[Saelie]

(Original post by meittarn)
Did anyone do the cyclical/demand deficient unemployment question? Im curious what you wrote I totally screwed mine up.
Harve - your points for part B are really good I actually didn't have too much to write. I'd be shocked if you don't get a 6/7
And for question 1 theory of the firm I wrote about oligopolies, didn't mention monopolies because monopoly is one dominating firm, and I talked about collusion, kinked demand curve and non-price competition.

I think you should probably have drawn the cyclical (demand-deficient) unemployment graph, and explained it, and also drawn and explained the business cycle and/or an inward shift in AD (as that causes it).

[mintaltoids]

(Original post by Saelie)
I think you should probably have drawn the cyclical unemployment graph, and explained it, and also drawn and explained the business cycle and/or an inward shift in AD (as that causes it).

As far as I'm aware I don't think there is a cyclical unemployment graph!

[arra]

(Original post by mintaltoids)
As far as I'm aware I don't think there is a cyclical unemployment graph!

Yes. Just demand-deficient unemployment. You can show both the Keynesian sticky prices downward direction or just a simple AD shift to the left.

[Saelie]

(Original post by arra)
Yes. Just demand-deficient unemployment. You can show both the Keynesian sticky prices downward direction or just a simple AD shift to the left.

^what I meant.

[Hyaline]

There is a cyclical unemployment diagram. I actually used 2 diagram in the Q, AD shifting to the right and the demand deficient unemployment with wages being sticky downwards diagram.

[meittarn]

(Original post by Saelie)
I think you should probably have drawn the cyclical (demand-deficient) unemployment graph, and explained it, and also drawn and explained the business cycle and/or an inward shift in AD (as that causes it).

That is what I did. But as I was looking through a study guide our teacher gave us there was a demand-deficient unemployment graph were there AD falls but real wages remain the same. That is why I started freaking out

[arra]

(Original post by meittarn)
That is what I did. But as I was looking through a study guide our teacher gave us there was a demand-deficient unemployment graph were there AD falls but real wages remain the same. That is why I started freaking out

In the neoclassical long run, if the AD falls, the Real GDP readjusts to the same level.

In the Keynesian short run, prices are sticky in the downward direction and the wages (not real) remain the same in the downward direction.

It could be either of the above two that you're talking about.

[mintaltoids]

Right okay, an AS/AD graph, but not specifically a cyclical unemployment graph where it would be one of the axis labels or anything?

[NAB]

(Original post by arra)

Oh an offshoot of the Veblen good I briefly mentioned (and cited myself as evidence :/, hope its ok) is "consumer ignorance" I don't know if that's the term. I said even at a common, non "veblen" type restaurant, higher prices imply "better" things, and consumers have psychological ignorance and are predisposed to think that quality correlates with price. And I said I myself have done this at shoe stores, but I kept the writing pretty professional and dry and all.

Eep, didn't write nearly as much detail. Just wrote about how Veblen and Giffen goods repeal the law of deman, explained how the income effect doesn't apply to Giffen goods, wrote about snob effect for Veblen, gave examples and drew the diagram. How much do you think that will give me?

[arra]

(Original post by NAB)
Eep, didn't write nearly as much detail. Just wrote about how Veblen and Giffen goods repeal the law of deman, explained how the income effect doesn't apply to Giffen goods, wrote about snob effect for Veblen, gave examples and drew the diagram. How much do you think that will give me?

I think that will be enough for full marks if your diagrams are good. Isn't it that the income effect applies to giffen goods and that the substitution effect does not?

[NAB]

(Original post by arra)
I think that will be enough for full marks if your diagrams are good. Isn't it that the income effect applies to giffen goods and that the substitution effect does not?

Doh, I may have mixed the terms up, but I'm certain of the explanation. Hope I don't get penalized too much for that. Would be happy with a 7-8.