AQA A2 Economics Unit 3 - 12th June 2012 PM

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I thought it went quite well! I did the poverty question and oligopoly one.

The part b of the poverty was almost identical to one that has come up before #easymarks

And I think I wrote similar stuff to you guys.

Macro next though :frown:

Reply 461

Jakeeyy

Original post by joshadams

Yeah i put similar things, didn't put much about elasticities which is fundamental to kinked demand which was idiotic and struggled thinking about examples for the second part urgh!

I drew a supernormal profits diagram for collusion, so at least i get some marks haha.

Reply 462

Jakeeyy

Original post by arz15

How did you tackle poverty?

Reply 463

scottb3scott

I did the question on environmental market failure and oligopoly.

I made points on:
-Quota- restricts supply to a socially optimum level but decreases supply so there is government failure.
- Tax- Decreases supply to a socially optimum level, but if demand is inelastic there will be government failure.
- Pollution permits- pollution permits only charge inefficient firms whereas a tax doesn't matter how efficient a firm is its the same regardless of how much they pollute. Government failure might occur if they are overgenerous with allowable pollution.

So overall pollution permits are the best option as they provide the best incentive for efficiency. They're the least likely too cause government failure. In the long term government will be able to issue a better amount of allowable pollution once they understand what is an acceptable level.

Oligopoly (wasn't a big fan after i chose this one)

Did the kinked demand curve to show interdependence
i said that uncertainty was related to price wars as firms might try to increase market share to eventually become a monopoly so they can profit maximise.

Government intervention
- Reduce barriers to entry- this will create a more contestable market due to the possibility of hit and run entrants able to erode away supernormal profits. Unlikely to work as fixed costs will be far too high.
- Prevent non-price competition- if firms are forced to compete on price, inefficient firms will be forced out of the market. The remaining firm after the price war might be a monopoly but it will have larger economies of scale so as long as its regulated the market will be better off.
-Prevent collusion- if oligopolies are able to collude they will act as a monopoly without the benefit of an increase in economies of scale. They will profit maximise, restricting output and increasing price. This will reduce consumer welfare. To prevent collusion the government should issue fines against any restrictive practices.

Can someone please say what they think I've got?

Reply 464

Jakeeyy

Original post by joshadams

I drew kinked demand wrong aswell, too many kinks.

I drew the kink at the end, but not at the beginning. Oops.

Reply 465

rub em out

How did everyone get 18.7% for the poverty context? Im assuming you're talking about the one with the difference in pay between the years, I got like 540% and I checked it loads of times :L

Reply 466

theajd

I think this paper was decent.
I done the Poverty then Income question in Section A.
My 2 causes for poverty were wage differentials for skill levels and natural disasters and the governments in LEDC's inability to fix infrastructure/create jobs after floods/earthquakes etc although I'm not sure natural disasters are actually a cause in Economics?
For the 25 marker on equality of income, I spoke about progressive taxes and for the source I spoke about improving training and getting skills for workers as typically more skills = higher income. However, I said if labour supply was increased through training and skills, employment would rise but income would fall, therefore inequality would rise even more. So perhaps govt failure would arise. The only way income and employment would rise is if labour demand also rose.

Reply 467

JulietheCat

I did the poverty context. Got 18.6% for the calculation and just described the min wages - which one was the highest and which one was the lowest.

In the essay, I said that fiscal policies such as progressive taxation can be good but it depends on the loopholes. I used examples from the 2012 budget to help explain why such a policy did not work in the UK. I concluded by saying supply side policies work better and spending on education to improve our future workforce is better in the long run as the benefits would be realised soon after the recession has finished in the uk.

Reply 468

_becca

Original post by Moiraclaire

I wrote utter rubbish, especially for the last question, I was rushing so badly.
BYE BYE A*.
I only needed 55UMS (D grade) to get an A overall, HOPEFULLY I got that.
I got 79 in Econ4 in January, I was going to resit that next Wednesday, but I'm going to cancel that - no point now.
Essay questions were pretty gross IMO. I reckon it'll be 58 for an A - they're topics very few people like.
I didn't even define efficiency, it was appalling.

So I get to do nothing but further maths for 2 weeks, YAY.

it'll be fine! a D for an A overall has given you a lootttt of leeway :biggrin:

don't immediately cancel the next exam! Maybe give yourself sometime to logically go over how well you've done :redface:

it's very easy to convince yourself (especially looking over threads like these) that you've done awfully haha.

I was confused, I thought we had to wait like 24 hours before discussing? in any case I think the grade boundaries will be higher - usually 66 or 67 for an A*, I reckon it'd be 68 or 69 even *cries*

I did the poverty & small/large firms one, deliberately underlined all the times i said "it depends" like GIVE ME EVALUATION MARKS PLEEEEEASE.. not desperate at all

edit: for the causes of poverty question (second part of 10 marker) what did people put? I put unemployment in lots of detail and then the poverty trap/disincentive to come out of poverty/general waffle.. o well

(edited 11 years ago)

Reply 469

tonymanny

Scott, what did u conclude? I didnt know if it meant which policy is better for buisnesses or the goverment?

I basically wrote a page on like externalities, and how they cause market failure etc and thats why the goverment wants to intervene. Then wrote about pollution permits, and like how they effect buisnesses, like they have to invest in technology to reduce emissions which can be expensive and can lead to lower profit margins. but it gives them an incentive cause they can sell permits. But the problems are that big buissnesses can buy permits of smaller ones? Then i wrote about a tax on fuel, and how like cause its a neccesity all it will do is raise revenue, and basically tax those who need it? Then i concluded that for the government and firms pollution permits were better?

Reply 470

arz15

Original post by Jakeeyy

How did you tackle poverty?

Well part b was straight forward, give definitions then compare the two. Then giving two causes was easy too.

Evaluation, I evaluated National Minimum Wage as a Supply Side policy, drawing monopsony and competitive market diagrams to show the effect on employment.
Then I did about the tax/benefit system and lastly, I wrote about Government provision of merit goods, such as education and training.
In the conclusion, I swayed more towards supply side, but said a mixture of progressive taxation and providing merit would be the best option. Taxation would tackle inequality a bit in the short run and then the Government tax revenue from it can finance the merit goods, although the effect on incomes would occur in the long run.

Reply 471

arz15

Original post by rub em out

How did everyone get 18.7% for the poverty context? Im assuming you're talking about the one with the difference in pay between the years, I got like 540% and I checked it loads of times :L

You did the percentage of larger as a percentage of the smaller figure but you were supposed to show the smaller one as a percentage of the larger one.

Reply 472

theajd

As for section B I done the Oligopoly question.
For the 15 marker I spoke about characteristics, kinked demand curve and the discontinuity in the MR curve to show why there is price rigidity and then spoke about game theory.
For the 25 marker I said what collusion was, why it was done and the types of collusion. Then the policies the govt could use were to tax the oligopoly, deregulate the market into a contestable market or fine the firm or convince the CC or OFT to fine them.
However taxing would lead to higher prices. Also collusion has benefits, for example fixed supply, price stability and the chance of dynamic effiency which in the long run could lead to the country having a comparative advantage etc. Remember the question said how govts can control oligopolies not stop them from collusion so I think it was a good idea to show how if a govt wanted dynamic effiency they could infact protect a oligopoly. I always think there is a allocative / dynamic effiency trade off

Reply 473

Jakeeyy

For Poverty.

Got calculation right then wrong. What a nightmare.

10 marker i defined of course, and said wage differentials, related it to MRP and drew a diagram with supply going rightwards. Then said unemployment with the elderly and sick and so forth.

Essay i talked about progressive taxation and how it would be beneficial and how it would redistribute into welfare benefits. Then evaluated with Laffer curve argument about disincentives, people may find tax loopholes, government failure. Spoke about the trickle down effect and if benefits are too generous some may face an unemployment trap.

Spoke about supply side through training, said how it would increase MRP and make them more employable and so forth. Then said why it was bad such as long run effects, aimed at those in education and work and not for the elderly and sick. Opportunity cost, rising deficit and interest repayments as a future burden on generations. How supply side wasn't also demand side, like if cyclical unemployment was there, then it wouldn't help at all.

Concluded with an overall saying on the policies and said something about markets i think.

Meh

Reply 474

imsosuperman

Original post by Jakeeyy

It is, i got it right. Then changed it. Lost 3 marks like an idiot.

how did you get this? :s i did difference/original x100 and got like 400something % :s

Reply 475

tonymanny

Yeah yeah, i wrote the benefits of an oliogopoly. technological innovation and economies of scale, they are a good market if they work efficiently.

Reply 476

Jakeeyy

Original post by theajd

Did anyone mention collaboration? How them colluding to share information could be good?

Reply 477

Jakeeyy

Original post by imsosuperman

how did you get this? :s i did difference/original x100 and got like 400something % :s

Same but still wrote it wrong. Everyone seems to have gotten 18.6 and i did first time round. Seemed wrong to me though.

Reply 478

imsosuperman

Original post by Jakeeyy

Same but still wrote it wrong. Everyone seems to have gotten 18.6 and i did first time round. Seemed wrong to me though.

Yeah :s i didnt really understand what it was asking tbh
Do you recon we will get a mark for doing a percentage change? then 3 marks for the comparison?

Reply 479

Jakeeyy

Original post by imsosuperman

Yeah :s i didnt really understand what it was asking tbh
Do you recon we will get a mark for doing a percentage change? then 3 marks for the comparison?