AQA Economics 18th May 2012 Unit 1 Exam

has anyone attempted question 9 in the Econ 1 January 2006 paper. the question is sooo stupid. i got the answer as D but the answer is A. i understand why it is A but its really stupid.

anyone else agree.

http://store.aqa.org.uk/qual/gceasa/qp-ms/AQA-ECN1-1-W-QP-JAN06.PDF

Your answer would only be right if it was a maximum price! Read and think about the answer carefully, I did this yesterday and almost fell into the same trap
Since the equilibrium is above the set min price, it will not even move as the price it is selling at is above the minimum price set - since its over no change.
If it was a maximum price then it would be forced down to Pmax.

The January 2012 paper included a question on Merit goods. Therefore i predict that there will be a question on demerit goods for this exam.

One of my tips is to learn the definitions especially demand and supply. They can get you knowledge marks in the exam. For example on part C after you have drawn the graph write down a definition of demand or supply. This gives you about 2 marks. Relevant definitions can also be included in the start of Part D.

Another tip i can give is to do loads of past papers. You will notice that the same multiple choice questions are used year after year so if you know the answers for those you can pick up quite a lot of marks when you sit the multiple choice section.

Is this the same exam which has a 25 mark multiple choice questions and then another group of questions? Anyone got any tips on helping both? Thanks

for multiple choice i did a lot of past papers and most of the time they repeat so its good to them. Also look at the edexcel economics papers because they have multiple choice question but you have to explain it so it good to look at the edexcel mark scheme.

for 5 mark remember the definitions

8 mark
-highest-lowest compare both
-range highest -lowest

12mark
definition for example demand and supply or msc mec
diagram explain link it to the question
talk about ped or pes

25 mark
definition
1 policy
positive
negative
evaluate
2policy
positive
negative
evaluate
conclusion leave it to free market or government explain
secont policy

The key point in evaluation is you MUST criticize the form of intervention/theory/whatever. You need to explain how it relates to modern day society using current information, stating why in current circumstances it may not work. IE The government could use expansionary fiscal policy to increase spending but would they really, when the current coalition government is making cuts left, right and center to decrease the deficit?

In your example why could taxation NOT work on the demerit good? On cigarettes for example, consumers get addicted to them and they have an inelastic demand, making taxation less effective to reduce quantity demanded and consumed.

You should make these evaluations as you go on, so firstly explain the theory; use a diagram; use sources and finally say why it may not work. In another example, subsidies may not work if demand for the product is inelastic (draw inelastic graph). Remember to keep quoting data, you cannot get above 21 marks if you don't quote data and evaluate, and to achieve top marks you should state current facts, like today's interest or inflation rate.

Hope I helped

one quick question:
is it better to do evaluation right after i mention a policy. for examply subsidy can reduce price...BUT ... it depends on price elasticity.
or do i separte one paragraph for evaluation?!

what is the difference between government failure and market failure?
do we need to know how to draw those diagrams for negative externalities and positive externalities for section B of the paper or do we just need to know them to answer the multiple choice questions?

for section b the possible diagrams we can be asked to draw for econ 1 are simple supply and demand, price ceilings and price floors, buffer stock, production possibly boundary. is their anything else? how many diagrams does everyone include in the 25 marker on average in addition to the supply and demand diagram?

i found the notes from tutor2u.net are so useful!!!
my teachers didnt really teach us how to evaluate and work on the 25 marks questions but in that web we have all the information inside about evaluation
go check it out

ps!! add oil on friday everyone

AD=C+I+G+(X-M)

have you got the link to the part where it explains the evaluation please? i cant find it lol

Isnt Aggregate demand to do with macro ie. unit 2?

Also i caught someone talking about exchange rates, what do we need to know about them? I thought that was macro as well?!


And finally, can someone help me on this rather maths based multiple choice question:



Answer is D

aggregate demand is to do with macro
you need to learn how monetary policy such as interest rates affects the exchange rate i.e. a high interest rate will attract international investors who will wish to purchase british currency inorder to invest in UK banks due to high interest rates. they will therefore demand more pounds so the pound will become stronger in contrast to other currencies. the effect on this will be that it will be cheaper for uk nationals to purchase imports from abroad because the pound will be strong and therefore the pound will buy alot more international currency. however it will be difficult for domestic firms to compete in the international market because home produced products will be more expensive on the international market due to strong pound which is caused by a high interest rate and yeh this is macroeconomics. i hope you get the idea.

and to answer your multiple choice question;
because the government has intervened and set the price to a minimum of £18 this means that by looking at the table only 6000 units will be demanded however 10,000 units will be supplied. this is a situation of excess supply. left to the free market this will cause the price of agricultural goods to decrease. to avoid this problem of excess supply the government will intervene and purchase the excess stock.

the excess stock is 4000 units (10,000-6000)

the government has to buy 4000 units of stock at £18, which is 18x4000=72,000 (answer D)