Real ale

Read this article in the BBC about real ale!





Here is an extract:


"Real ale is the only type of beer now seeing its sales grow in UK pubs, helped by an increasing number of women enjoying the drink, a study has said.

While all other beer types, such as lager and keg bitters, saw their sales fall in the the first half of 2009, sales of real ale grew 1%, it said.

The independent study, which is backed by a host of brewers, said the number of women drinking real ale has doubled."

This is what you must do:

a. summarise the article in your blog

b. link to the article

c. list the determinants of demand and the determinants of supply

d. draw the demand curve for real ale

e. explain whether the demand for real ale is elastic or inelastic

f. explain why the demand for real ale has increased

g. explain - with diagrams - whether binge drinking is a positive or negative externality

h. advise on government policy in the light of your answer to (g)

Knob Creek

Look at this article about the whisky industry...








Extract:

"How do you run out of stock in the middle of a global recession? The Kentucky bourbon brand Knob Creek claims that's what has happened at its distillery. Stocks of the premium whiskey have run dry and the next batch of the stuff won't be ready until November.

Knob Creek's owner, Beam Global, ran full page advertisements in US weekend newspapers apologising to bourbon devotees. The promotions showed an empty bottle of Knob Creek under the words "thanks for nothing". The firm has been making the most out of its predicament - it mailed out empty bottles to journalists, just to ram the point home, and it is handing out t-shirts trumpeting "the drought of 2009".

Bill Newlands, president of Beam Global, says the problem is that Knob Creek has to age for nine years in a complex maturing process to come up with a sufficiently full-bodied taste to satisfy bourbon anoraks. Back in 2000, the company apparently did a poor job in predicting supply. Oddly, Knob Creek says it is experiencing "double-digit growth" despite the economic meltdown."

Consider the supply of Knob Creek whisky.

In your blog:

a. put a summary of the article
b. link to the article
c. explain whether the supply is elastic or inelastic - and draw a diagram to illustrate your answer

AS Economics Homework

Here is an article about the price of stamps.

Read the article and put a summary of the article, in your blog.




Then (linking to the article) answer the following questions:

a) Define price elasicity of demand

b) Using the information in the article, calculate the PED for first and second class stamps

c) What do the 2 numbers you have calculated tell you about the demand for the 2 products?

d) Why is demand for these 2 products as you have described? (Hint: Look at the factors that influence PED)

e) What advice would you give Royal mail about their pricing structure as a result of your calculations?

f) Why is ceteris paribus important when we are delaing with elasticity?

Elasticity

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