How to Win a Scholarship to University, part 3

How to Win a Scholarship to University, part 3

Recap of previous posts on how to win a scholarship 

In the previous two posts here on JC Economics Essays on how to successfully attain an undergraduate scholarship to university, I blogged about being prepared and ready for opportunities by starting early, studying hard, being polite and professional to teachers, tutors, and school administrators, and taking on leadership and volunteer or community positions, and how to plan for a scholarship to university. There were many questions that students would have to consider before applying for any scholarship (for a full recap, read this post on planning for a scholarship). 

Now, the next step is to craft a perfect personal statement, often in response to an essay prompt or some guidelines or guiding questions.  

Crafting the Perfect Personal Statement

How do we craft the perfect personal statement that would help a student gain entry into a prestigious university? 

This post here on my JC Economics Essays website will share some tips and techniques for drafting an excellent personal statement. 

In this post, we will refer to a personal essay, a statement of intent, and other forms of writing as a personal statement (to me, that is the most common way of referring to this specific type of writing). 

While no one can guarantee that a student's personal statement would be the best (naturally), and it often depends on what the student had done earlier in his academic life (remember what I said about getting strong grades, leadership positions, and volunteer or community work experience), one can always make the best personal statement one can - and hopefully that would be able to impress the assessors. 

In other words, write as best as you can - and hope for the best. The work that you have done will be able to help you. Your essay will hopefully be lit up by the brilliance of your achievements and contributions. 

First and foremost, before you start writing your personal statement - have a plan. 

This is similar to my previous post. 

Have a plan. 

And as I said before, if students fail to plan, then they plan to fail. 

Determine what the question is asking, and then outline your answer. What do you need to include in the response? What do you plan to argue, explain, and give examples for? 

If the question is asking about defining moments in your life, reflect on a few defining moments and lay them out on paper. 

If the prompt is asking about your experiences and knowledge of PPE - Politics, Philosophy, and Economics - then focus your thoughts and ideas on Politics, Philosophy, and Economics. 

If the guiding questions are more general, and asking you to focus on some ideas that have intrigued you, think about what books or articles you have read that really impressed you, impacted you, motivated you, or affected you. If the topic is on economics books - be sure that you start reflecting on economics books or journals that you have read. 

Second, be sure to bring in your strengths and knowledge into your response. 

This is a point worth repeating. 

The whole point of the personal statement is for you to show or demonstrate your strengths and knowledge into your response. The administrators and assessors cannot read your mind, so you will have to show them your strengths and knowledge. 

One way is to do it through citing your experiences, such as internships you have attended, relevant courses that you have taken, or volunteer work in a related field that you have done. 

If you are applying for law school, writing about the strengths you found in yourself while working at an intern in a fast-paced law firm would be useful; if you are applying for an economics undergraduate degree, then write about the online learning you have done on Keynesian economics, and what you have learnt about the difference between Monetarism, Classical Economics, and Keynesian Economics; and if you are applying for a social policy or sociology degree, be sure to write about your extensive volunteer work and how that taught you about income inequality or inequity in society. 

Through these examples, bring out your strengths, your good points, and the areas of knowledge or expertise that you may have. 

Notice that this really depends on the preparation work that you should have done before planning for universities and scholarships - please refer to parts 1 and 2 which I wrote earlier. The useful materials there will help you. 

Third, edit relentlessly. 

I have had former students write their personal statement once, and then they wanted me to have a look. Much of their writing was woefully inadequate for entry to university. Edit, edit, and edit again. 

If you have written a first draft, just be sure that you know that it can be better. 

Remember: that which is written without much care is seldom read with pleasure. 

The greater the pleasure you get from reading something, the greater the effort that went into it. 

When editing, there are many things to take note of:

Did you write in the right tone and register? Are you being too informal, or overly formal? 

How accurate are the terms and phrases you are using in the personal statement? Were you the Chairman, or the Assistant Chairman? Did you win the Gold Award or the Silver Award? 

Did you clear all the typos and spelling mistakes? 

Have you ensured that there is consistency in the terms used? 

And a common point often missed out is - have you used the right language? 

If you are applying for a college degree in the USA, please write in American English. 

If you are writing a personal statement meant for a UK university, please write in British English. 

If you are writing a personal statement for the University Scholars Programme in Singapore - whether the NUS or the NTU one - then be sure to use British English as well, as that is what we use in Singapore. 

Remember the Biblical phrase: Those who can be trusted in little things can be trusted in great things. Essentially, if you have not used terms consistently, and cannot even write properly, how can the reader or assessor trust you? 

Fourth, emphasise meaning and significance, but be sure not to overstate your case.

This is important. 

Many students do not know how to emphasise the meaning and significance of what they have done. 

Consider the following examples of weak sentences (from actual students):

I was Chairperson of ABC committee, I was Vice President of XYZ sport, and I participated in the JJJ seminar in YYYY year. 

I was selected class Chairperson and I was tasked to do many activities. 

I am deeply interested in accountancy and want to change the world. 

The first sentence is a pure listing - where is the meaning and significance? A stronger way of writing would be: 

I was Chairperson of ABC committee, which I established in YYYY year. Even though I spent a lot of time starting up that new committee, I also played football and eventually rose through the ranks to become VP of the XYZ sporting team, which won three gold medals under my leadership. I headed the team in the JJJ seminar in YYYY, and we won third place for the first time in school history. 

The second sentence is weak because it comes across as passive and insignificant. Consider this instead: 

I was chosen to be class Chairperson in recognition of my contributions to the class, and I led many activities and initiatives, such as ... 

The third is just interesting... but could be stronger and better. In the end, I rewrote my student's entire personal statement:

I am deeply interested in studying accountancy at university because my father is an accountant and I want to follow in his footsteps. He once told me that accountancy could change the world. I was intrigued by his unusual comment. How could accountancy be as important or relevant as economics or finance? And my father said to me... 

Fourth, ask people who know to help you - but take their advice with caution. 

Always remember that there is great value in asking people to help you. 

They can share their advice and knowledge. They can point out areas for improvement. They can share ideas and pointers. And if they have applied to the same scholarship before, or the same university course, they can help you. Do your research and interview people; ask them for tips and tricks; and learn from others. 

But do take all advice with caution. 

Some students told me that they were told to use big words and fancy phrases. While that may work with some US universities, it does not work with UK universities as the British are often more understated and subtle. 

Yet others have told me that the personal statement should be full of sob stories and problems that one had to overcome. Yes, there is some value in showing good values of resilience and strength. 

However, do not overdo this. Also, if many people write like this, how do you differentiate yourself from the rest of them? 

What is your unique selling point if you are another one of the sob stories? 

Fifth, respect convention, but be unique and differentiated

Also, while it is convention to write in the conclusion "I would appreciate the opportunity to study at your fine institution", and some coaches and trainers even use similar phrases to coach and train their students, consider other ways of writing. 

There is nothing wrong with convention. However, be unique even while you are conventional. 

"Studying in London is a dream come true, and I hope to be given a chance to do so" could be reframed as "London is an exciting city - studying at the London School of Economics would be a double-win for me", which is more unique and edgy. 

Or perhaps "at your fine institution" could be phrased as "As the famous economist Keynes studied in this college and benefited from a first-rate education, it would be my privilege to have this same honour". 

You get what I mean - yes, by all means stick to convention, but what is your unique selling point? 

What is your unique way of writing and communicating? What is "you" about this? 

It is also convention to say that you are reading Economics because you are interested in it. I think everyone would say that (some are actually telling the truth). 

Do not write "I am interested in economics". A better and stronger way of saying it is "Reading Milton Friedman's book on XYZ opened my eyes to some economics topics, and sparked my interest in the subject". 

More information will be coming in future posts. 

For more tips and techniques on how to raise your chances of getting a top scholarship to university, stay tuned for more. Thank you for reading, and cheers! 

JC Economics Essays -- I am currently writing on how to win a scholarship to university, for young and budding scholars to read undergraduate degrees. Thank you for reading and I hope these materials help you. 

How to Win a Scholarship to University, part 2

How to Win a Scholarship to University, part 2

In the previous post on how to win an undergraduate scholarship to enter university, I emphasised the importance of starting early, studying hard and ensuring good grades as a bare minimum, being polite and considerate to your teachers and school administrators, and taking on leadership roles and doing community service or voluntary work in the larger community. 

This advice or guidance is useful as a starting point.  

It can also be simply summed up simply as being ready, and as I heard Les Brown say before:

It is better to be prepared and not have one, than to have an opportunity and not be prepared. 

After doing the hard work of studying hard, being prepared and attentive in class, attending seminars, lectures, tutorials, and lessons - it is time to make all the preparation count. 

What is the next step on the way to winning a scholarship? 

The next step is called planning. 

As the famous saying goes, if you fail to plan, you plan to fail. 

It's so important that I have to state it again. 

After you have done all the basics and have started early, you now need to plan and think through what you will need to win a scholarship to university. 

There are basically a few important things that you have to plan for to ensure that you are well-equipped and ready to apply for a scholarship to university. 

The best way of think of this stage is to think of the following questions, which will help you make your plans. 

Think of these questions as a checklist for your planning purposes. 

First, what university would you like to go to? 

This is not an easy question to answer at all. 

There are famous and branded universities in the USA, for example Ivy League universities. 

Ivy League colleges are considered the most prestigious in the USA. There are eight total colleges that are considered Ivy League, namely Brown University, Harvard University, Cornell University, Princeton University, Dartmouth University, Yale University, and Columbia University, and the University of Pennsylvania. Of all the institutions of higher learning, these elite universities are considered the most outstanding and sought-after.

There are also famous universities in the UK, like Oxbridge (i.e., Oxford or Cambridge) and other Russell Group universities, such as the London School of Economics and Political Science, King's College London, Imperial College, the University of Manchester, and so on. According to the Russell Group’s website, the 24 member universities (sometimes colleges) are world-class, research-intensive universities with their own unique and distinguishing characteristics, history, and ethos. The commonality is that these universities are committed to maintaining the best research, an outstanding teaching and learning experience for students, and unrivalled links with local and national business and the public sector. 

Singapore also has many strong local universities with global reach and impact - for example, the National University of Singapore (NUS) (and also its Duke-NUS Medical School and Yale-NUS College); Nanyang Technological University (NTU) (as well as the National Institute of Education, which sits within NTU); Singapore Management University (SMU); Singapore University of Technology and Design (SUTD); Singapore Institute of Technology (SIT); and the Singapore University of Social Sciences (SUSS). 

Some universities are stronger than others in certain degree courses; for example, LSE is very strong in Economics and is reputed to be one of the best in it. 

This brings us to our next question: 

Second, what university course would you like to apply for? 

There are many courses and degree programmes - double degree programmes; multi-disciplinary programmes; University Scholars Programmes; majors; minors; honours; and even non-honours. Bachelors of Arts; of Science; of Social Sciences. 

What university course would you like to apply for? 

What meets your talents, skills, and interests? 

What will be useful and helpful to you in the long run? 

There are many subjects. 

Since this website is basically about economics, the university degrees most related to economics are:

Mathematics, Mathematical Economics, Econometrics, Political Science, Business Administration, Management, and pure Economics programmes. 

What interests you? 

What would you find fitting, relevant, useful, and helpful to you? 

Third, which scholarship programmes are you intending to apply for? 

Similarly, this is not an easy question to answer at all. 

There are many types of scholarships, for example, private sector scholarships and government or public service scholarships. 

There are bond-free scholarships, and other scholarships which are bonded (i.e., there is an obligation to work for an employer for a certain period of time, should you take up the scholarship). 

There are partial scholarships, which do not pay for everything, and there are full scholarships, which pay for everything. Even the organisations, institutions, and services that offer scholarships are different. 

Fourth, what do you need for your application?

You will need references or testimonials; 

to deal with the application process, whether it is through the Common App or UCAS; 

to write a personal statement (often more than just one personal statement, each designed or targeted for a different target audience and with a different purpose); 

to take the SAT or ACT aptitude tests or entrance examinations, if any are needed; to prepare for an interview or even a series of interviews; and 

visa applications, and the list goes on. 

Think through and plan accordingly - what do you need for your university and scholarship application?

On that note, when planning, do remember: the timelines matter. 

They really do. 

Some applications are made before, and some are after, yet others are concurrent and simultaneous. 

You cannot report SAT scores that you have not attained, and you certainly want to find out if the university you are applying for accepts provisional scores or preliminary results from your preliminary examinations. 

If you want your teacher to write you a reference or testimonial, you will need to plan that out in advance:

Who will you ask? 

How long do they need? 

And how will they submit it, and will that take time? 

Buffer in more time. More time, more time. 

Don't do things last minute. 

In other words, think of what I said earlier - if you fail to plan, you plan to fail. 

Plan and think through what you need, and you are yet another step closer to success. 

While there is no guarantee that you will be successful in a scholarship application, each step you take helps you get closer and closer to your dream degree and aspiration to be a scholar. 

Thank you for reading and stay tuned for more. Thanks! 

JC Economics Essays

In economic theory, a monopolist would determine the price and output that would maximise his profits. Discuss whether firms in the real world would always set prices at profit-maximising levels. [25]

This essay argues that, while according to economic theory, a rational monopolist would set MC = MR to maximise his profits, in the real world, firms sometimes do not want to maximise their profits because they sometimes have alternative aims like revenue maximisation, or are often unable to because of imperfect information and bounded rationality and depend on "rules of thumb" like cost-plus pricing.

On the one hand, a monopolist would rationally seek to maximise profits, using the MC = MR rule, or the profit maximisation rule (also known as the marginalist way or principle). A monopoly is defined as one dominant firm that produces a unique good with no close substitutes, for instance, De Beers in terms of diamonds or Microsoft in terms of the software that it produces. The market structure that a monopolist faces generally has very high barriers to entry, either in terms of natural barriers to entry like large economies of scale, or man-made barriers to entry like powerful legislation and patent rights, price setting power due to the large market share commanded by the monopolist, and often imperfect information exists in the market, just like it does in software and high capital-intensive technologies.

On the other hand, in the real world, firms often do not want to maximise profits. They may want to maximise their growth or revenue instead of profits. 

To maximise their growth and expansion, they could produce where AR = 0, which would maximise output, so as to extend their lead in the market and would thus promote the growth of their firm. 

To maximise revenue, firms could easily produce where MR = 0. This economic theory is particularly interesting. According to the famous economist William Baumol, if the aim of a firm is to maximise its sales instead of profits, one possibility is that it would produce where MR = 0. This is due to the issue of the division between ownership and control of a firm. With the separation of ownership and control in modern corporations, the issue is that managers of a firm, like the Chief Executive Officer or Managing Director, may seek prestige and higher salaries by trying to expand sales even if it were at the expense of profits, which would be shareholders’ interests. According to Baumol and Williamson, managers may seek to maximise their own utility rather than profit-maximise, which would benefit the firm. And according to Bearle and Means, the ownership of companies is spread out over a large number of shareholders with little individual power, while control and decision-making is in the hands of a few managers. 

However, some firms would aim to maximise their revenues but this would still be subject to "satisficing" – which means to reach at least a minimum level of profit, but a level which is lower than pure profit maximisation.

Another reason why firms may not maximise profits is that they are unable to do so, even if they are willing. According to Herbert Simon, decision makers face the situation of imperfect information and have to make decisions under uncertainty in the real world. Even though they may be rational or try to be, they eventually use what is known as “bounded rationality”, and therefore make decisions using the information that is available to them. Using Simon’s theory of bounded rationality necessitating satisficing, Cyert and March argued that real world firms aim for satisficing behaviour and even found empirical data to support their view. 

One alternative way of making pricing and output decisions is to use cost-plus pricing, which is basically to take P = AC + a mark up, which is why this method is called cost-plus pricing. Hall and Hitch would agree, as they argued that company executives often make decisions using “rules of thumb” rather than the marginalist way of MC = MR.

In conclusion, to a large extent firms in the real world do not aim at profit maximisation in the sense that they set MC = MR, and often are unwilling or unable to set MC = MR. They often operate under conditions of imperfect information and make bounded rational decisions, and may often use cost-plus pricing. However, to a large extent, firms that do not care at all about profits would not survive in the long run, and it is not a far stretch of the imagination to say that either by luck or by skill, in the long run, all firms would approximately reach a level of pricing and output that is profit maximising because firms that did not make profits would not have survived in the long run against their more rational and efficient competitors.

Economics Tutor's Comment - This is an excellent effort for the A levels that answers the economics question comprehensively. Also, the use of economic theory is very strong in this economics essay. Do think of which economics diagrams are needed to be drawn and explained in this essay to make it an even stronger paper that supports your case that you are making. Thank you for reading, and cheers.

JC Economics Essays - This useful and relevant economics essays site can help students studying economics do well at the A-Levels (Cambridge, A1/S, A2, H1/H2/H3 levels), and the international AS level economics examinations. IB students can also benefit from the top-quality economics content here. This economics website contributes useful economics content, lesson materials, examination tips and techniques, and model economics essays that students in both Singapore and the UK, as well as also all around the world, can use to excel in economics.

This excellent economics essay was jointly written and contributed by both SS and WT, the first, our editor of JC Economics Essays, and the second, our resident Economics expert who helps students understand the beauty of Economics and its applications in real life. (Some of the economics content for alternative theories of the firm was also learnt from economics modules/lessons at the University of Manchester - Business Economics in 2008.) Thank you for reading and cheers! 

According to economists, a large rise in the cost of car manufacture in the United Kingdom (UK) and a general rise in incomes of households in the UK are likely to affect the sales of cars in different ways. Explain how elasticities of demand can assist in understanding the effect of each of these changes on the sales volume of cars. [10]

This paper explains how the elasticities of demand are useful in understanding the effect of a large rise in the cost of car manufacturing in the United Kingdom (UK) and a rise in incomes for UK households are likely to affect the sales of cars in the UK. In this economics essay, we focus on the price elasticity of demand (PED) and income elasticity of demand (YED), because the rise in the cost of car manufacturing results in a leftward shift of the supply curve, thus necessitating the concept of PED, and the rise in incomes necessitates the use of the concept of YED.

Price elasticity of demand is defined as the degree of responsiveness of the quantity demanded of a good with respect to the change in its own price, ceteris paribus.

Question: What mathematical formulae and diagrams do you think can be used here?

Suppose the cost of production of a car increase, thus resulting in an increase in its price. The use of the concept of PED is useful in evaluating the impact on the quantity demanded of the car. In the case of a Bentley, where the PED is greater than 1 since it comprises a relatively large proportion of income, an increase in the price of a Bentley results in a more than proportionate decrease in the quantity demanded of the Bentley. In the case of a Honda, where the PED is less than 1 since it comprises a relatively small proportion of income, an increase in the price of the Honda results in a less than proportionate decrease in the price of Honda. In both cases, however, we can conclude that the quantity demanded, and hence sales volume, of the different car models fall as prices increases, ceteris paribus.

Income elasticity of demand is the degree of responsiveness of the quantity demanded of a good with respect to the change in income, ceteris paribus. 

Question: What mathematical formulae and diagrams do you think can be used here?

The change in quantity demanded, and hence sales volume, depends on the YED of the car model. If, like a Honda, the car is a normal necessity, where 0 < YED < 1, an increase in income results in a less than proportionate increase in the quantity demanded and hence sales volume. If, like a Bentley, the car is a normal luxury, where YED > 1, an increase in income results in a more than proportionate increase in the quantity demanded, and sales volume will therefore increase more than proportionately. On the contrary, if the car is like an inferior good like a Ford, where YED < 0, an increase in income will result in a fall in the quantity demanded, thereby reducing sales volume of the car.

Overall, the use of elasticities of demand concepts, namely price and income elasticities, are useful in helping us understand the effect of the changes on the sales volume of the different car models. 

Economics Tutor's Comments - This is a strong economics essay which covers quite a few important points and arguments. However, to improve this essay, could the writer have used the concept of cross elasticity, or cross price elasticity (XED)? And could more specific examples have been used to illustrate the economic theory? What else would make this economics essay even better than it is currently? Thank you for reading, and cheers.  

JC Economics Essays - This essays site helps economics students with the A-Levels (Cambridge, A1/S, A2, H1/H2 levels), and the international AS level economics examinations. This blog provides a range of useful content, materials, tips and techniques, and model economics essays that students in the United Kingdom, and internationally, can use to excel in their studies and examinations.

This model essay was contributed by WT, our resident expert who helps economics students appreciate Economics and provides detailed and comprehensive content on economic issues. WT has a wide-ranging interest in Econometrics, Economic History, International Trade, and Game Theory, especially with respect to economics' applications in real life. And as always, S. S., the editor of JC Economics Essays, edited this economics essay. 

The price mechanism will always allocate scarce resources efficiently for all goods and services in a market economy. Assess the validity of this statement made by an economist. [15]

This economics paper assesses whether the price mechanism will always allocate scarce resources efficiently for all goods and services in a market economy. 

On the one hand, it will indeed allocate scarce resources efficiently in economic theory, because of the workings of the price mechanism to achieve productive and allocative efficiency. On the other hand, the allocation of scarce resources may not always be efficient, especially when there are market failures, which distort the workings of the free market.

On the one hand, the price mechanism allocates scarce resources efficiently in the market economy for goods and services through its signalling, rationing, allocating, and incentive functions. The signaling function is one where the price of a good allows for a re-calibration of the quantity demanded and quantity supplied, allowing goods to be efficiently allocated. Under the market price, consumers seek to maximise utility, and will therefore only consume if they are able to have a positive net benefit from the consumption of these goods. Those who are willing and able to pay will obtain the good. Correspondingly, the resources used to produce these goods will also be efficiently allocated, as producers maximise their profits by producing only if the cost of production is less than or equal to the prevailing market price. As a result, there is productive efficiency, since goods will be produced at the lowest cost combination to ensure profits are maximised. On the whole, there is also allocative efficiency, since society’s welfare is maximised, where only those who are able to consume and produce do so. 

Question: What economics diagram do you think should be drawn here? How would this diagram back up your arguments? 

On the other hand, there are market failures in the real world, which may impede the efficient allocation of scarce resources in a theoretical free market. Market failure is the situation where the free market fails to allocate resources effectively, and there is allocative inefficiency. There are many types of market failure, such as the lack of provision of public goods, under-consumption of merit goods but the over-consumption of demerit goods, externalities both positive and negative and also in consumption and production, imperfect competition, imperfect information, factor immobility, and inequality. 

Here, we focus on the under-consumption of merit goods. Because rational consumers seek to maximise their own welfare, they do not account for the positive externalities associated with the consumption of the merit good. Externalities are defined as the spillover effects to third parties who are not involved in the production or consumption of the good. Vaccinations provided for example by the National Health Service (NHS) are examples of merit goods. However, an individual consumer only considers his private benefit from getting vaccinated, and does not consider the positive externalities his vaccination confers on society. This results in an under-consumption of the merit good of vaccination, and there is therefore dead-weight loss, as society’s welfare has yet to be maximized due to this under-consumption.

Question: What economics diagram do you think should be drawn here to support the merit good argument, which shows that markets do not always work efficiently?

In conclusion, while the price mechanism allocates scarce resources efficiently in theory, this may not be the case in reality, as there are market failures that challenge the assumptions upon which the efficiency of the price mechanism is predicated. In the real world, with market failures, there is the need for government intervention in the free market to reduce or eliminate market failures so that the free market can produce the optimal outcomes the economists promise. 

Economics Tutor's Comment - This is a rather strong economics essay which covers quite a few important points and arguments, but it could do so much more. The candidate's use of economic theory is quite strong in this economics essay. Could more examples have been used, or could the example of the NHS have been even better utilised to make the point? Perhaps another market failure - the lack of provision of national defence - would have also been brought in to buttress the arguments. What else would make this economics essay even better than it is currently? Thank you for reading and cheers!  

JC Economics Essays - This economics essays site helps economics students with the A-Levels Economics (Cambridge, A1/S, A2, H1/H2 levels), and the international AS level economics examinations. This blog provides a range of useful economics content, materials, tips and techniques, and model economics essays that students in the United Kingdom, and also in countries such as Malaysia and Singapore, can use to excel in their studies and examinations.

This model essay was contributed by WT, our resident expert who helps students understand the beauty of Economics and provides content on economic issues. WT has a wide-ranging interest in Econometrics, Economic History, International Trade, and Game Theory, especially applications to real life. And as always, S. S., the editor of JC Economics Essays, edited this economics essay. He also provided comments for this essay. 

Explain the cause of the market failure in the United Kingdom (UK) car industry, with relevant examples.

This economics essay explains that the two main sources of market failure in the British car industry are imperfect competition, especially arising from market power, which leads to productive and allocative inefficiency.

While there are many sources of market failure, such as the failure of the free market to provide public goods, the under-provision of merit goods, while demerit goods are over-consumed if their production and consumption are left to the workings of the free market, one possible cause of the market failure of imperfect competition due to excessive market power in the British car industry. 

The British car market can be characterised as an oligopolistic market. Broadly speaking, the car industry in the UK is known for producing cars such as Aston Martin, Bentley, Daimler, Jaguar, Land Rover, Lotus, McLaren, Mini, and Rolls-Royce, and also popular Japanese cars such as Honda, Nissan, and Toyota. As this market is oligopolistic, there are relatively few sellers, often of large size as can be seen in the examples, a differentiated product, and relatively high barriers to entry, such as patents, technology, and legal barriers. (For the purpose of simplicity in this essay, let us assume that these oligopolies do not collude or form cartels.) Barriers to entry are defined as be man-made or natural obstacles to free market competition, and this is one area where the British car industry suffers. For example, the UK has a strong design and technical base which means that its cars are likely to be highly differentiated products with no close substitutes, which confers a certain degree of market power. 

Question: What economics diagram do you think should be drawn here? How would you explain the diagram to support your arguments?

The net result of this market power is that, according to economic theory, the price of the cars produced will be larger than the marginal cost it takes to produce the car. When P>MC, it means that the industry is allocatively inefficient. Allocative inefficiency is defined as the situation where society’s resources are not being maximised. Large oligopolies, such as Aston Martin, Bentley, Daimler, Jaguar, Land Rover, Lotus, McLaren, Mini, and Rolls-Royce, tend to be allocatively inefficient, and therefore tend to be productively inefficient as well. Productive inefficiency occurs when the price of the product is higher than the average cost required to produce the product, because if the car industry were efficient, P = MC = AC, in a perfectly competitive situation. 

In conclusion, the car industry in the United Kingdom suffers from imperfect competition, with market power resulting in productive and allocative inefficiency.

Economics Tutor's Comment - This is a commendable effort for the A levels, but think of how the examples could be more explicit and targeted towards answering the question. How would make this essay even better? Thank you for reading and cheers. 

JC Economics Essays - This is an economics essays site that can help economics students with their A-Levels economics (A1/S, A2, H1, and H2 levels) as well as the international AS level economics examinations. This economics blog provides a range of useful and relevant content, materials, and essays that students in the United Kingdom, and all around the world, can use to excel in their economics. 

This Economics post with comments was contributed by WT, an Economics expert who helps students understand the beauty of Economics and its applications in real life. WT has a strong interest in Econometrics, Economic History, International Trade, and Game Theory, especially with its applications to real economic situations. This economics post was edited by S. S., the editor of JC Economics Essays. 

View: The Minimum Wage is Bad

This article was contributed by a reader (MSc Economics)

In the online sphere, you can read many articles showing empirical evidence that shows the minimum wage is not a bad idea. Recently, I read an article that basically argued that evidence shows that despite what economists have been saying, raising the minimum wage did not cause unemployment, or that unemployment increased incrementally or minimally. And basically econometric analysis does not have conclusive results one way or the other. 

This economics paper attempts to explain to economics students why such views are wrong, and that the minimum wage is not a good idea. In fact, most - but of course not all - distortions of the free market are not good. To steal some beautiful lines from J. M. Keynes, we "have involved ourselves in a colossal muddle, having blundered in the control of a delicate machine, the working of which we do not understand." I stole these lines because I like them. 

Before I begin, and to rebut an article that said most ECONS101 teachings on the minimum wage are wrong, the economic theory that we promulgate is as such:

A minimum wage is a minimum legislated or mandated wage. 

If it it set above the market clearing level, then it will be effective - and if it is set too low, then it will not be effective as the market clearing equilibrium wage will be higher than the legislated or mandated wage. 

In economic theory, assuming a perfectly competitive market, when the minimum wage is effective, the quantity demanded of labour should decrease, while the quantity supplied should increase. Assuming that this happens, then there is an increase in unemployment, ceteris paribus (the famous all other factors remaining constant). And the higher the minimum wage, the higher the unemployment should be. 

However...

Fact: Not all countries experienced a fall in employment after implementing minimum wages. 

Does this actually mean that there is something wrong with the economic theory? No - it means that either the wage is set too low, or other factors weren't held constant. And indeed that was the case. When I was reading my undergrad in the UK for a stretch the minimum wage was 7 pounds an hour. Assuming one worked 10 hours a day, that was 70 pounds. And for a month that would have been 70 x 20 working days, which would be 1400 pounds. Now, given that my UK-based classmates earned 50,000 pounds per year, and some even earned much, much more... You can come to the conclusion that maybe the real market clearing wage rate was much higher. Not a real criticism. In other cases, when you examine the evidence, it turns out that minimum wages don't mean much when the economy is undergoing a boom. When real wages are rising, minimum wages don't mean that much. 

But for those countries which did not have a boom or where minimum wages were really high, youth unemployment rose - because the people this policy was supposed to help were precisely the ones hurt by it. You can check out the facts for your own consideration - but it is true that some studies show that unemployment rose among the groups with the minimum wage. In some countries, youth unemployment is much higher than other types of unemployment measures. Nothing is wrong with the theory, but it just needs to be refined. 

Now, as for the economic arguments that some labour markets are monopsonistic or monopolistic-competitive or oligopolistic etc, that is an argument for another time - and I promise you that eventually I will come back to discuss that. 

To be clear, there are other reasons - non-economic reasons - why there could be minimum wages. I don't believe such normative economic analysis, but they are there. This economic paper is not one of them. Just do not diss simple economic models because of a wrong understanding of how they operate and explain - or do not explain - the economic world. 

JC Economics Essays - Special thanks to our readers for their kind contributions. Just like the previous opinion piece, this economics perspectives essay is also contributed by SS.  

At JC Economics Essays, we focus on strong economic writing skills, clear and direct explanations of core economic concepts, and the use of relevant, real-world examples to strengthen arguments. And we also strengthen students’ understanding of economics as a subject. We also focus on critical thinking and evaluating economic arguments. Thank you for supporting us, and cheers! 

What is the economic impact of Brexit on Asian economies?

This economics post explains and analyses the possible economic consequences of Brexit on Asian economies and was created through synthesising a few economics essays. 

On 23 June 2016, in a historical moment that will be a discussion topic that would stand the test of time, citizens of the United Kingdom (the UK) voted in a national referendum on their continued membership in the European Union (the EU), ultimately choosing to leave. 

This huge event is called “Brexit”. 

What is the economic impact of Brexit on Asian economies? 

Brexit has negatively impacted global financial markets, causing economic volatility and huge losses of trillions of dollars in equity value. 

Meanwhile, the UK pound has seen the largest drop by any major world currency in recent history, and its largest drop since 1985.

On the surface, the UK leaving the EU would not matter that much economically to Asia’s economies. 

Although the UK is prima facie the world’s fifth-largest economy (now that is not the case any more, apparently as an immediate economic impact of  Brexit, because it has been overtaken by France), the UK is not actually one of Asia’s biggest economic customers. 

Except for Cambodia, Vietnam, and Hong Kong, most exports from most economies in Asia to the UK are relatively small as a percentage of total economic output. 

For Singapore, a small and open economy located in Southeast Asia, the UK is a relatively small customer. Singapore’s exports to the UK totalled S$7 billion in 2015, out of S$530 billion in total exports. 

Quite simply put, in the immediate or short term, the economic impact has been rapid and direct so far. In the immediate term - it's the economic impact on markets and currencies that matter currently. 

But the real and longer term impact of a “Brexit” – for Asia and the rest of the world – is much bigger than just merely market or economic volatility. 

The real economic impact of Brexit would be more subtle than any immediate effect on trade or markets. 

It would represent an economic slowdown – and maybe the first steps of a economic reversal – of the globalisation that has defined markets in recent decades. 

There are many definitions of globalisation, but in this case, globalisation refers to the increasing integration and interdependence of the world’s economies arising from increased international trade and greater international mobility of factors of production like capital, labour, and enterprise across international borders. 

Asia has a lot to lose from this rollback of international trade or decline in economic globalisation. 

Many Asian countries rely heavily on international trade. 

For instance, Singapore’s international trade stands at 351 percent of its GDP, and it amounts to 439 percent of Hong Kong’s GDP. Growth in international trade has been slowing in recent years, and Brexit could slow trade and growth down further. 

For example, the UK takes fully three-quarters of Singapore's investments in the EU with big companies like Comfort DelGro and Frasers having an international presence in that country. The UK out of EU could lead to significant fall in Singapore's exports to the EU, and Singapore international businesses could suffer write-downs in economic value on their balance sheets.

If there is a rise in protectionist sentiment in the UK, this might spread to other countries as well. 

Protectionism refers to economic policies aimed at restricting international trade between countries, designed to protect domestic businesses and workers from international competition, while free international trade refers to the exchange of goods and services across international boundaries. 

Recently, other than just the UK government, many governments (and a famous US Presidential candidate from "across the pond") have been adopting or promoting protectionist measures in the belief that this would offset the impacts on their economies from international trade and globalisation.

China would likely have some major economic concerns. The EU is an even bigger destination for Chinese goods than the United States.

The EU is China’s largest trading partner, and as China enters an era of slower economic growth, the timing of the breakup of the European Union couldn’t be worse.

For China, the UK's decision to eventually extricate itself from the European Union’s common market will be a disappointing move. Chinese Premier Li Keqiang has taken a particular economic interest in the UK, reciprocated in recent years by Chancellor of the Exchequer George Osborne. Last fall, London became the first international financial hub to issue renminbi-denominated debt after Xi Jinping’s visit there. Brexit will be an economic setback for the ongoing internationalization of renminbi as London’s international relevance as a global financial hub is diminished as a result of Brexit. 

Brexit could also challenge some of the international trade deals focused on further opening the rest of the world to ASEAN economies. The Trans Pacific Partnership (TPP) and the Regional Comprehensive Economic Partnership (RCEP), for example, are aimed at cutting international tariff barriers and promoting international trade with some of the world’s largest economies. 

Brexit could also mark an economic setback for China’s long-term economic goal of a free trade agreement with the EU. London had emerged as one of the most eager advocates for a China-EU FTA. 

With the UK now exiting the economic bloc, none of the other major EU states seem keen to ink an economic deal with Beijing. An FTA with the UK alone might be politically simpler to negotiate, but will not have nearly the same economic benefits for China. 

Remember that a Free Trade Area (FTA) refers to a trade bloc where more than two countries agree to engage in free trade with one another while maintaining members’ own individual levels of external barriers against non-member nations.

In the longer term, no one really knows what the economic impact will be - but it certainly will not be a walk in the park for UK or Asia, or Singapore, and only time will tell if Brexit really was a good economic decision ... 

or if the economic experts were right in saying that this was one of the worst economic decisions of all time. 

JC Economics Essays is an economics website which has a wide and useful range of economics resources and free lesson materials for students' own use, such as economics essays at the A level standard (H1, H2, H3, and A level standards), and undergraduate and masters economics essays. The main focus is on A level economics essays, but GCE, GCSE, AS, AO, and H1/2/3 economics essays are in this site too. In particular, JC Economics Essays has model A level economics essays and responses that students could use as an easy and relevant reference for learning, as well as relevant tips and techniques for writing strong and well-argued essays. A whole range of useful case study tips, essay writing techniques, and relevant opinion pieces on a relevant range of economic topics will help you learn economics effectively. Thank you for reading, and cheers.

What is the economic impact of Brexit — what happens now that Britain has voted to leave the European Union (EU)?

This economics post discusses how economic growth, trade, immigration, international politics, and more would be affected by a split with the EU - today's historical Brexit

The immediate economic impact of today’s historical event was that Britain’s exit from the European Union shocked global economic assets and financial markets and unleashed massive economic uncertainty.

First, the pound plunged to its lowest level since 1985.

Second, investors fled risky economic assets and turned to the dollar and the yen, sending them soaring.

Third, the Bank of England earmarked £250 billion, about US$344 billion, for potential stability measures, which definitely means that the economic experts expect some turmoil in the near future.

Of most immediate economic consequence, Britain’s vote to leave Europe sent global markets on a wild descent. 

Investors gasped at this major damage to the global economic landscape and decided it looked dangerous and uncertain, and that they preferred to pull their money out of riskier places, and place their money in safe havens, for example Japan which saw the soaring of the yen today (24 Jun, Singapore time).

However, it has to be said that few economists expect that Britain’s departure from Europe will set off a full global financial crisis like the particular economic disaster seen soon after the collapse of the investment banking giant Lehman Brothers in 2008. 

Yet, it should also be said that at the time, that situation was not seen as a major economic blow to the world, and it turned out that the economic situation worsened rather terribly later leading to the global financial crisis.

Economic growth or lack thereof?

Nonetheless, most economists think that leaving the bloc would slow the UK’s economic growth. In a detailed assessment, professor Nick Crafts estimated that the EU directly raised UK’s economic prosperity by about 10 per cent, mainly due to increased economic competition and better access to the single European economic market. 

Many economic questions now linger: what would a new Ministry of trade have to do after the UK broke off with the EU to replace current trade networks and economic relationships? Sign a trade deal with the remaining 27 members of the EU each? 

Should the UK now come to an arrangement with about 50 additional countries with which the EU has preferential deals, or all the remaining 161 members of the World Trade Organisation (WTO)?

Apparently, the Leave campaigners started their campaign suggesting that the UK could maintain access to the European single market, they now think the UK could still trade with the EU under WTO rules and eventually strike a bilateral deal with the trade bloc, and yet not be a part of the EU’s custom union. Such an accord is likely to take years to negotiate, say experienced economic negotiators.

Economic impact of migration? Immigration as an issue?

Britain’s net migration stood at 333,000 in 2015, the second highest figure on record and more than PM David Cameron’s pledge to bring the figure down to the tens of thousands.

It has to be said that net immigration from EU countries, particularly central and eastern European member states, rose rapidly after their accession to the EU and recently when citizens of Bulgaria and Romania also acquired the economic right to work and settle in the UK.

Only by leaving the EU can the government reduce the numbers of EU migrants. That would be fair to say. 

However, the issue is that even if EU net migration was cut to zero, Britain would have far more migrants from non-EU countries than the prime minister’s tens of thousands pledge. Globalisation is by far the bigger issue. 

As long as Britain’s economy is doing well internationally, it attracts immigrants. But now that Britain has left, its economic growth may slow or even fall, thus leading to a decrease in migration - in that particular sense!

What does the future bring? No one knows?

Brexit hurts economically speaking.

The main groups of economists who have published economic studies in the campaign use different economic models and different datasets but speak with unanimity on this subject.

There are many negative economic results: the UK erecting trade barriers with the EU would hit economic prosperity very badly, which is not easily replaced by greater economic free trade elsewhere in the world. Leaving the economic bloc would afford the UK little additional regulatory freedom and there could be negative long-term economic consequences from the short-term upheaval of Brexit. 

On balance, experts and economists overwhelmingly think leaving the EU is bad for the UK economy.

One final point – on that 350 million pounds claim…

However, in the final analysis, no one really knows what happens now. The collective imagination leads to dark places.

In particular, as a final note on this sad day, one major piece of news that is making the rounds is the fact that some of the Leave camp's economic claims turned out to be not true. One major example is:

“The EU now costs the UK over £350 million every week – nearly £20 billion a year”

- by the Vote Leave campaigners

Well, yes it turns out that EU membership does come at a cost. Sure it does! 

Nothing is free in the world; there is no free lunch. 

Yes, the UK pays more into the EU budget than it gets back, but it turns out that the UK does not pay £350 million a week. In fact, the UK’s discount, or rebate, reduces what the UK should pay. Some of the so-called given away money came back in EU payments funnelled through the government, so the government’s ‘net contribution’ was around £8.5 billion, or £160 million a week. The EU also spends money directly in the UK (many economic articles show where EU grants go, especially to some poorer cities in the UK) – well, since this is an academic article, especially in grants to British researchers, for instance.

Therefore, it turns out that one of the major claims by the Leave camp was fradulent, fake, false, inaccurate. 

Maybe Brexit is a mistake. Only time will tell.

JC Economics Essays – Today’s post is a special news report on a historical economic issue. It is a huge and momentous event in the world’s economic history. 

Special thanks to FT, ST, HP, and SS for synthesising this news report on Brexit and its economic impact. 

JC Economics Essays is an economics website has a wide range of economics resources, such as economics essays at the A level standard (H1, H2, H3, and A level standards), and undergraduate and masters economics essays. In particular, JC Economics Essays has model A level economics essays and responses that students could use as a reference for learning, as well as tips and techniques for writing strong and well-argued essays. Thank you for reading, and cheers.