ECON 1 AQA AS level resit May 16th 2016

There are already firms who are able to do fracking. Once legalised the market will be open in the UK. However it is possible to maybe get the chain of reasoning marks for what you stated. I'm not sure about the graph

Did anyone for the 12-marker, mention that since shale gas production has not taken off yet, as suggested in the extract "if fracking is given the go ahead" it is likely the start up costs for fracking will be significant, so therefore monpolies could develop, as a result, the government should intervene through regulation to ensure fair competition as monopolies could restrict output and increase price? Diagram just a simple demand curve showing how monopolies could do this? I seem to be the only one that's done this

lol

Snake0, 1v1? What did you put? I read somewhere you didn't even use a diagram in your 25-mark answer?

Yes true, there is firms who are allowed to do it, but in relation to extracts, its stated that it was not happening yet with "if firms are given the go ahead", the diagram is a simple demand curve shown in all AS textbooks, just a higher price and lower output then what would be competetive, fracking isn't happening in the UK yet either, or at least its minimal, so i think its a legit answer, i did mention they need to regulate to ensure environmental damage doesn't occur as an adittional point, so.. There's no right answer for that question either, it said "suggest reasons why fracking MIGHT need to be regulated", so i think in relation to the cost of fracking, the potential for monpoly is a legitimate answer.. Who knows

You misunderstand me. There are firms already who have the equipment to frack i.e US firms. once the go ahead is given these firms will start to frack immediately and hence yes these firms may increase the chance of monopoly due to the construction of entry barrier from the high sunk costs of equipment. However the 12 markers are usually more restrictive and although it is a perfectly reasonable answer it didn't immediately come to mind. Like you say, who knows

Jp I heard you're going to Sheffield Hallam...

did anyone for the 12-marker, mention that since shale gas production has not taken off yet, as suggested in the extract "if fracking is given the go ahead" it is likely the start up costs for fracking will be significant, so therefore monpolies could develop, as a result, the government should intervene through regulation to ensure fair competition as monopolies could restrict output and increase price? Diagram just a simple demand curve showing how monopolies could do this? I seem to be the only one that's done this

i did this!

For extract 1 I talked about the government imposing taxation due to the negative externalities are created e.g. harm to the environment and I referred to the data, have I done it completely wrong??

really?

for the 12 marker in context 1 I drew the negative externalities graph, defined what a negative externality was, and also what a commodity was i.e referring to the gas and how it is used to produce electricity which is a necessity. Then I spoke about how regulation i.e a price minimum would be required to set production at the socially efficient point to reduce over production. Thus implicating and defining that electricity produced from shale gas from fracking is a demerit good. Then linked this back to how this would reduce chemical affects on the environment as well as tremors, this reducing welfare loss--referring to the welfare loss area of the diagram.

the 25 marker was more expansive -I explained the issue set out by the question and extract, defined government failure, and one other I can'e remember.

I drew a monopoly diagram and then explained how the market for energy is concentrated, inferring that the supernormal profit is a symptom of such a market structure. supernormal profit is rarely used for innovation as the monopolistic/oligopolistic firms have no threat of competition and thus they would most likely not aid the development of renewable sources especially when oil is so cheap at around $48 a barrel of brent crude. This justifies therefore the need for government intervention etc, potentially in the form of subsidies for smaller (renewable energy) firms to overcome these entry barriers and develop renewable sources -referring to the welsh example in the extract. I then evaluated after expanding saying how subsidies are unlikely due to the current £110bn budget deficit (2015).

Then I made a point for market freedom to aid the development of renewable source for example how as fossil fuels are depleted the supply of them is ergo reduced and the price should thus inflate as demand remains stationary due to energy being pretty much a necessity. thus I drew a supply demand graph........ evaluated again and made anther point of which I cannot remember-linked to government failure however.

Conclusion was along the lines of that subsidies would be unlikely due to my previous statement. However there is a need for government intervention as large energy firms face little competition so are not innovating in renewable energy. More cost efficient methods of intervention include legislation i.e. the competition and markets authority to reduce entry barriers into the market.

Of course there are many other topics to include but that's the broad outline of what i put

Yep i did! What did u write for the 25 marker

Messed the 25-marker up a bit tbh, wrote about how there is not enough production of renewable energy in the free-market, the free-market has thus already failed, so i drew a positive production externality, then spoke about how a subsidy can help to achieve these, I then drew the same externality diagram but with a subsidy in it, then my next point was about regulation I think, can't really remember what I put.. Something about competition in renewable energy promoting the production of it or something.. Finished off with a conclusion where i mentioned the possibility of taxing non-renewables and using the revenue gained to subsidise renewables.... But i didn't really put an argument for the free market as I percieved from the texts that the free-market had already failed... Not sure...

What u guys reckon grade boundaries will be
60 for A ?
54 for B?

They've never exceeded 59 in the whole lenght of the course, it's usually 58, above 60 would be pushing it