OCR F581 Markets in Action - 11 May 2015 Watch

KitsonnostiK
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#421
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Hey guys, does anybody know if there are any exemplar essays (of policies correcting market failure) that are specific to OCR?

Cheers!


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KitsonnostiK
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#422
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(Original post by socialgain)
A market equilibrium diagram with vertical supply.
https://ib-econ.wikispaces.com/file/...le_permits.jpg

Can someone list the L3 and L4 points for T.P?
Can you explain this diagram to me, please? Not been taught this one myself.

Cheers


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azo
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(Original post by Maths97Student)
How does unequal income distribution cause market failure?
You've mixed up the two sides of the course. Unequal income distribution is macro, market failure is micro.
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_Fergo
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(Original post by Yousf)
I was doing another past paper, and i have a few questions. For question 3, can i say the travel to Maldives may be expensive, as one of the determinants of demand.
Also for the other determinant i said, if there is a decrease in disposable income, this will mean less people can afford taking holidays to Maldives and thus the demand will fall indicated by a shift of the demand curve to the right. Would this point worth be 3marks?
Thanks, i really appreicate your help.
A fall in demand is indicated by a shift of the demand curve to the LEFT. Don't make this error -it can negate your whole answer.

Otherwise, you would take two marks.

(Original post by KitsonnostiK)
Can you explain this diagram to me, please? Not been taught this one myself.

Cheers


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In the case of TP, the supply curve is perfectly inelastic, as the number of permits given to firms is fixed. The price is determined by the demand -the higher the demand, the more expensive the permits.

If the government were to increase the permits, the supply curve would shift to the right (and vice versa).
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OrionMusicNet
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(Original post by KitsonnostiK)
Hey guys, does anybody know if there are any exemplar essays (of policies correcting market failure) that are specific to OCR?

Cheers!


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I have one at the end of my unit 1 notes:
http://www.mediafire.com/view/4ait8a...vel_Notes.docx
I made notes for unit 2 and it also has a model answer as well at the end, hopefully it helps:
http://www.mediafire.com/view/1blv5a...Finished).docx
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OrionMusicNet
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(Original post by Maths97Student)
How does unequal income distribution cause market failure?
I don't recall it ever causing market failure, you sure you aren't mixing it up with something else?
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azo
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do we need to know about property rights system?
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Gladiatorsword
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(Original post by azo)
do we need to know about property rights system?
Not at all. You've got the wrong syllabus

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azo
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Am I right that information provision doesn't eliminate negative externalities arising from consumption of demerit goods (eg costs to NHS) as it moves the perceived MPB ---> actual MPB, but not to the MSB...?????
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keynes24
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(Original post by azo)
Am I right that information provision doesn't eliminate negative externalities arising from consumption of demerit goods (eg costs to NHS) as it moves the perceived MPB ---> actual MPB, but not to the MSB...?????
NHS or cost to the NHS is not a demerit good. Information provision can encourage the consumption of merit goods and discourage the consumption of demerit goods
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Nchomuzinda
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Comment on the business relevance of cross price elasticity of demand 8 marks
2m for calculations
2marks for saying they are strong substitues
1m for saying if X price increase Y quantity demanded increases
3m for evaluation ?
-elasticities change over time
- data are just estimates therefore may not be accurate
- elasticities don't take into account other factors that influence demand
-


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azo
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(Original post by keynes24)
NHS or cost to the NHS is not a demerit good. Information provision can encourage the consumption of merit goods and discourage the consumption of demerit goods
I said the cost to NHS is a negative externality. Let me use the example of smoking.
People underestimate the harmful effects of smoking so the perceived MPB is above the actual MPB. Information provision will reduce consumption to where actual MPB=MPC.
But this isn't the socially optimal level of output as consuming where MPB=MSC doesn't consider external costs like those to the NHS,
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keynes24
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(Original post by azo)
I said the cost to NHS is a negative externality. Let me use the example of smoking.
People underestimate the harmful effects of smoking so the perceived MPB is above the actual MPB. Information provision will reduce consumption to where actual MPB=MPC.
But this isn't the socially optimal level of output as consuming where MPB=MSC doesn't consider external costs like those to the NHS,
Health care ( or cost to the NHS )is not considered to provide any external cost. I understood what you meant, I am trying to indicate it is wrong. For OCR it is not needed to consider negative externalities from consumption but if that's the case MPB>MSB , the aim of information provision is to take the market where MSB=MSC, reference to "actual" is not as accurate as referring to social
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azo
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(Original post by keynes24)
Health care ( or cost to the NHS )is not considered to provide any external cost. I understood what you meant, I am trying to indicate it is wrong. For OCR it is not needed to consider negative externalities from consumption but if that's the case MPB>MSB , the aim of information provision is to take the market where MSB=MSC, reference to "actual" is not as accurate as referring to social
I wasn't aware of this....

Would you mind going through the L2/L3/L4 points for an 18 marker on information provision. What sort of style what it take?

Thanks for your advice, been v helpful
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username1297160
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Do negative externalities refer to both over consumption and over production or just one? Vice versa for positive externalities.
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keynes24
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(Original post by azo)
I wasn't aware of this....

Would you mind going through the L2/L3/L4 points for an 18 marker on information provision. What sort of style what it take?

Thanks for your advice, been v helpful
The layout depends on the question but the mark scheme gives you a clear indication on how to approach it.
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keynes24
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(Original post by lowhigh)
Do negative externalities refer to both over consumption and over production or just one? Vice versa for positive externalities.
Overconsumption/overproducing and positive externalities could lead to underconsumption/underproduction
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Rubyx
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(Original post by Yousf)
Can saying data are estimates, liable to inaccuries and can change over time, be fine for the commnt section
Yup! I remember writing something like for for my depends on.
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azo
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(Original post by keynes24)
The layout depends on the question but the mark scheme gives you a clear indication on how to approach it.
If it was: is information provision the most effective solution to market failure?
I don't think an essay has been asked on information provision before.
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_Fergo
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(Original post by lowhigh)
Do negative externalities refer to both over consumption and over production or just one? Vice versa for positive externalities.
Both.

There are positive and negative externalities of production and consumption.

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