AS Economics Revision - Changing Market Prices for Cars

This chart provides some price information from the markets for new and used vehicles in the UK.

I am using it as practice for my students in describing economic data - one of the skills that is tested on their Unit 1 micro paper.

For example

“Using the extract, identify two features of the changes in vehicle prices over the period shown by the data” (8 marks)

* Are there any underlying trends in prices?
* Using the price index data, can students calculate some percentage changes to show the scale of price movements?
* Will students pick up the dip in new and used vehicle prices in late 2008/early 2009 - but flag up the much steeper decline in used car prices?
* I would hope that my stronger students would be able to infer from the data what has happened to the real cost of vehicle purchase over the last ten years - even though CPI data is not included in the chart.

Explanation questions might ask students to explain the reasons for the long term decline in used car prices or perhaps link the recession to market demand and prices for new vehicles in 2008-09.

This chart is a good prompt for broader discussions - for example in:

* Reinforcing the idea of cross-price elasticity of demand
* Understanding how changes in exchange rates can affect UK vehicle prices
* Awareness of other demand and supply-side factors that may affect average vehicle prices
* Understanding that the cost of vehicle purchase is just one aspect of the total cost of owning and running a vehicle.