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I'm starting AQA Economics for AS in September. What should I expect and how can I prepare myself? Thanks.

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Reply 2661

hmmwhatever

Why does the BoP current account trade deficit actually matter? I keep thinking of an idea where there is a global world economy where trade is constant and so deficits don't matter because people talk about the UK trade deficit but why group countries together like that you may aswell just group the world deficit/surplus and it wouldnt make a difference. The only problem is it doesn't really show the detail of trade but then again even within a country more growth is seen in london or a few cities compared to rural areas and yet the trade is still grouped,
I can't get my head around why the trade deficit is seen as important??
I know I probably sound really stupid but i really want somebody to explain this to me properly

Reply 2662

NikolaT

15

Original post by Edminzodo

I'm starting AQA Economics for AS in September. What should I expect and how can I prepare myself? Thanks.

Posted from TSR Mobile

You won't be able to get much of a headstart until you start learning about the essential technicalities in the first few lessons.

If you like, start reading articles from BBC News -> Business. That'll give you a flavour. Particularly articles on the UK economy (for instance, if manufacturing has increased over the past few years) are recommended.

You will be reading up regularly during the year as well (if you're thinking of achieving a good grade, anyway!).

Reply 2663

Vadevalor

3

Game theory: in prisoner's dilemma why is it that (don't coorporate, don't cooperate) is the only nash equilibria? What about (cooperate,cooperate) ? Isnt the best response to another prisoner's action to cooperate, cooperate?

Reply 2664

alex_hk90

19

Original post by Vadevalor

Game theory: in prisoner's dilemma why is it that (don't coorporate, don't cooperate) is the only nash equilibria? What about (cooperate,cooperate) ? Isnt the best response to another prisoner's action to cooperate, cooperate?

No - because if the other prisoner cooperates then you're better off not cooperating as the outcome is better for you than if you did cooperate.

Reply 2665

rhysvol1995

Can somebody explain to me the difference between the 'role of a regulator' and the role of competition commission??? Or are they the same thing? Confused!

Reply 2666

Major-TomNeville

Would this be a good definition of development:

Improvements in economical, social and political conditions.

Thank you

Reply 2667

jvatsk

any study tips for edexcel econs unit 4?

cheers

Reply 2668

Procrastin8R

1

In this article, it mentions the sale of student loans to private companies in order to "reduce government debt". Being a novice at Economics, I fail to see how this would be beneficial for the private companies. I understand that the government would get money in return for these loans (while the companies would get the loan repayments), but surely there would be no point in buying the loans if the buying price was the same as the total loan repayments? Thanks in advance to anyone who can answer my questions.

Reply 2669

alex_hk90

19

Original post by Procrastin8R

In this article, it mentions the sale of student loans to private companies in order to "reduce government debt". Being a novice at Economics, I fail to see how this would be beneficial for the private companies. I understand that the government would get money in return for these loans (while the companies would get the loan repayments), but surely there would be no point in buying the loans if the buying price was the same as the total loan repayments? Thanks in advance to anyone who can answer my questions.

Does it say that the buying price would be the same as the total loan repayments? I would guess it would be significantly less.

Reply 2670

Procrastin8R

1

Original post by alex_hk90

Does it say that the buying price would be the same as the total loan repayments? I would guess it would be significantly less.

No it doesn't; I was just speculating. So basically what is happening is that the companies are banking on the fact that most of the students will be able to pay back their loans, so they make a profit on the buying price, right?

Reply 2671

alex_hk90

19

Original post by Procrastin8R

No it doesn't; I was just speculating. So basically what is happening is that the companies are banking on the fact that most of the students will be able to pay back their loans, so they make a profit on the buying price, right?

Enough of the students for them to make a profit on the buying price, yes.

Reply 2672

Procrastin8R

1

Original post by alex_hk90

Enough of the students for them to make a profit on the buying price, yes.

OK, thanks for your help.

what is elasticity?

May please help in solving this question

Consider the utility function U(x) = log (x), let Px=2 and λ=5, Derive the consumer equilibrium and check the second order condition ?

Reply 2675

alex_hk90

19

Original post by Abu Talha

May please help in solving this question

Consider the utility function U(x) = log (x), let Px=2 and λ=5, Derive the consumer equilibrium and check the second order condition ?

How far have you got so far? On first glance it looks to be a fairly standard utility maximisation problem - where are you getting stuck?

Reply 2676

Abu Talha

Im not able to understand the whole equation.

Till theory itz clear but now how to derive it through graphical representation im not able to do so.

Also im not able to understand the first order condition and second order condition.

Reply 2677

alex_hk90

19

Original post by Abu Talha

Im not able to understand the whole equation.

Till theory itz clear but now how to derive it through graphical representation im not able to do so.

Also im not able to understand the first order condition and second order condition.

Well - it's been over 3 years since I touched any of these kind of questions but I'll have a go anyway (at the very least some of the logic may be right if not the actual answer):

Original post by Abu Talha

Consider the utility function U(x) = log (x), let Px=2 and λ=5, Derive the consumer equilibrium and check the second order condition ?

max U(x) = log (x)[br]w.r.t. Px = 2[br]L = log (x) - \lambda (Px - 2)

\frac{\delta{L}}{\delta{x}} = \frac{1}{x} - \lambda P

\frac{\delta_2 L}{\delta x^2} = -\frac{1}{x^2}

FOC: \lambda P = \frac{1}{x*}

x* = \frac{1}{\lambda P} = \frac{1}{5P}

SOC: x > 0 => \frac{\delta_2 L}{\delta x^2} < 0

Sorry for the poor formatting - I haven't used LaTeX in years either and can't remember how to make it look nice (was enough hassle just getting the fractions to work as expected!).

Hope this helps and apologies if it's completely wrong!

Reply 2678

Abu Talha

Thanks a lot... But can you now provide the graphical representation of same

Also please provide explanation of the solution you have provided....

(edited 9 years ago)

Reply 2679

alex_hk90

19

Original post by Abu Talha

Thanks a lot... But can you now provide the graphical representation of same

Also please provide explanation of the solution you have provided....

I'm not sure how to draw graphs on here but you would just plot/sketch the equations and show that the solution is at a maximum.

It's a very standard solution - have you studied using Lagrangian multipliers / partial differentiation to solve utility maximisation problems? It should be explained in your Micro textbook / lecture notes. FOC is first order condition (to find stationary point) and SOC is second order condition (to check that it is a maximum).

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