On the consumer surplus one I didn't draw in the two supply curves I just showed the change of price it would cause and the demand curves. Will I be penalised?
Why would you draw a supply curve for consumer surplus?
I did not like the way they labelled their price and quantity axes, they put them right where I was trying to write my P and Q points. Also, does anyone know if there's some sort of rule for 100 UMS? Obviously it will change depending on grade boundaries, but is there any reasonably decent way of working it out?
Why would you draw a supply curve for consumer surplus?
Because the question asked for the effect of a fall in quantity supplied, therefore a shift to the left in the supply curve and a rise in price as a result, which reduces consumer surplus.
If you explained these two then yes, I don't see why that would be wrong. The question was referring to determinants of PED, contrary to what many people on here are saying.
Could we also mention number of subisitues, as more subistues more elastic a product is?
I took the January 2013 exam and the 18 mark question was on subsidies (however it did have a context). I got 18/18 so it may be useful to see if what you said was similar to what I did. See here: http://www.thestudentroom.co.uk/album.php?albumid=10936
I did not like the way they labelled their price and quantity axes, they put them right where I was trying to write my P and Q points. Also, does anyone know if there's some sort of rule for 100 UMS? Obviously it will change depending on grade boundaries, but is there any reasonably decent way of working it out?
figure out the difference between each grade bracket. so say from a B to an A is 5 marks apart then you add this number twice to the A grade. Adding it once gives 90% UMS then again for 100% UMS.
For example: 70% UMS (B) - 41 Marks 80% UMS (A) - 46 Marks 90% UMS - 51 Marks 100 UMS - 56 marks
Because the question asked for the effect of a fall in quantity supplied, therefore a shift to the left in the supply curve and a rise in price as a result, which reduces consumer surplus.
But why would you have a supply curve in consumer surplus? The only way I've ever drawn a diagram of consumer surplus is with a demand curve touching both price and quantity axises.
figure out the difference between each grade bracket. so say from a B to an A is 5 marks apart then you add this number twice to the A grade. Adding it once gives 90% UMS then again for 100% UMS.
For example: 70% UMS (B) - 41 Marks 80% UMS (A) - 46 Marks 90% UMS - 51 Marks 100 UMS - 56 marks
Could we also mention number of subisitues, as more subistues more elastic a product is?
Yes. I wrote about availability of substitutes (eg. wine is easily substitutable with other alcoholic beverages whilst rice is less easy to substitute) and necessity vs luxury (eg. rice tends to be a necessity so is likely to be price inelastic)
What did people write for what makes the ped more elastic, i said number of subistues for one, and then i said some products are neccessities and people need them eg rice so are more inelastic than others
I mentioned necessities and desires, I also talked about proportion of income for example steak and salt etc
But why would you have a supply curve in consumer surplus? The only way I've ever drawn a diagram of consumer surplus is with a demand curve touching both price and quantity axises.
With consumer surplus diagrams, you need both curves to show the equilibrium price. The consumer surplus is then the area between the equilibrium price and the top of the demand curve (the top triangle if that makes sense). Without the supply curve, you wouldn't have the price.
figure out the difference between each grade bracket. so say from a B to an A is 5 marks apart then you add this number twice to the A grade. Adding it once gives 90% UMS then again for 100% UMS.
For example: 70% UMS (B) - 41 Marks 80% UMS (A) - 46 Marks 90% UMS - 51 Marks 100 UMS - 56 marks
But why would you have a supply curve in consumer surplus? The only way I've ever drawn a diagram of consumer surplus is with a demand curve touching both price and quantity axises.
I mean as long as you showed the consumer surplus on the demand curve making the old CS and new CS (two triangles) I guess that's fine but it did say in question that SUPPLY DECREASES so you know that's why a lot of people showed a shift in supply curve to the left....
With consumer surplus diagrams, you need both curves to show the equilibrium price. The consumer surplus is then the area between the equilibrium price and the top of the demand curve (the top triangle if that makes sense). Without the supply curve, you wouldn't have the price.
That's different to how I've been taught it, and different to how I've seen past consumer surplus questions on mark schemes, but I guess we've just got to hope for the best!
I took the January 2013 exam and the 18 mark question was on subsidies (however it did have a context). I got 18/18 so it may be useful to see if what you said was similar to what I did. See here: http://www.thestudentroom.co.uk/album.php?albumid=10936
my answer was almost identical to yours however on my diagrams i wrote quantity demanded and not quantity , wghat do you think the outcome will be?