Economics AS EDEXCEL 2017 Official Thread

Reply 400

Demesne7

15

Original post by Milts

trust me all this site does it scare the **** out of you loool

Legit

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Reply 401

keynes24

10

Original post by SubZero~

From my teacher. It wouldn't lead to a whole outward shift in the PPF because it's not like there is an increase in BOTH capital and consumer goods, or economic growth to shift the PPF outward. Again this is what my teacher has explained.

If you are referring to the question on how an economy can produce more capital goods the answer was A shift on the PPF. All the other answers were not related to production of capital goods and a shift on the PPF will allow you to produce more consumer goods & capital goods.

Reply 402

username1208193

20

Original post by keynes24

If you are referring to the question on how an economy can produce more capital goods the answer was A shift on the PPF. All the other answers were not related to production of capital goods and a shift on the PPF will allow you to produce more consumer goods & capital goods.

That was my argument vs. my teachers. I said in the long run if there is an increase in the number of capital goods being produced, these can further the production of consumer goods, which could lead to an outward shift in the PPF. I didn't the sit the paper since I'm in Year 13.

Reply 403

Chillichamps

8

Original post by SubZero~

That was my argument vs. my teachers. I said in the long run if there is an increase in the number of capital goods being produced, these can further the production of consumer goods, which could lead to an outward shift in the PPF. I didn't the sit the paper since I'm in Year 13.

Thing is, your reasoning is correct but the question stated most likely. An increase in capital goods does not necessarily mean more cosumer goods in the future (I know it should, but if you assume so its a sign this is less likely).

It can lead to a fall in utility as in the immediate, more capital goods means less consumer goods (opportunity cost). If output of consumer goods reduces, prices rise thus utility falls.

Reply 404

Chillichamps

8

Original post by keynes24

If you are referring to the question on how an economy can produce more capital goods the answer was A shift on the PPF. All the other answers were not related to production of capital goods and a shift on the PPF will allow you to produce more consumer goods & capital goods.

The question didnt ask how to increase capital goods, it asked what an increase in capital goods may cause.

Reply 405

keynes24

10

Original post by cricketoo567

The question didnt ask how to increase capital goods, it asked what an increase in capital goods may cause.

Which one of the following is the most likely effect of an economy producing more capital goods?

Reply 406

username1208193

20

Original post by cricketoo567

Thing is, your reasoning is correct but the question stated most likely. An increase in capital goods does not necessarily mean more cosumer goods in the future (I know it should, but if you assume so its a sign this is less likely).

It can lead to a fall in utility as in the immediate, more capital goods means less consumer goods (opportunity cost). If output of consumer goods reduces, prices rise thus utility falls.

Yeah I understand this too.

Reply 407

username1208193

20

Original post by keynes24

Which one of the following is the most likely effect of an economy producing more capital goods?

I don't think that was the question though? o.O Wasn't it "Which one of the following is the most likely effect of an increase in capital goods?" or something like that?

Reply 408

keynes24

10

Original post by SubZero~

I don't think that was the question though? o.O Wasn't it "Which one of the following is the most likely effect of an increase in capital goods?" or something like that?

That was the question.

Reply 409

username1208193

20

Original post by keynes24

That was the question.

Alright. Well in my opinion I didn't feel that any clear answer would have jumped out at me immediately if I sat that paper, given the other options to be honest.