• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Economics Coursework - Demand&Supply

Extracts from this document...


Commentary Coversheet Economics commentary number: Standard Level #2 Title of extract: Car industry begs for budget boost from Alistair Darling Source of extract: The Guardian (www.guardian.co.uk) Date of extract: 10-03-09 Word Count: 748 words Date the commentary was written: 05-05-09 Section of the syllabus to which the commentary relates: Section 2 Candidate name: Falk Konstantin Luebbe Candidate number: Car industry begs for budget boost from Alistair Darling 07/04/09 - guardian.co.uk Manufacturers and dealers want UK to follow Europe into scheme to give cash to drivers who scrap old cars to buy new The government was facing renewed pleas to bail out Britain's ailing motor industry yesterday as figures showed sales of new cars had dropped by almost a third year on year. Only 313,912 cars were registered in March - a 30.5% fall in sales from this time last year, figures from the Society of Motor Manufacturers and Traders (SMMT) showed, prompting fresh calls for the government to pay motorists to trade in their old cars for new ones. The motor industry and lobby groups are hoping this month's budget will include a scrappage scheme, under which car owners are given a financial incentive of about �2,000 to swap their old vehicle for a new greener model. Treasury officials have told the industry they are seriously considering including such a stimulus in the budget a fortnight tomorrow although ministers publicly insist that no decision has been taken. ...read more.


A vehicle-scrappage scheme has the potential to reduce emissions, reduce accidents and their severity whilst giving a boost to the UK motor industry. There are many benefits from getting older gross polluters off the road." But green groups counselled against introducing such a scheme. Peter Lipman, policy director at Sustrans, the sustainable transport charity, said it would be "a really, really bad idea, wherever the money is coming from". "There are so many better ways of spending government money if you are trying to deal with both the recession and climate change," he added. The RAC motoring strategist, Adrian Tink, said: "The introduction of any car-scrappage scheme needs to be contingent on balancing the economic benefits with a concern for the environment. The scheme needs to be as much about getting old, high-polluting cars off the road as it is about stimulating car sales." The dire sales figures bode ill for the economic recovery because new car sales are seen as a key indicator of consumer confidence. When the UK went into recession in the early 1990s, new car registrations dropped for 27 successive months. At one point, sales that had reached an annual peak of 2.3million in the late-1980s dipped as low as 1.5million. IB Economics: Internal Assessment Commentary Car industry begs for budget boost from Alistair Darling The article "Car industry begs for budget boost from Alistair Darling" found on the web page of The Guardian discusses the effects of the current recession on the car industry, particularly in the UK. ...read more.


Of course production will decrease what will cause cyclical employment but to a certain extend production will be kept up to occupy the workers. The term cyclical unemployment can be defined as occurring when the economy is growing more slowly than estimated as the demand for labour is interdependent on the demand for goods and services. This situation can't be kept up for long because firms lose money spending more money on workers they try to keep than actually gaining through sales and go bankrupt if the recession doesn't end or if they are not being subsidized by the government. Hence the motor industry searches for ways of pushing demand. A possible solution could be the scrappage scheme which encourages motorists to swap their old cars against new ones by giving the buyer about 2000� directly. The effect of the scheme on the demand for cars can be seen on the following diagram: Demand rises again due to the encouragement and shifts the demand curve to the right again. Concluding one can say that the law of supply and demand is displayed in the real world. In the article "Car industry begs for budget boost from Alistair darling" it is clearly shown how recession can affect the demand for cars and how therefore demand for labour interdepends on demand for, in this case, cars. Furthermore it can also be stated that things like the scrappage scheme can encourage demand again. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our International Baccalaureate Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related International Baccalaureate Economics essays

  1. Extended Essay Economics

    Once a company is registered with CADIVI, they are then faced with a lengthy process when trying to import items. They simply cannot exchange into any amount of Bolivares into dollars whenever they choose. A request for import approval from CADIVI is required.

  2. Economics Commentary Demand and Supply

    further deteriorate, causing more harm to their economies and less money and revenue for their governments.

  1. Economics Notes. Elasticity of Demand and Supply.

    They should also be aware of the price changes they make which will affect the demand of the rival's products. - Firms that produce complementary goods should be aware the change in demand for the complement product if they make a price change in their product.

  2. Econ IA-Supply and Demand

    Furthermore, as the article mentioned, the "Informed Sources website" does "foster anti-competitive behavior". Although it is not illegal, it is harmful for consumers. If the firms are anti-competitive, the prices will be held high. Also, if all the firms charge at the same price, the firms who are producing at

  1. Growth and Development Problem Set - IB Economics exam questions and answers.

    total amount of funds in bank deposits on average is about 15% of national income, compared to 30% or more in developed countries. The number of banks and their branches in relation to the population in developing countries is far smaller than in developed ones, indicating that businesses and the

  2. With the aid of at least one diagram and examples, explain the difference between ...

    Costs of factors of production (factor or resource prices) is an example of non-price determinant of market supply. The firm buys various factors of production (land, labour, capital and entrepreneurship)

  1. Economics Essay on Supply and Demand and the operation of markets.

    Allocation of resources: Analysis of how scarce resources, factors and producer?s are distributed among producers, and how scarce goods and services are apportioned among consumers. Taking into consideration the accounting cost, economic cost and opportunity cost. In the world of economics, the two most influential factors, which would be supply

  2. Is Economics as old as the first Transaction between Men?

    The continued existence of man demonstrates man?s ability to achieve this goal. With the limited resources available to man and his unlimited wants, in order to survive, cooperation within a society is required. This cooperation has ever been present, as trade is thought to have occurred as long ago as 3000BC.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work