Foundations of Economics MN1017, University of Leicester, UK

Assessment Brief

Choose one of the essay topics below and write an essay of up to 1500 words (excluding references, check the list of penalties for exceeding this limit at the end of the assessment brief).

Topic 1

British Rail operations were privatised in 1994-1997. Nowadays, the passenger services are provided by private train operating companies. They usually bid for seven- to eight-year contracts to run individual franchises. In the past, there have been calls for renationalising the provision of passenger services (so that the state would operate trains etc., just as it does with tracks, signalling and large stations). Discuss advantages and disadvantages of renationalisation in this context. In doing so, you should include the following issues:

natural monopolies and competition

pricing and consumer/producer surplus,

efficiency.

Topic 2

In the United Kingdom, access to motorways is typically free with only limited exceptions. However, they are provided as toll roads in many countries such as Italy (Autostrade) and France (Autoroutes). Toll roads are frequently said to be a typical example of club goods. Explain the advantages and disadvantages of toll roads compared to toll-free roads by focussing on the nature of club goods and/or public goods. In doing so, you should include the following issues:

congestion

social benefits and costs

investment.