OCR F581 Markets in Action - 11 May 2015

That's an A2 question

Ahhh cool, I think for the 6 markers, it will likely be public goods if not information failure considering last year it was negative externalities of the Chinas production...PED appeared last year and YED is very popular so I think maybe PES or XED

Haha good she was going through the structure and it seemed a bit crap.

The structure was something along the lines of:

L1- Definitions of competitive marker and allocative efficiency

L2 - Examples of competitive market

L3 - Mentioned some stuff XED and that if the price of carrots from a certain shop went up you would instantly switch. PED = Elastic.
Something about merit goods -> Under-produced and under-consumed. Positive externality diagram. Saying you want to get MSB=MSC to get allocative efficiency.

Then I can't remember what on earth she said for L4. Is that stuff definitely A2?

Is this planning provided by your teacher?

I can never do 6 markers on negative externalities. Care to talk me through one ?
Like normally I get 3/6.

Yeah it seems a bit crap.

Umm this is how I do it...dont think itd be 6 marks, depends how you write it up

Define negative externality
Identify the cost
Say how and who is impacted
Explain/Elaborate how does this impact affect the whole society

I don't understand the planning. Market structures is not part of the syllabus so it cannot be part of the F581 paper. You can either get a question on allocative efficiency or productive efficiency but not in the context that you mentioned but as a short answer question.

On a tradeable permits diagram when p1 moves to p2 what does this mean? is it an increase in firms cost of production??

Is that the polluter's pay principle thing??

I sort of see.

Question 5b. June 2009.

'Explain why negative externalities arising from an increase in air transport are an example of market failure'.

A negative externality is where the social costs of an action exceed the private costs. They are over produced and over consumed hence it is a demerit good. The social cost would be the CO2 emissions. This would contribute to global warming and those not directly involved will be affected. Another negative externality would be excessive noise disturbance, this would affect those living around the airport to be affected and may force them to soundproof their homes at their own expense through no fault of their own. As the social costs of both noise disturbance out weigh the private cost of dunno what we have a negative externality.

That is what I would write without the mark scheme. Care to edit that and help me improve it? Thanks

I sort of see.

Question 5b. June 2009.

'Explain why negative externalities arising from an increase in air transport are an example of market failure'.

A negative externality is where the social costs of an action exceed the private costs. They are over produced and over consumed. The social cost would be the CO2 emissions. This would contribute to global warming and those not directly involved will be affected. Another negative externality would be excessive noise disturbance, this would affect those not directly living around the airport to be affected. As the social costs of both noise disturbance out weigh the private cost of dunno what we have a negative externality.

That is what I would write without the mark scheme. Care to edit that and help me improve it? Thanks

I sort of see.

Question 5b. June 2009.

'Explain why negative externalities arising from an increase in air transport are an example of market failure'.

A negative externality is where the social costs of an action exceed the private costs. They are over produced and over consumed. The social cost would be the CO2 emissions. This would contribute to global warming and those not directly involved will be affected. Another negative externality would be excessive noise disturbance, this would affect those not directly living around the airport to be affected. As the social costs of both noise disturbance out weigh the private cost of dunno what we have a negative externality.

That is what I would write without the mark scheme. Care to edit that and help me improve it? Thanks

quick question:
do regulations affect supply only?
Also what are examples of types of regulations
Thanks

Regulations affect both supply and demand for example regulating the legality of drugs, age limits on alcohol and tobacco