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F581/ F582 Economics June 2013

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Reply 800

Minchains

POI to correct information failure

Reply 801

mandem2k11

Original post by Mpstang

I'm really clueless into how to answer an 18 mark question on regulation or government intervention and somebody help me on this? I've looked in the OCR textbook and I also can't really find disadvantages to subsidies.
Can someone guide me in the right direction?

Para 1 - define key terms
Para 2 - apply to the question/case study
Para 3 - anaylse the effect of the intervention with diagram
4- Evaluate why it might not be good
5- offer alternative
6-evaluate alternative
7- conclusion + why you came to conclusion

Subsidies bad as :

Measure/ level issues, how big to subsize can lead to govt failure
Oppurtnuty cost as money on subsidy could be used elsewhere
May encourage inefficiency and dependancy on subsidy

Reply 802

Mpstang

I mean for the analysis part and the pros and cons of of the 18 mark question what should I put for regulation?
I feel like there isnt much information on regulations on the ocr textbook

Reply 803

May-o2q

Original post by Mpstang

I mean for the analysis part and the pros and cons of of the 18 mark question what should I put for regulation?
I feel like there isnt much information on regulations on the ocr textbook

I would put pros:
- let the firms internalise all the externalities, esp negative externalities.
- regulation on monopoly: without government intervene, firms may gain monopoly power and charge higher price than what it should be => allocative inefficiency.
-sometimes, government could gain tax revenue.

Cons:
- cost of enforcement is high
- firms may have less freedom to do what they want in the market
- free market mechanism give the best answer of what to produce how and for whom.
-government may having inaccurate figure, which leads to government failure.

This is just what came on my mind. Hope this help!

Good luck !

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Reply 804

May-o2q

Anyone have clue what could come up on 18marks today?

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Reply 805

Hunarench95

Original post by Mpstang

I mean for the analysis part and the pros and cons of of the 18 mark question what should I put for regulation?
I feel like there isnt much information on regulations on the ocr textbook

Regulation:
Pros
- Can ensure complete ban on good - or ensure consumption by everyone (tax and subsidies can't guarantee this)
- Often seen as more positive than a tax or subsidies as taxes don't have to be increased to correct market failure
- It depends what sort of market it is, but the effects of regulation are almost instant (whereas taxation and subsidies take time to filter into economy)

Cons
-Costly
- Takes a lot of time to investigate and find a solution - - > may even then cause government failure
- People may choose to break the law of the fine/enforcement is not enough if a deterrent
- You lose international competitiveness (in some cases)

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Reply 806

siudesmond2k

Should the supply curve of the graph of tradable permits be vertical?

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Reply 807

Mpstang

Can someone tell me what is legislation and how can it help positive externalities?

Reply 808

mandem2k11

Original post by siudesmond2k

Should the supply curve of the graph of tradable permits be vertical?

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yes

Reply 809

ThePrawn

Advantages of specialisation??

Are increased output levels and increased quality of goods valid points?

Reply 810

mandem2k11

Original post by ThePrawn

Advantages of specialisation??

Are increased output levels and increased quality of goods valid points?

-Gain expertise
- Increased porudctive efficiency (and economies of scale)
- Higher output = Economic Growth = higher employment/living standards

HOWEVER

-creates dependacy
- Depletes more finite resources
- Dependacy leads to issues if say harvests are bad or an economy becomes futile if that makes sense

Reply 811

hello my name is

Original post by lisa96

This exam was soo much easier than Januarys. The case study was weird though, it started off about holidays and then went on about tanning.

Also the YED question already had the figures calculated and it was easy to comment on it so that was good

yh it was ,, i am just unsure about q 5b about why uk has a efficient holiday market

Reply 812

lucybrown92

what did you guys put for the YED answers?

And completely messed the 18marker I think - I wrote an essay about indirect taxation and legistation as regulation methods to combat market failure as a result of imperfect information :frown:

Reply 813

hello my name is

Original post by lucybrown92

i did the same thing shiiiittt but i said information failure lead to negative externalties which is bad for society and from there i started talking about regulation and indirect taxation.

(edited 10 years ago)

Reply 814

hello my name is

Original post by lisa96

I pretty much copied the case study, saying how consumers demand were being met by producers and they were also improving the quality of the holiday market etc

i wote a similar thing

Reply 815

lucybrown92

Original post by hello my name is

i did the same thing shiiiittt but i said information failure lead to negative externalties which is bad for society and from there i started talking about regulation and indirect taxation.

SNAP! guess we did the same, well thats what I thought it asked tbh, but related it abit to case study - oh well its done now lol

BTW silly question but were the yed luxury goods ? yed > 1??

Reply 816

hello my name is

Original post by lucybrown92

SNAP! guess we did the same, well thats what I thought it asked tbh, but related it abit to case study - oh well its done now lol

BTW silly question but were the yed luxury goods ? yed > 1??

yed? i think u mean the suna bed and tan accelerators ,, nah i wrote demerit goods ? cuz thet cause illnesses cancer and cuase nhs money

Reply 817

shaggyk

Overall how did you guys find the exam, hard /easy?
what do you recon the grade boundaries will be like?

Everyone in my college found it hard, so i recon the grade boundaries may be slightly lower.

Reply 818

hello my name is

Original post by lisa96

I wrote YED for foreign holiday was a normal and superior good and income elastic and for UK holidays it was an inferior good but also income elastic.

I wrote about regulations and tax as well. I mentioned that "this policy could be helpful in reducing market failure caused by information failure because..." however my reasons were basically just advantages and stuff of the method and not really focused on information failure it self.

they werent asking about holidays they where asking about suna beds and tan acceptors cuz @ the end oft the article it said regulations for suna beds and tan accel to reduce demand and there is an alternative way.

Reply 819

Student8

Original post by shaggyk

Overall how did you guys find the exam, hard /easy?
what do you recon the grade boundaries will be like?

Everyone in my college found it hard, so i recon the grade boundaries may be slightly lower.

lots of people at my school found it hard, i personally found it really hard but thats probably because i ran out of time so my essay was really bad and short.