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[AQA] - Economics Unit 1 January 15th - [2013]

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when looking at a demand and supply diagram for the agricultral market you will see three inelastic supply curves s1,s,s2....supply S and demand D being where the initial equilibrium is. when the agriultral market have a good year they are supplying theyre goods at S2, this causes price to decrease and in effect changes the farmers income, the government buy up the excess stock of S-S1 resulting into a supply of S in the market. the following year there needs to be a bad year for the buffer stock scheme to be succesful so supply would have to be a s2, this will result into the government selling back the goods it had bought to maintain market prices and in effect maintain the farmers income.
the Buffer stock does have many problems such as there needs to be the alternation of a good year then a bad year then a good year ect. otherwise more problems will occur for example storage will become a problem as the government will have to buy more of the excess googs, also goods could be perishable. also who pays for the buffer stock scheme to occer, its tax payers and theres an opportunity cost involved such as the NHS
advantages being that it maintains the farmers income and agricultral goods still get supplied in the market without an unhappy farmer
im an AS student about to sit the exam for this unit, could some one feed back on my respone
would be much appreciated.

Original post by ineedtorevise127

What are the advantages and disadvantages of a buffer stock scheme?

(edited 11 years ago)

Reply 61

TheJoka

Hey does anyon have any idea of what might come up?

Personally i think Buffer stock might come up because it hasnt come up in a long time.

Not soooooo sure about externalities......

Any ideas????????????
Rough estimates???????????
:s-smilie:

Reply 62

Son234

How's everyone doing with revision?

I'm slightly struggling with time in the exam papers

Only seems to be my problem :|

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Reply 63

onjay2k7

Well, I'm alright with the content and everything , I know everything really. I'm really scared about the 25 marker because I do get 22/25 but I go over time. So I figured I'm going to do section B first then the multiple choice so I can secure good marks there first preferably 45/50. Guys for the comparison of data question, what do you lot normally compare?

Reply 64

legendaryy

Hi everyone I was wondering if this would be worthy of 5 marks..
The question was define Market Failure
I wrote: 'Market Failure occurs when the free-market left alone fails to deliver an efficient allocation of resources, the result is a loss in economic and social welfare'

Would that be worth 5 marks?! Please help

Reply 65

Maybach

Original post by 786:)

Hi, please could you help me understand why A is the answer to question 22 on:
http://store.aqa.org.uk/qual/gce/pdf/AQA-ECON1-W-QP-JUN09.PDF
Thank you :smile:

It is a mis allocation of resources. (A)
This is because the good is a merit good, since social benefit exceeds private benefit...
The general assumption is that when a merit good is provided by anyone other than the state (aka government) it is under provided because we don't account for society when we make choices, such as getting a flu vaccination (we are selfish)
But society benefits more from this action therefore it is under provided because not enough people are getting the good as they are only thinking of themselves..therefore it is a misallocation because the resources have been used elsewhere, not enough have been allocated to this good that should have been provided - ( basically they should produce at MSB but instead they produce at MPB because it is a market allocation and resources go to whoever pays for it, so it is under provided since not everyone believes it is worthwhile)

Merit goods- under consumed- misallocation because they need to be consumed more for everyone to benefit

The way I put things is terrible and if you don't quite get it I will try to explain it better

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(edited 11 years ago)

Reply 66

Son234

Original post by onjay2k7

Wow that is actually a great idea doing the section B first I will try that with one of the past paper today :biggrin:

For the 25 multiple Choice I have been scoring 20+ but the 2-3 I get wrong are the ones that cost me time as I want to score them right and get 25/25 so annoying!

But the 25 marker question I too have been running out of time need to work faster

What's your guys structure for the 25 marker??

And the comparison question

I usually go for when it's the highest or lowest

Or the gradient just depends on the data

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Reply 67

legendaryy

hi guys i've asked this question elsewhere but haven't got a clear reply..

The Q was 'Define Market Failure' (5 marks)
I wrote: 'Market failure occurs when the free-market left alone fails to deliver an efficient allocation of resources, the result is a loss in economic and social welfare.'
Would that be worthy of 5 marks?!

Reply 68

ugansa

Can someone put all the definitions of the key words that could come up in the 5 marker. Can someone also share the main points to answer a 25 marker on market failure

Reply 69

bestfriends33

Hi,

Could someone tell me how they use the extracts in their 25 mark essay questions? The mark schemes says you must use the extracts to get the higher marks.

Do you simple say.. As extract c states "....", a subsidy could be used...

Thank you :smile:

Original post by legendaryy

Yes economics are flops when it comes to marks. Think of it actually as two and a bit marks of content, a sentence or two will do (check the mark scheme)

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Reply 72

Maybach

Original post by bestfriends33

Yes, use it to support your argument..
But you can also use other kinds of evidence from your own findings. I often find the extracts rather boring in terms of conclusions and tend to search the news once I finish a topic just to have an example - for example price stabilisation take a look at the job OPEC have done for oil (terrible) so obviously buffer stocks are very hard to co-ordinate

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Reply 73

Alex-Torres

Original post by bestfriends33

Yeh, so you use an extract to back up one of your for or againsts. For example, government intervention is bad, and source b exemplifies this as "it could increase unemployment".

Reply 74

786:)

Original post by Maybach

How do guys utilise the data in the tables/graphs within your answer? :smile:

Reply 75

Vividness

In August 2001 the Monetary Policy Committee (MPC) of the Bank of England continued the
trend of falling interest rates by cutting the base rate from 5.25% to 5%. One justification for
this might have been the MPC’s concern over
A increasing evidence of a recession in UK manufacturing.
B an increase in the rate of growth of labour productivity.
C an increase in the rate of inflation.
D increasing activity in the housing market.

Can anyone explain to me why the answer to this question is A?
Thanks!

Reply 76

harrybobo12

Original post by Vividness

If there is evidence of a recession there could be deficient aggregate demand so by cutting interest rates, one of the determinants of AD it is hoped AD can increase and so real output of manufacturing will increase.

Reply 77

metmer01

Original post by Vividness

The MPC use the base rate as a stimulus to try and kick start growth within a economy, therefore if there is evidence of a recession within the UK manufacturing industry then lowering the base rate will have a knock on effect so that people will be willing to spend more, as it will not be as worth their while saving the money and it will also be cheaper to borrow the money, this means that with more money in the economy it could, potentially, stop the looming recession in its tracks.

Hope that helps :smile:

Reply 78

harrybobo12

Original post by metmer01