Hello and welcome to the Economics Department here at Reigate College.
My name is Stuart Hibbert and I’m the course leader for Economics A Level. Economics is a relevant and challenging subject and I’m really pleased you’ve chosen to study it. I’m looking forward to welcoming you to the department in person at the beginning of the academic year.
Many of you won’t have studied Economics as a separate subject before, so it’s really important you’re fully prepared before you embark on the A Level course. With that in mind, I’d like you to complete a series of tasks and activities over the coming months to introduce you to some of the topics you’ll be studying. You should also aim to read newspapers and journals (many are available for free on-line) to keep up to date with the latest economic developments, especially during these unprecedented times.
All the tasks should be completed by Choices Day on 25 August. Please enjoy working through them and we look forward to you sharing some of the things you’ve learnt, when you start the course in September.
The tasks will be released here in three phases:
Explore your Subject – 4 May
Economics can be broken down into two distinct branches – microeconomics
and macroeconomics. Microeconomics considers the economics of everyday life, i.e. the impact of the decisions taken
by us as individuals (households) and by businesses in different and often
Your first activity will involve microeconomics.
A BBC survey claims that teenage spending in the UK accounts
for £1.7 billion every year! On average those aged 13-19 spend £54 a week. However,
the Coronavirus has changed the pattern of spending of all households to some
Task 1: Copy out the chart below and fill in the gaps with your own personal spending. (If you don’t spend at all, simply estimate how you would spend the average of £54 a week in each scenario.)
Task 2: Now answer the following questions about the changes in your personal spending:
Give a summary of the changes in your spending before and
during Coronavirus. (Hint: try to comment on the changes in type, frequency and
amount of spending.)
How do you think any changes in your demand for products and
services will affect firms?
How might the changes in your spending, and all teenager
spending, affect the whole economy of the UK?
Task 3: Explore the area of teen spending more by going to the following websites:
You should complete this section of tasks by 1 June.
Get Going – 1 June
You should aim to complete this section of tasks by 1 July.
from the first series of tasks where we asked you to think about your own
personal changes in consumption due to the Coronavirus, now we’ll have a look
at how changes at the micro level may impact the whole economy or the
is therefore the study of the economy as
a whole and it also analyses the global (international) economic system.
To do really well
in Economics you need to keep up to date with current affairs, as there are
constant changes in the state of the economy.
Task 1: If you don’t already have it,
download the BBC News App onto your phone. Open the App and read the first
three articles in the Business
section that are associated in some way to the Coronavirus and its impact on
of the three articles with a maximum of five sentences per article. For each
one, identify whether the article concerns Micro or Macroeconomics.
Task 2: Try to build into your routine
a regular time to read the news, making sure to include news articles that
discuss the economy. If you come across a relevant article that you find particularly
interesting, please make a note of it.
Aim High – 1 July
You should complete all tasks by 25 August.
One of the reasons that economists are so employable is that Economics is a real life subject that attempts to explain why businesses, consumers and the government make the decisions they do in reaction to an ever-changing environment. A whole range of organisations value these skills highly, and during the A Level course we will help you develop skills for life beyond your formal education.
The fundamental economic problem is how do we allocate limited
resources as efficiently as possible in order to satisfy society’s unlimited
wants and needs, within this uncertain environment. Economic agents (governments,
households and firms) are constantly reacting to events (such as the coronavirus
or a sharp fall in the price of oil). To succeed at Economics, it’s therefore
really important that you keep up to date with current affairs and think about
how changes might affect you and others in the economy.
TASK: Read the
article below taken from the Guardian
newspaper in April on the recent remarkable changes to the price of oil and then
answer the following questions:
Why did the oil price fall to -$38?
What does it mean for a price to be negative?
Explain what happened to the demand for oil.
Why did the supply of oil not fall?
Why did the price of petrol not become negative?
If the oil price falls what will this mean for UK firms and consumers?
The price of US crude oil crashed from $18 a barrel to -$38 in a matter
of hours, as rising stockpiles of crude threatened to overwhelm storage
facilities and forced oil producers to pay buyers to take the barrels they
could not store.
The market crash underlined the impact of the coronavirus outbreak on
oil demand as the global economy slumps.
On Tuesday prices rebounded above zero, with the US benchmark West
Texas Intermediate for May changing hands at $1.10 a barrel after closing at
-$37.63 in New York on Monday.
The rapid market decline of recent weeks had reached fever pitch on
Monday as traders reached their last day to trade oil for delivery in May
before the contracts expire. The deadline triggered a collapse in prices as
desperate oil traders with more crude than storage space were forced to take
Daniel Yergin, a Pulitzer-winning oil historian, said: “The May crude
oil contract is going out not with a whimper, but a primal scream.”
The price of oil from the US shale heartlands has been declining
steadily in recent weeks following the biggest slump in oil demand for 25 years
steps due to restrictions on travel to curb the spread of Covid-19. The fall
accelerated amid rising fears that the global economy may be facing its deepest
downturn since the Great Depression.
Oil producers have continued to pump near-record levels of crude into
the global market even as analysts warned that the impact of the coronavirus
outbreak would drive oil demand to its lowest levels since 1995. The emergence
of negative oil prices is expected to prompt some oil companies to hasten the
shutdown of their rigs and oil wells to avoid plunging deeper into debt or
The collapse will come as a blow to US President Donald Trump who took
credit for brokering a historic deal between the Opec oil cartel and the
world’s largest oil producing nations to limit the flood of oil production into
the market. The pact to cut between 10 million and 20 million barrels of oil
from the market from next month was dismissed by many within the market as “too
little, too late” to avoid a market crash.
At his daily White House briefing, Trump described the negative price
as a “short-term problem”. He said the US was filling up its strategic
reserves: “If we could buy it for nothing, we’re gonna take everything we can
get,” he said.
Petrol prices are likely to fall sharply this year due to the sudden
collapse of oil prices and the long road to market recovery that probably lies
ahead. But it is worth keeping in mind that the price paid at the pump is not a
perfect reflection of the oil markets because petrol and diesel prices include
government taxes and a profit margin for the seller. The negative oil prices
seen in the US will be short-lived, so no one should expect to be paid for
filling up their car.
The Guardian, 20 April 2020
Please bring your answers with you to your first Economics lesson in September.