Jan 2007 Edexcel Econ Unit 1 thread

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Reply 20

studyboy

Both answers are so close!!! :mad:

Reply 21

maxhk

mAnIaC

for the one about organic farming...I put B...and I explained it using preice elasticity of supply...I put the formula and then I said that organic produce has more inelastic supply than your usual agricultural produce since you cannot use fertilisers and stuff...and it cannot be stock-piled and is highly-perishable...

What's B? I dont know how to answer this question as well!!! I put supply exceeds demand for this question though... argh!!! totally screwed this up... how i wish i can get the mark scheme NOW!!!!

Reply 22

maxhk

universitybound

guys, it can't be to keep prices stable as volatile prices is one of the biggest FAILURES of the free market economy and is why the government has to intervene with things like Buffer stocks......its the reason why there is the creation of the divergent cobweb in prices too.......my teacher said "ration" wasn't the best word but it CANT be to keep prices stable!

I put B coz something like this appears in Unit 2... under the NHS..
" Price mechanism ensures that those who are willing and able to pay will get the goods. Those who are not willing and able to pay will not get the goods."

God knows.. To stabilise the price MIGHT BE the answer~~~

Reply 23

Ribulose Bisphosphate

For qeustion one I put to ration scarce resources....and i put the diagram showing excess demand and explained it...and then i said what a free market economy is...

the organic question i put B...which compared organic produce to intensively farmed produce

Reply 24

MaLvI

so what's the answer for organic food question???
Does someone know for sure?

Reply 25

newlife

i think the answer for the organic one was :

supply was rising more than demand.... or something like that?

Reply 26

MaLvI

oh good i chose that toO!

Reply 27

maxhk

newlife

i think the answer for the organic one was :

supply was rising more than demand.... or something like that?

yeah i chose this one too!!! and then i drew a supply and demand diagram, which shows demand shifted to the right resulting in a drastic price fall....

Reply 28

Ribulose Bisphosphate

not being rude or anything...but when you shift demand to the right...it raises the price! so you're wrong!

Reply 29

studyboy

Why can't the answer be D? It was stated in the question that the organic farm yields were sold at or lower the cost of production. Doesn't this imply that if prices are to be raised...demand will become 0? If not, why do the farmers have to sell it at such a low price?? Even if supply is increasing faster than demand, we cannot be so sure that the price of the organic yields will be either at or lower than the cost of production for it. Anyway, that question is very confusing.

Reply 30

maxhk

mAnIaC

not being rude or anything...but when you shift demand to the right...it raises the price! so you're wrong!

Oh no, the demand was supposed to be SUPPLY.. as in the answer option.. so sorry... :p:

Reply 31

Ribulose Bisphosphate

Exactly - I agree with baby 1002...you're so wrong because the question revolves around supply (more specifically PES) and not demand. Therefore...I chose option B..in ym explanation i quoted the PES formula and then...I said that organic produce is relatively more inelastic in supply than produce grown using intensively farmed methods since fertilisers and stuff cannot be used...lengthening the growing season so that the supply of organic produce cannot be readily increased..organic produce is therefore more highly perishable than other produce and cannot be stock-piled. :rolleyes: