Well i thought that i aced the exam, until i came on here.
For the subsidy i wrote a lot, but thought the question was basically asking is it right for the Gov to increase the incentive to produce biofuels - please tell me this is correct!
And i got carried away with the last question, i basically just wrote everything about ETS, problems with it and discussion - use a carbon tax with/without ets. I also drew a market failure diagram with the tax making the new price and qauntity that of social optimum.
I basically assumed that it was obvious that the negatve externality was the co2 emissions and didnt really state that, have a lost lots of marks on these questions????
The subsidy question was definitley about the case for and against governments using subsidies for the production of energy crops and the effects they will have. Read the question about 3 times to make sure i was answering it right.
I don't think the question is difficult to interpret at all. Both of the angles people here have looked at DO answer the questions. The question doesn't ask: Discuss the effectiveness of subsidies in encouraging the production of energy costs. The question asks, comment on the case. The case for whether they should be encouraged has not been answered for you.
Ideally? I'd wanted to have worked BOTH angles into my answer. Both the angle about whether we should encourage their use, AND, whether subsidies are a good way of doing it.
Anyone saying that it's so narrow is wrong. I'm not saying that OCR will see it that way - they are irreverent as hell - but the question is easily interpretable in either way. Neither are incorrect. I don't think solely going one way or t'other will be a good answer.
effects of subsidy ...diagram was definately needed.... shift of supply to the right..... i talked about... poor information and political interference.. when deciding subsidies.. also subsidies wil provide a incentive for farmers as a income.. to produce energy crops..... i also mentionedd.. floods and droughts... this may lead to further government failure as energy crops may not be efficiest in the long run and may not be competetive with petrol and oil.,.... i also talked about..motoring lobby..and pressure groupps... thats why government may choose t pay farmers....
inda disadvantages talked about.... how it wil have a oppurtunity cost... as it will lead to increase in prices for food if farmers are producing biofuels instead of foood.. therefore increase in prices... and with increase in global demand for food from countries such as...brazi...india....china....a nd russia........ also mentioned how... subsidies will take substantial budget of government,.... which may also have a oppurtunity cost.. and may cause trade offs and political trauma.......
what do u guys think.. ok answer????
oh i drew a negative externality diagram....with a effect of subsidiy onto consumers.... ....
how did u all do.. paper was okk werent it....it was similar to mock paper... well hal of mock paper was sme as dis one.... haha howw ironic........
thank u jim riley i love u old man.. u have possible got me a A or a B