This article picked by a teacher with suggested questions is part of the Financial Times free schools access programme. Details/registration here.

Specification:

  • Opportunity cost, demand and supply, externalities, government intervention

Click to watch the short video below and then answer the questions:

  • Explain the concept of opportunity cost using the case study provided

  • How is the price mechanism working to persuade more farmers to grow food rather than crops for biofuel?

  • Explain how imperfect information is creating problems when deciding whether biofuel is good for the environment

  • Explain how government intervention is distorting price signals when it comes to resource allocation

Gavin Simpson and Pete Clift, Economics In Ten podcast

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