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**********OFFICIAL OCR ECONOMICS F581 13th MAY 2014 THREAD************ Watch

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    What did everyone put for 1b, how opportunity cost can be applied (or something similar) to Airfix's production?
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    (Original post by JGeraghty1)
    yeah that would be fine, technically you could have also mentioned tradable permits as well or a subsidy that could be placed on firms that produce less negative externalities in comparison to lower their prices
    the only good thing i did was that - i compared this to subsidies (subsidies for firms using renewable energy) is that good enough?

    the other 'good' answer i did was that the revenue from the tax can be used for government spending for e.g afforestation or parks 'environmentally ethical'
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    (Original post by r.j.k)
    Thanks! oh god, I'm so worried about this 18 marker, it literally could be the difference between an A and a C arghhhh. Is it alright if you didn't explicitly mention examples during you discussion? cos all I did was label the diagram with the example? man, I'm so nervy! hope the exam went well for you!
    For the 18 marker, this is what I did.

    1. Defined everything in the question.
    2. Did a diagram showing that effects of an indirect tax (supply shifts to the left) I then analysed with reference to the diagram. Q and P is the point where market failure occurs.....blah blah then the indirect tax would decrease quantity supplied and increase the price...blah blah this internalises the cost.
    3. I went onto a detailed discussion on how the indirect tax might be ineffective. Standard evaluative points, such as size of tax.....harmful to industry.....China is a heavily industrialised country...blah blah so the negative stuff.
    4. I then went on to discuss some other alternatives to indirect taxation. I started with a subsidy...I mentioned that it would be more effective for the government to subsidies greener energy....so there is a viable alternative to the producers to use. I made a point mentioning that China has trillions of dollars in reserves...and could easily afford to subsidy different energy sources, which would have less neg externalities blah blah.....I then made my MAIN alternative on tradable permits. Did a diagram on how demand should increase for them...explained how they works....and how they put a direct limit on pollution levels.
    5. I then made a judgement/conclusion stating that tradable permits were the MOST EFFECTIVE solution to solving the market failure that is occurring.
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    (Original post by Hody421)
    the only good thing i did was that - i compared this to subsidies (subsidies for firms using renewable energy) is that good enough?

    the other 'good' answer i did was that the revenue from the tax can be used for government spending for e.g afforestation or parks 'environmentally ethical'
    Yeah i dont see why not! When comparing the indirect tax to a subsidy you could mention any example from afforestation to even more money to towards the NHS for healthcare problems relating to pollution or something
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    (Original post by JGeraghty1)
    Yeah i dont see why not! When comparing the indirect tax to a subsidy you could mention any example from afforestation to even more money to towards the NHS for healthcare problems relating to pollution or something
    Oh wait sorry

    Thanks
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    (Original post by tomble123)
    For the 18 marker, this is what I did.

    1. Defined everything in the question.
    2. Did a diagram showing that effects of an indirect tax (supply shifts to the right) I then analysed with reference to the diagram. Q and P is the point where market failure occurs.....blah blah then the indirect tax would decrease quantity supplied and increase the price...blah blah this internalises the cost.
    3. I went onto a detailed discussion on how the indirect tax might be ineffective. Standard evaluative points, such as size of tax.....harmful to industry.....China is a heavily industrialised country...blah blah so the negative stuff.
    4. I then went on to discuss some other alternatives to indirect taxation. I started with a subsidy...I mentioned that it would be more effective for the government to subsidies greener energy....so there is a viable alternative to the producers to use. I made a point mentioning that China has trillions of dollars in reserves...and could easily afford to subsidy different energy sources, which would have less neg externalities blah blah.....I then made my MAIN alternative on tradable permits. Did a diagram on how demand should increase for them...explained how they works....and how they put a direct limit on pollution levels.
    5. I then made a judgement/conclusion stating that tradable permits were the MOST EFFECTIVE solution to solving the market failure that is occurring.
    erm i'm 100% certain the phrase i have bolded is not true...
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    (Original post by Fas)
    erm i'm 100% certain the phrase i have bolded is not true...
    SORRY! It is to the left...I did put it to the left in the exam....my bad...it's been a long day! haha
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    (Original post by MarieHermosa)
    I did the same, but I swear the paper said something about only being able to produce a limited number of models??
    So I took that as the supply wouldn't rise
    Same !!! That's why I changed it from what I originally did , wow ocr really tricked us
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    (Original post by tomble123)
    SORRY! It is to the left...I did put it to the left in the exam....my bad...it's been a long day! haha
    thank god, i had a massive freak out for a minute there hahaha
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    (Original post by Fas)
    thank god, i had a massive freak out for a minute there hahaha
    Hahahah, sorry for scaring you!
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    (Original post by AsianBeauty)
    Same !!! That's why I changed it from what I originally did , wow ocr really tricked us
    not really. in the case study it mentioned how by moving production to China, the costs of production for Airfix had reduced. Costs of production is a determinant of supply, hence a reduction in the costs of production would naturally mean an increase in the quantity supplied.

    Basically it was saying that Airfix could only produce a limited number of model kits beforehand, however the move to China meant they could expand their production due to reduced costs. Hence on the diagram you had to show a shift to the right in the demand curve, and a shift to the right in the supply curve and then just write a brief explanation.
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    messed up on the 6a. i didnt mention any policy suggestion, i defined neg ext and examples of some. how much mark would i get u reckon?
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    Fas what did you write for the Opportunity Cost question for Airfix? I used figures from that table saying that by producing kits appealing more to a certain age group there was a cost of losing out on the percentage demand from the other age group? I couldn't find anything else in the extract so thought them figures must be there for some reason lol


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    On the reducing pollution in China question is it necessary to state an example of a policy, as surely you would just analyse why the negative externalities have arose (such as with a diagram) and then comment on the risks of this? Rather than actually suggesting how they would do it; is that not more for the 18 mark?
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    (Original post by Shaadi Baba)
    Fas what did you write for the Opportunity Cost question for Airfix? I used figures from that table saying that by producing kits appealing more to a certain age group there was a cost of losing out on the percentage demand from the other age group? I couldn't find anything else in the extract so thought them figures must be there for some reason lol


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    i said that Airfix could only produce a limited number of model kits, hence they must decide whether to produce more model planes or other types of model kits such as ships, models etc. and opportunity cost plays into this production decision as they must produce the good which has the smallest opportunity cost in order to minimise wasting resources. i'm probably gonna get 1/2 on that one cos i didn't mention about doing it to meet the demand of under-16's or over-16's haha
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    (Original post by jennymartin555)
    On the reducing pollution in China question is it necessary to state an example of a policy, as surely you would just analyse why the negative externalities have arose (such as with a diagram) and then comment on the risks of this? Rather than actually suggesting how they would do it; is that not more for the 18 mark?
    wasn't the pollution in China question only a 6 marker? the 18 marker was to do with the market failure arising from the negative externalities caused by production?
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    (Original post by Fas)
    wasn't the pollution in China question only a 6 marker? the 18 marker was to do with the market failure arising from the negative externalities caused by production?
    Yeah, so would you need to suggest a policy for how the Chinese government could reduce pollution in the 6 mark?
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    Has everybody done the paper now? Did you do a double shift on the question about the production moving to china and about that tv program?
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    mark scheme or answers to all questions anyone?
    please don't have a go, some of us don't mind knowing aha cheers
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    (Original post by RRandom96)
    Has everybody done the paper now? Did you do a double shift on the question about the production moving to china and about that tv program?
    Yeah i did, did you ?

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