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OCR F581 Markets in Action - 11 May 2015

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Original post by BigFreakyGinger
If a subsidy is payed to consumers (e.g a university grant or winter fuel allowance) does it increase demand or supply?


Do not worry, you only ever have to show a change in supply
Original post by BigFreakyGinger
If a subsidy is payed to consumers (e.g a university grant or winter fuel allowance) does it increase demand or supply?

Shifts out the demand curve :smile:
Original post by midgemeister7
Do not worry, you only ever have to show a change in supply


great thankyou :smile: If I were to use it as an alternative solution in an essay it would increase demand though wouldn't it?
Original post by midgemeister7
Do not worry, you only ever have to show a change in supply


In that case, it's the change in demand that needs to be shown. The supply curve is irrelevant here.

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Original post by Becky_boo84
Shifts out the demand curve :smile:


I thought as much, thanks :smile:
Original post by *Stefan*
In that case, it's the change in demand that needs to be shown. The supply curve is irrelevant here.

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As part of the main essay you would not be asked at all to have to draw a graph depicting a subsidy given to consumers
Original post by midgemeister7
As part of the main essay you would not be asked at all to have to draw a graph depicting a subsidy given to consumers


If the question asked what he asked (ie the effect on the market of a subsidy to consumers), then he would be expected to show the shift in demand.

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Original post by *Stefan*
If the question asked what he asked (ie the effect on the market of a subsidy to consumers), then he would be expected to show the shift in demand.

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Yes, but it won't
Original post by midgemeister7
Yes, but it won't


You don't know that.

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Lets not argue, I have another question: what is the difference between the pros and cons of specialisation and the pros/cons of the division of labour?
what can the exam ask about state provision?
Original post by *Stefan*
You don't know that.

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I do

Original post by BigFreakyGinger
Lets not argue, I have another question: what is the difference between the pros and cons of specialisation and the pros/cons of the division of labour?


Very similar, except with division of labour talk more about boredom for workers etc whereas specialisation pros can include stuff like trade between developed and developing economies
Original post by BigFreakyGinger
Lets not argue, I have another question: what is the difference between the pros and cons of specialisation and the pros/cons of the division of labour?


Specialisation can refer to everything, from an individual to a whole country. Division of labour only refers to workers.

The differences in the advantages/disadvantages should draw on this distinction.

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aoxa
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Original post by BigFreakyGinger
Lets not argue, I have another question: what is the difference between the pros and cons of specialisation and the pros/cons of the division of labour?


The division of labour is specialisation, so there's no difference in the pros/cons.
Original post by aoxa
The division of labour is specialisation, so there's no difference in the pros/cons.


yes there are differences, it's a slightly different concept
Original post by midgemeister7
I do


Let's not make empty claims please. The specification mentions how subsidies can be used to reduce market failure. Giving subsidies to consumers in order to consume more of a merit good is a perfectly acceptable question.


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aoxa
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Original post by midgemeister7
yes there are differences, it's a slightly different concept


But they're essentially the same thing. About 99% of the pros/cons would overlap - the only one that I can think of that doesn't is specialisation on a national level.
If I say 'it moves the market closer to allocative efficiency' - do I say it moves the market closer to where consumer satisfaction is maximised?

I know that to access L4, you need L3 Band 2, what are some examples of Level 3 Band 2?
Original post by Hody421
If I say 'it moves the market closer to allocative efficiency' - do I say it moves the market closer to where consumer satisfaction is maximised?

I know that to access L4, you need L3 Band 2, what are some examples of Level 3 Band 2?


That's the definition of allocative efficiency, so yes.

This one is L3 Band 2 analysis. Things like "reduces overconsumption/overproduction", "increases social welfare" and the like are band 2.

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could someone do a general essay structure for if its on state provision? Not sure how to hit all the levels

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