[MCYan]

This year's Economics for AS OCR differs to the previous years. They combined two microeconomics units(the mark system and market failure and government intervention) together.

Any of you who have done the new specimen paper,you may realise the last question is now worth 18 marks,but how do you gain FULL 18 marks?For example:Evaluate the impacts of how subsidies correct negative externality in order to correct mark failure You need to draw a diagram,and explain it? and then evaluation(pros n cons),do you have to come up with own evaluation,which means which side you agree with?How are you going to make sure you gain full 18 marks?

Any ideas?

Thanks guys!

[richardjyoung]

We had a student who got 98/100 in the Jan exam and several with 90% plus. Hard to generalise as to how to get 100% but the key is to justify arguments using economic theory and evidence in the stimulus text.

[MCYan]

(Original post by richardjyoung)
We had a student who got 98/100 in the Jan exam and several with 90% plus. Hard to generalise as to how to get 100% but the key is to justify arguments using economic theory and evidence in the stimulus text.

did he/she not get full marks for the last part?yes,link back to the text would be always the key.. do you know the break up in order to gain high marks for this one?

thank you

[Shorty1992]

I got full marks in the January Markets in Action paper, but not entirely sure what you're asking, so this may or may not be of any use to you!

Okay, in the 18-mark questions, here's what I generally do (with examples using a question like 'Discuss whether using subsidies is an effective solution to the market failure arising from positive externalities', which is the specification paper's last question, but with subsidies instead of taxation and then obviously positive externalities rather than negative):-

1. Definitions of relevant words: here it would be the definition of a subsidy, market failure and positive externalities.

2. General analysis: what is the aim of a subsidy? - i.e. something like 'encourages the production of a good which a market underproduces through lowering a firm's costs of production, hence correcting the market failure caused by the underproduction of a good producing positive externalities.' In order to get 11+ marks, you NEED to draw a diagram showing the supply curve shifting to the right with the associated impacts on price and quantity (i.e. price falls, quantity rises).

3. Pros/cons: I'd now do about 3 (maybe 4) paragraphs, with the first 3 beginning with positives about how subsidies correct market failure, e.g. 1st paragraph: just re-itterate that they encourage the production of a good which a market underproduces. 2nd paragraph: they provide financial incentives to producers to produce. 3rd paragraph: alternative products producing less negative externalities can be subsidised.

In each of those 3 paragraphs, I'd then say 'However...' in order to include evaluative points. Evaluative points include:
- Financial cost & opportunity cost of subsidy to the government.
- Difficult to set it at the right level.
- If demand is price inelastic, the subsidy has little effect on the consumption.
- Time lag between introduction and consumers switching consumption habits.
- The subsidy may not be passed onto consumers in the form of lower prices; the firm may keep it in order to increase profits.

As you can see, there's quite a few evaluative points, and more I'd say than for those 3 paragraphs, so I'd normally do a 4th paragraph saying 'Furthermore...'

4. Conclusion: my general conclusion for practically anything that requires an opinion ('Discuss'/ 'Comment on') is 'In conclusion, I believe that _____, however various factors mentioned above would have to be considered, especially _____'.

So for the subsidy question, I'd say 'In conclusion, I believe that subsidies are potentially an effective solution to market failure, however, various factors mentioned above would have to be considered, especially the size of the subsidy which, set at the wrong level, could lead to the subsidy being very ineffective'.

----

I hope this helps you out a bit! Obviously there's various ways you can approach these 18-mark questions; this is just the way I do it. Some people do all the points about it being effective first, then reasons for it being ineffective, for example.

Any questions, or anything you don't understand that I've written then do just give me a shout as it's very difficult to convey what I'm trying to say at times Plus, it's been a while since I've done Markets in Action stuff! If you haven't already, looking at the specification paper's mark scheme would be useful - it's on the OCR website x

[MCYan]

(Original post by Shorty1992)
I got full marks in the January Markets in Action paper, but not entirely sure what you're asking, so this may or may not be of any use to you!

Okay, in the 18-mark questions, here's what I generally do (with examples using a question like 'Discuss whether using subsidies is an effective solution to the market failure arising from positive externalities', which is the specification paper's last question, but with subsidies instead of taxation and then obviously positive externalities rather than negative):-

1. Definitions of relevant words: here it would be the definition of a subsidy, market failure and positive externalities.

2. General analysis: what is the aim of a subsidy? - i.e. something like 'encourages the production of a good which a market underproduces through lowering a firm's costs of production, hence correcting the market failure caused by the underproduction of a good producing positive externalities.' In order to get 11+ marks, you NEED to draw a diagram showing the supply curve shifting to the right with the associated impacts on price and quantity (i.e. price falls, quantity rises).

3. Pros/cons: I'd now do about 3 (maybe 4) paragraphs, with the first 3 beginning with positives about how subsidies correct market failure, e.g. 1st paragraph: just re-itterate that they encourage the production of a good which a market underproduces. 2nd paragraph: they provide financial incentives to producers to produce. 3rd paragraph: alternative products producing less negative externalities can be subsidised.

In each of those 3 paragraphs, I'd then say 'However...' in order to include evaluative points. Evaluative points include:
- Financial cost & opportunity cost of subsidy to the government.
- Difficult to set it at the right level.
- If demand is price inelastic, the subsidy has little effect on the consumption.
- Time lag between introduction and consumers switching consumption habits.
- The subsidy may not be passed onto consumers in the form of lower prices; the firm may keep it in order to increase profits.

As you can see, there's quite a few evaluative points, and more I'd say than for those 3 paragraphs, so I'd normally do a 4th paragraph saying 'Furthermore...'

4. Conclusion: my general conclusion for practically anything that requires an opinion ('Discuss'/ 'Comment on') is 'In conclusion, I believe that _____, however various factors mentioned above would have to be considered, especially _____'.

So for the subsidy question, I'd say 'In conclusion, I believe that subsidies are potentially an effective solution to market failure, however, various factors mentioned above would have to be considered, especially the size of the subsidy which, set at the wrong level, could lead to the subsidy being very ineffective'.

----

I hope this helps you out a bit! Obviously there's various ways you can approach these 18-mark questions; this is just the way I do it. Some people do all the points about it being effective first, then reasons for it being ineffective, for example.

Any questions, or anything you don't understand that I've written then do just give me a shout as it's very difficult to convey what I'm trying to say at times Plus, it's been a while since I've done Markets in Action stuff! If you haven't already, looking at the specification paper's mark scheme would be useful - it's on the OCR website x

this certainly is what I was looking for! you definitely did help! thanks ever so much.
I do know about the mark scheme but it never is as detailed

[MCYan]

would it be the same for the Macroeconomics' paper's last question?

[Shorty1992]

You're welcome Hopefully what I wrote can be used again when other people ask about the 18-mark question... so if you spot anything that doesn't make sense/you don't think is right, then please do say.

And yes, the National and International Economy paper will have have much the same structure - have the joys of that on June 3rd wahey

[MCYan]

(Original post by Shorty1992)
You're welcome Hopefully what I wrote can be used again when other people ask about the 18-mark question... so if you spot anything that doesn't make sense/you don't think is right, then please do say.

And yes, the National and International Economy paper will have have much the same structure - have the joys of that on June 3rd wahey

thanks, you certainly did help!

[Annemn]

Thank you very much! This was really useful for last minute revision ~