OCR F581 Markets in Action - 11 May 2015 Watch

mickel_w
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#761
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#761
Only saw this thread today. Thank you for making it, its been a massive help!

I was wondering if someone could mark the 18 marker I just completed from a past paper? I mark all the other questions myself but find it hard to accurately mark the 18 marker, I'm always a little biased and probably give myself a few too many marks :P

Taken from the January 2011 paper if you need the mark scheme, be honest on your marking please! I want to see what mistakes I make in order to improve thanks in advance!
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RaghuR5
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(Original post by Super199)
Indirect taxes and de-merit goods/negative externalities causing market failure.

L1 - Definition of indirect taxes , demerit goods, negative externalities and market failure.

L2 - Apply to question - global warming is a negative externality. Say what the social costs are and that they exceed the private cost. Give example of indirect tax (VAT). I have never really understood how L2 works. Is it just applications?

L3 - Supply shifts to left. Causes price to rise from P to P1. Increases producers costs which reduces overproduction and overconsumption. Maybe label the bit of the consumer burden and the producer burden.

L3 - Market is more allocatively efficiency as it solves overproduction. Increases welfare. Could have used a negative externality diagram - not sure if you get any L3 for this?

L4 - Depends on elasticity of the good. If the good is elastic more will be put on the producer? So will reduce overproduction? Deters production by raising cost of production - advantage

L4- Will not reduce output if PED is inelastic. Expensive. Alternative method if to do with global warming could be tradeable permits.

Then conclusion...
Ah, thanks dude
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keynes24
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(Original post by Super199)
Indirect taxes and de-merit goods/negative externalities causing market failure.

L1 - Definition of indirect taxes , demerit goods, negative externalities and market failure.

L2 - Apply to question - global warming is a negative externality. Say what the social costs are and that they exceed the private cost. Give example of indirect tax (VAT). I have never really understood how L2 works. Is it just applications?

L3 - Supply shifts to left. Causes price to rise from P to P1. Increases producers costs which reduces overproduction and overconsumption. Maybe label the bit of the consumer burden and the producer burden.

L3 - Market is more allocatively efficiency as it solves overproduction. Increases welfare. Could have used a negative externality diagram - not sure if you get any L3 for this?

L4 - Depends on elasticity of the good. If the good is elastic more will be put on the producer? So will reduce overproduction? Deters production by raising cost of production - advantage

L4- Will not reduce output if PED is inelastic. Expensive. Alternative method if to do with global warming could be tradeable permits.

Then conclusion...
L3 - you should mention the impact on quantity, a negative externality diagram is NOT required. You could explain how negative externalities are internalised instead.
L4- the 2 comments are the same (PED) and you should be careful never to refer to just "elasticity of the good" since there are many elasticises.
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clara16
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Hi i'm resitting this paper to boost my overall grade into an A* hopefully.
Just wondering if anyone has any predictions of things the case study may be based around?
My feeling is that privatisation of the post office was rather topical around the time our exam was written... perhaps this could lead to questions around the argument of state/non state provision...
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midgemeister7
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(Original post by Yousf)
What product? Theres no demerit goods in tradeable permits, only negative externalities that arise causing the pollution
It's a hypothetical representation of how a product/good/service would theoretically be affected. In an essay you would say: Costs of production increase when a permit is bought. This results in price increasing from P1 to P2.
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RazorBlade3000
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(Original post by Super199)
Ah right so you either say firms cost of production increases so supply falls.
Or you do a diagram for demand falling. Not both together?
I think it would be better to focus on one point, the consumer or producer at a time in a paragraph but you can further analyse the other in a seperate diagram and paragraph
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Super199
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Anyone care to mark my tradeable pollution permits essay. Haven't attached the diagrams but it should make sense. Thanks
Attached files
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AssassinXJ
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#768
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Anyone have a good answer for the 18 marker from May 2010 (reducing indirect tax on petrol/diesel in the UK)

Thanks!!
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jamesnicholson9
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(Original post by Super199)
Anyone care to mark my tradeable pollution permits essay. Haven't attached the diagrams but it should make sense. Thanks
Your definitions (Level 1) are reasonable except market failure, it is to do with allocative efficiency not being present rather than economic efficiency. Level 2 could do with greater depth but that might be because I can't actually see the diagrams. Level 3 needs more explanation and try to attach diagrams to the points made in Level 3. Level 4 and conclusion are good as well.

I'd probably give it 15/16
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Super199
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Need help with the June 2014 F581 question.

"Comment on the extent to which the Chinese government should aim to reduce the negative externalities of pollution"

How do you get the comment marks.

The first 3 marks I would say. A negative externality is where the social costs of an action exceed the private costs. This means there is overproduction and overconsumption. As a result we get market failure as economic efficiency is not achieved since we are not at the socially optimum level.
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Super199
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(Original post by jamesnicholson9)
Your definitions (Level 1) are reasonable except market failure, it is to do with allocative efficiency not being present rather than economic efficiency. Level 2 could do with greater depth but that might be because I can't actually see the diagrams. Level 3 needs more explanation and try to attach diagrams to the points made in Level 3. Level 4 and conclusion are good as well.

I'd probably give it 15/16
How do you get L2 marks?
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jamesnicholson9
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(Original post by Super199)
Need help with the June 2014 F581 question.

"Comment on the extent to which the Chinese government should aim to reduce the negative externalities of pollution"

How do you get the comment marks.

The first 3 marks I would say. A negative externality is where the social costs of an action exceed the private costs. This means there is overproduction and overconsumption. As a result we get market failure as economic efficiency is not achieved since we are not at the socially optimum level.
Write about how it will be difficult for the government to attach a monetary value to the negative externalities and therefore apply a policy which will work as it is likely that it may lead to government failure from overmeasuring or undermeasuring the NEs
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jamesnicholson9
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(Original post by Super199)
How do you get L2 marks?
It's all about application really, one easy way of getting application is on your diagrams, rather than just labelling P and Q on the axes, label them with "P of the good/service in question" and "Q of good/service in question". However, they don't always give you a context. In which case, try to think of something relevant as an example and briefly write about it.
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Super199
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(Original post by jamesnicholson9)
Write about how it will be difficult for the government to attach a monetary value to the negative externalities and therefore apply a policy which will work as it is likely that it may lead to government failure from overmeasuring or undermeasuring the NEs
Care to write me the further 3 marks. Like I am not too sure. I would just say there is an opportunity cost and government intervening could lead to further government failure. Whether it will reduce negative externality or cause more benefit.
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jamesnicholson9
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(Original post by Super199)
Care to write me the further 3 marks. Like I am not too sure. I would just say there is an opportunity cost and government intervening could lead to further government failure. Whether it will reduce negative externality or cause more benefit.
I'm a bit busy at the minute mate. I think you just need to bring in diagrams more and explain exactly what is occurring in them leading to the correction of the market failure. Also, tighten up on your definitions between now and Monday.

Good luck!
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MilesMcgrady
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(Original post by jamesnicholson9)
I'm a bit busy at the minute mate. I think you just need to bring in diagrams more and explain exactly what is occurring in them leading to the correction of the market failure. Also, tighten up on your definitions between now and Monday.

Good luck!
Get you and your tighten up your defintions keynes
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jamesnicholson9
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(Original post by MilesMcgrady)
Get you and your tighten up your defintions keynes
Hi, Miles! Welcome to the thread. How are you feeling about Monday?
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MilesMcgrady
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(Original post by jamesnicholson9)
Hi, Miles! Welcome to the thread. How are you feeling about Monday?
Waxa kid, you?
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jamesnicholson9
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(Original post by MilesMcgrady)
Waxa kid, you?
What is this waxa you speak of?
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MilesMcgrady
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(Original post by jamesnicholson9)
What is this waxa you speak of?
Pardon me. Quietly confident I would say, would quite enjoy an 18 marker on policies to correct market failure from negative externalities.
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