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

Specification:

  • Externalities, income elasticity of demand and market failure

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

  • Explain the concept of income elasticity of demand and explain what YED figure you would expect for a luxury fashion resale item

  • Draw a positive externalities of consumption diagram for second hand clothes.

  • Explain what a ‘Veblen good’ is and discuss whether goods in a resale market can ever be defined as such

  • Using the information in the video, explain how there could be market failure within the luxury fashion resale market

Gavin Simpson and Pete Clift, Economics In Ten podcast

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