OCR F581 Markets in Action - 11 May 2015

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'explain how specialisation can be used to address the problem of scarcity' how would you answer this ?

Specialising of factor of production e.g. labour workers devote to their job and eventually they become more productive ie more output per worker at the same cost. This allows to produce a great variety of goods and services. By specialising, the country can also trade with other country goods that cannot be produced in the home country. E.G. Banana cannot be produced in the UK thus it considered as scarce but you can trade for it!~

Reply 101

Makashima

Original post by Super199

Bit of macro, can someone explain geographical immobility?

What do you mean, just define it?

Basically saying, it not very convenient or easy for people to move around the country(geographically)... E.g. it is not convenient for me to move to London, I have no car or transport money etc

mobile - able to move or be moved freely or easily.
immobile - to not be able to move freely

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COUNT DOWN: 5 WEEKS LEFT TO GO

(edited 9 years ago)

Reply 102

Gladiatorsword

GUYS
for micro, realistically, how long should an 18 marker be...is 5 sides of a4 too long?

Posted from TSR Mobile

Reply 103

Makashima

Original post by Gladiatorsword

GUYS
for micro, realistically, how long should an 18 marker be...is 5 sides of a4 too long?

Posted from TSR Mobile

Realistically? It really depends how you write; some write very detailed and some just straight to point. I tend to write 2 pages, 3 sided
If you happen to write 5 sides, not problem as long you complete everything in time !

Reply 104

Super199

Original post by Makashima

What do we have to know about the different types of economies. So command, mixed and if there any others?

Reply 105

Super199

Are the factors of demand:

Disposable income
Price of substitutes
Price of complements
Consumer tastes and preferences.

My teacher also said something about the availability of credit and advertisement. Though with advertisement you have to link it with consumers tastes and preferences.

Reply 106

Coombsy

Original post by Super199

I would say go with the four that you have listed as they are what are always accepted in the mark scheme. Just make sure to add explanation from the reason to why they affect demand to access the analysis marks.

Reply 107

Wall Street

Original post by Nchomuzinda

'explain how specialisation can be used to address the problem of scarcity' how would you answer this ?

Specialisation -> higher productivity -> higher output per worker per hour -> generally means higher total output quantity -> more goods and services produced using the same factors of production -> scarcity is counteracted by higher productivity.

Original post by Super199

Bit of macro, can someone explain geographical immobility?

Take a look at this.

Original post by Super199

What do we have to know about the different types of economies. So command, mixed and if there any others?

The market economy (determined by market forces, i.e. "free market/liberal") is also a type of economic system, in addition to the ones you've already listed.

Original post by Super199

I would personally say that availability of credit is too Macro, as it affects all products/markets, as opposed to a particular product/market. Advertisement would basically be the same as consumer tastes/"trends", so I would use the latter as the factor demand depends on and say it can be affected by advertisement (if the question requires analysis).

Reply 108

Yousf

HELP please. When i get a question asking to draw a supply and demand diagram, i'm able to draw the graph however when it comes to the comment section i sometimes get confused. For instance on question 4 in this paper:

http://www.ocr.org.uk/Images/61587-mark-scheme-january.pdf

For the comment part it says, 'Award up to 2 marks for a comment on the size of the respective shifts in D and S,ideally including elasticity of supply or demand, and their variable effect on theequilibrium price and quantity'

So what could i talk about when it asks this to get the 2 marks for this part.

Thanks!

Reply 109

Super199

Original post by Yousf

This is a fairly standard question. The way I have been taught is
Obviously four marks for the graph (correct shifts)

2 for analysis. So essentially say what you see if demand has shifted right for example and supply was the same. There is a shortage in the economy putting pressure on the existing factors of production. As a result we see an increase in the price level from p-p1. The quantity has increase from q -q1 due to the shift in demand from d-d1.
With this question both graphs shift. Now in this case you do not have a shortage or surplus so the price doesn't change. If demand changed more the price would go up and vice versa. So you can say the price good change depending on how much supply and demand shifts.

If you remember about price elasticity of demand an elastic good means the change in quantity demanded reacts much more in comparison to the price. Obviously you would say percentage change. So if the good was elastic the change in the quantity demanded would be more for a small change in price. I am not 100% confident in the elasticity bit - if someone can explain that to me aswell it would be appreciated.

I hope that is somewhat useful. Btw how many past papers have you done?

Reply 110

Yousf

Original post by Super199

Thanks!, and i have done about 4 past papers for micro and macro each.

Reply 111

AssassinXJ

Anyone have good notes on how to approach 18 markers for the various corrections to market failure? I remember seeing some in last year's thread a few months back but I can't seem to find it any more.

Thanks! :smile:

Reply 112

Super199

Right can someone explain a definition to me.

So in the book it says government spending is spending by the central bank and local governments on whatever it was can't remember off the top of my head.

but anyway we had to do an essay in school and I didn't get all the L1 marks. Apparently according to my teacher the central bank can't spend and it is meant to central government or something along those lines. If someone explain whether he is correct or not it would be appreciated. Thank you :smile:

Reply 113

Super199

Can someone list the causes of a current account deficit and surplus?

Reply 114

Wall Street

Original post by Super199

Yeah, he's correct: it's the "spending by the central and local government".

Original post by Super199

Can someone list the causes of a current account deficit and surplus?

It is mostly to do with the PED/relative prices of goods and services in the country.

For example, if something - such as an appreciation or inflation - causes the prices in the domestic country to increase, it will likely mean that there will be more imports and less exports in that country, causing a current account deficit. If the opposite happens - if prices decrease in the country - then there will be a current account surplus as a result of exports being larger than imports.

However, this depends on the price elasticity of demand of the goods and services being imported and exported. If the country is famed for making a certain type of product, and the product is very good quality, then it is likely that even if inflation causes prices to rise, the total value of exports will increase, not decrease due to the inelastic nature of the product.

A good example of this is French wine: even if French wine was to increase massively in price, it is likely that many people would still buy it.

Reply 115

Makashima

5 weeks left :wink:

(CRIES OF BLOOD)

Reply 116

Pato1

I'm worried about f581... A lot of people end up doing a lot better on F582 compared to F581 statisically. Maybe it's because the questions are harder or maybe students underestimate the difficulty of it and not revise it much...?

Reply 117

Makashima

Original post by Pato1

Was it based on last year statistics?
Nooo, actually in my opinion, my class and my teacher says the unit 1 is actually easier!~ I think they say it is difficult maybe because they underestimate unit 1. But in comparison, unit 1 is easier than unit 2.

Reply 118

Super199

Original post by Makashima

Hey, really sorry but do you mind listing the determinants of supply for me again :smile:

.

Also what do we have to know about consumer and producer surplus. Do we have to know what happens to them if the demand/supply curve shifts? Another thing when you draw the consumer or producer surplus do you shade it in or do you label the area.

Last thing if you don't mind is what are the determinants of PED. I think there is like availability of substitutes, luxury or loyalty although I am not entirely sure if that is one, time, addition to definition as well apparently and the proportion of disposable income. Are these the correct ones?