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OCR F581 Markets in Action - 11 May 2015

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Original post by Slenderman
Can someone help with the following questions, they're based of past papers. From 2009-2010.

5. Explain why the price of petrol and diesel may not reflect the true costs of their use.

5. (b) Explain why negative externalities arising from an increase in air transport are an example of market failure.

5. Comment on why there is likely to be information failure amongst consumers of processed red meat products.

As you can see I am not a fan of these questions, i find the them harder than the 18 marker lol.

Anyways can someone help me, thanks.


I suggest you look at mark schemes

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Could someone explain how each of the factors such as necessity, time, substitutes and % of income make a good more or less elastic? if you could explain each point )
Original post by Gladiatorsword
I suggest you look at mark schemes

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I did but they're really vague at times.
Original post by justfly
Could someone explain how each of the factors such as necessity, time, substitutes and % of income make a good more or less elastic? if you could explain each point )


if the good is necessary for your life ( toilet paper ), you will buy it even if the price increase, so PED is inelastic.

if there are a lot of substitides, the PED will be elastic because if you increase the price of your product, people will switch to use another brand. If you are the only producer in the market, no subsititude, then even if you increase the price, consumer will still buy your product because they have no choice
Original post by Slenderman

As you can see I am not a fan of these questions, i find the them harder than the 18 marker lol.

Anyways can someone help me, thanks.


Me too!! I always drop marks on these whether its 1/4 or 2/4
Original post by anndz3007
if the good is necessary for your life ( toilet paper ), you will buy it even if the price increase, so PED is inelastic.

if there are a lot of substitides, the PED will be elastic because if you increase the price of your product, people will switch to use another brand. If you are the only producer in the market, no subsititude, then even if you increase the price, consumer will still buy your product because they have no choice


how about time and % of income?
What is actually meant by 'increasing welfare' I always put it in my 18 markers and see it in others - but I actually don't know what it fully means...
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Avatar for Pato1
Pato1
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YED and PED came up last year, can't see them coming up again. XED hasn't come up since January 2011
Original post by Super199
I agree


Original post by Pato1
Privitisation is one of the hardest questions to get


Lets plan one together? On education
Type it in this google doc :smile:

Only if you want to

https://docs.google.com/document/d/1f43oc8kXyjDsdF5qK2z5NZ7q6KGpIbV3M-Rrt4wpjS8/pub
Original post by Pato1
YED and PED came up last year, can't see them coming up again. XED hasn't come up since January 2011


What are the comment on with XED?
Original post by Pato1
Privitisation is one of the hardest questions to get

it would be pretty hard since it is not part of the syllabus :smile:
Original post by Makashima
Lets plan one together? On education
Type it in this google doc :smile:

Only if you want to

https://docs.google.com/document/d/1f43oc8kXyjDsdF5qK2z5NZ7q6KGpIbV3M-Rrt4wpjS8/pub


How do I get on it? When I press the link it doesn't let me type?
Original post by justfly
how about time and % of income?


Time: as time goes on, it will be easier to find substitutes or alternatives. So it gets more elastic.

Income: If goods are a small % of income, they tend to be quite inelastic e.g. milk : 1 pound. Items that cost a lot of your income are more elastic as you'll likely look around for the best offers. e.g. a house : £80,000-5,000,000 (random big numbers lol)
Original post by Super199
What are the comment on with XED?

inelastic-there is a weak link between the products
elastic-there is a strong link between the products
(-) sign, complimentary good
(+) sign, substitute
Original post by Super199
What are the comment on with XED?


Just go with this, if you ever see anything on elasticies the comments are always:

estimates
question the reliability
it assumes ceteris paribus
and some others depending on question.

ALWAYS WRITE THEM. Free marks lol.
Original post by Super199
How do I get on it? When I press the link it doesn't let me type?


https://docs.google.com/document/d/1f43oc8kXyjDsdF5qK2z5NZ7q6KGpIbV3M-Rrt4wpjS8/edit?usp=sharing

Okay i made it public but idk how to let the public edit, hmm give me few mins while i fogure out
Original post by anndz3007
inelastic-there is a weak link between the products
elastic-there is a strong link between the products
(-) sign, complimentary good
(+) sign, substitute


That's sort of the analysis part. You get some marks for saying it is an estimate and that... I am not full sure on what those are
Original post by Makashima
Lets plan one together? On education
Type it in this google doc :smile:

Only if you want to

https://docs.google.com/document/d/1f43oc8kXyjDsdF5qK2z5NZ7q6KGpIbV3M-Rrt4wpjS8/pub


Hey I can't edit it, are you sure its open to the public and editable for everyone else?
https://docs.google.com/document/d/1f43oc8kXyjDsdF5qK2z5NZ7q6KGpIbV3M-Rrt4wpjS8/edit?usp=sharing

I just made a LAST MINUTE revision document, lets edit together xD
Could someone please read my essay on page 42 & provide feedback :frown:


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