2016 Edexcel Economics A: Paper 1 Intro To Markets And Market Failure (May 16th)

Renting for a property and purchasing housing are both forms of shelter .
The Help to buy scheme decreased price for houses so demand for renting falls because of the negative XED ( Since subs)

I thought the help to buy scheme encourages people to buy more houses as the subsidy was for the people not for the firms. So would that not increase the price of houses?

I sent out a load of unit 1 adapted papers to people on here and I've just had another look at the June 2015 one and guess what… it's almost exactly the same as what we got in our mock!! At least 6g is, the one question I didn't do since I did 6f so our paper was like a mix between June 2015 and the sample assessment

Negative Xed? Subs have a positive XED

could you have spoken about Revenue for the rent market and how it increases?

I honestly don't think the 10 marker had any reference to XED. I asked my Economics teacher who looked through the paper this morning and he said so... even my friends agreed as we wrote the same thing about subsidies by defining it and explaining how it will affect the market.

Well it did... so gg A grade

Lol mentioned that they were substitutes but forgot to write XED formula.......ggwp

Why would the demand for rental properties increase? Shouldn't it decrease because prices for houses have fallen? Either that, or prices for house may increase because of the increased amount of demand...? Which one's right?

Hmm, did you mention anything about XED in general? i.e. an increase in supply for houses, due to subsidies, means the equilibrium price falls, which means demand for rental decreases because they are substitutes?

You may lose one or two marks for not mentioning XED is positive/the formula, but you should be okay if you show the reasoning for a fall in demand for rental markets.

Also what were your evaluations? I put:

- Expensive rental markets not affected, as subsidy is for new buyers (tends to buy cheap houses).

- Magnitude of subsidy changes magnitude of demand fall for rental markets?

Yup I explained everything about substitutes just didn't put the formula lmao. I evaluated that some people may still be unable to afford the mortgage even if it's been subsidised so they will still have to rent. Also, demand for rent amongst expatriates especially those on work permits will stay the same because it's simply not economically feasible to buy a house to stay in for the duration of the work permit! And something else I forgot lol

Yup I explained everything about substitutes just didn't put the formula lmao. I evaluated that some people may still be unable to afford the mortgage even if it's been subsidised so they will still have to rent. Also, demand for rent amongst expatriates especially those on work permits will stay the same because it's simply not economically feasible to buy a house to stay in for the duration of the work permit! And something else I forgot lol

Haha, very good second evaluation point! How did you think of that in the exam situation? I was too busy shitting my pants because of the first question... Never mind my urge to actually take a dump...

You should be fine, as the analysis points are out of 6, so if you feel like you've written enough, especially with a subsidy diagram, you may still get 6/6.

Gl with C1 in 10 hours! (if you take maths)

The formula will only be worth one mark so I wouldn't stress over that too much. It sounds like you answered it well.

Haha thanks. Most people didn't think of that point and didn't get it when I tried to explain it to them so I thought I messed up. Glad some people understand it good luck for C1! (if you do Maths)