rate. 🟢 Example: Bank of England raised interest rates to combat inflation in 2023.

What are the impacts of globalisation?

+ Cheaper goods, access to markets – Job losses in some sectors, inequality 🟢 Example: Apple’s supply chain spread across Asia for efficiency and cost.

Effects of a strong currency

Imports cheaper, exports more expensive 🟢 Example: Post-Brexit pound depreciation boosted UK exports like tourism and manufacturing.