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

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    (Original post by clara16)
    Could someone mark my jan 2012 response for the 18m PLEASE. I think I got 15 but I'm not sure...

    question is : Lines 19 to 28 give four ways in which the market failure arising from discarded chewing gummight be corrected. Discuss which of these ways might be the most effective in correcting this formof market failure.


    amd the case study ref is :
    What can cities such as Peterborough do to reduce the market failure caused by discarded gum? A remote possibility is that they might ban the sale of chewing gum as was the case in 20Singapore in 1992. This ban, which includes imports, still applies, although it was loosened
    in 2004 when therapeutic chewing gum was allowed following a free trade agreement with
    the United States of America. More feasible is that Peterborough could join forces with othertowns, cities and pressure groups in order to make sure that those who chew gum are given
    the information to make them more aware of the serious problems which they are causing
    25daily to the urban environment. A more radical way of doing this would be to put a new, highindirect tax on sales of all forms of gum, whilst introducing heavy fines for anyone who iscaught discarding gum directly onto the streets.





    On first reading, there are a few things you can do to improve your answer:

    1) Spelling - you misspelt words like "extreme" and "approach". I think spelling is taken into account, so watch out for it

    2) You need to identify the market failure! - This is really important, as merely stating "there is a market failure" is not enough - be more specific. e.g. "Chewing gum can be considered to be a demerit good, because of the existence of negative externalities - litter on streets - and information failure. This means that it is over-consumed/produced in a market economy. The government can try to reduce consumption by...." You MUST do this otherwise you will lose marks (this is L2 and L3).

    3) Explaining your tax diagram - you have to explain the effect of the tax: In your answer, there was no mention of how the tax decreases supply; you should state clearly that the tax shifts supply to the left.

    4) Your conclusion shouldn't contain "I believe" or "I think" - although I'm not sure whether they penalise you for this (don't think they will) it isn't advisable to start it with "I believe". It is much better to say "In conclusion, the government should..." or "In conclusion, [policy/solution] is the most effective..." Positive statements are more useful in economics than normative!

    5) Don't mix your micro with your macro! I'm talking about the "might make people redundant" bit. Also don't say things like "the authority will be less popular for re-election" - this is economics, not politics - it has no relevance to the question - which asks for "how effective each policy option would be to correct this market failure"

    I don't think this answer will get 15 marks, it would be less in my opinion.

    (Sorry, this post sounds horrible, but they're just suggestions for improvement there's already many good things in there and your economic theory is fine )
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    (Original post by Knowing)
    Because as my teacher says "it may be on the mark scheme for one year, but it may not be credited for this year"

    Although to be safe, just use both terms
    Fair enough
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    (Original post by Knowing)
    On first reading, there are a few things you can do to improve your answer:

    1) Spelling - you misspelt words like "extreme" and "approach". I think spelling is taken into account, so watch out for it

    2) You need to identify the market failure! - This is really important, as merely stating "there is a market failure" is not enough - be more specific. e.g. "Chewing gum can be considered to be a demerit good, because of the existence of negative externalities - litter on streets - and information failure. This means that it is over-consumed/produced in a market economy. The government can try to reduce consumption by...." You MUST do this otherwise you will lose marks (this is L2 and L3).

    3) Explaining your tax diagram - you have to explain the effect of the tax: In your answer, there was no mention of how the tax decreases supply; you should state clearly that the tax shifts supply to the left.

    4) Your conclusion shouldn't contain "I believe" or "I think" - although I'm not sure whether they penalise you for this (don't think they will) it isn't advisable to start it with "I believe". It is much better to say "In conclusion, the government should..." or "In conclusion, [policy/solution] is the most effective..." Positive statements are more useful in economics than normative!

    5) Don't mix your micro with your macro! I'm talking about the "might make people redundant" bit. Also don't say things like "the authority will be less popular for re-election" - this is economics, not politics - it has no relevance to the question - which asks for "how effective each policy option would be to correct this market failure"

    I don't think this answer will get 15 marks, it would be less in my opinion.

    (Sorry, this post sounds horrible, but they're just suggestions for improvement there's already many good things in there and your economic theory is fine )
    Thats so helpful thank you,

    spelling - yep completely agree! silly mistakes.

    Identifying the market failure, should I do this for every essay around market failure?
    DO demerit goods lead to over production/consumption because their full negative attributes aren't fully realised? if not.. why?!

    You're other points I completely agree with too, thank you so much!

    You mention L2/L3 marks, my teachers not fab tbh so I don't really understand what these mean, could you explain?

    thanks again x
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    (Original post by clara16)
    Thats so helpful thank you,

    spelling - yep completely agree! silly mistakes.

    Identifying the market failure, should I do this for every essay around market failure?
    DO demerit goods lead to over production/consumption because their full negative attributes aren't fully realised? if not.. why?!

    You're other points I completely agree with too, thank you so much!

    You mention L2/L3 marks, my teachers not fab tbh so I don't really understand what these mean, could you explain?

    thanks again x
    Yes you should always identify the market failure the examiners are looking for your understanding of market failure and the types of it, so you will have to - I haven't seen one past paper yet that hasn't required you to the most common ones are demerit/merit goods. Others are externalities, and info. failure. I don't think public goods will turn up in the essay - possibly the question before perhaps.

    Demerit goods always lead to overconsumption/production - that's the definition of demerit goods and yes, this is because society does not take into account the full extent of the costs associated with the consumption/production of the good (you can draw a diagram to show that here) - due to information failure, and so leads to a welfare loss to society.

    L2 and L3 marks often coincide with each other. Basically, L2 is for application of knowledge, and L3 is analysis.

    For L2, they look for your economic understanding. e.g. What will a certain solution to market failure do? how will the solution influence the market?

    For L3, they now want you to explain why the solution does what it does - basically you have to clarify your statements made for L2. You can do this by drawing a diagram (like the one you did) and explain fully and clearly what the solution/policy does to supply/demand, price, quantity...etc. and finally (important!) you have to link this back to the question - how does this solution solve the market failure?

    Arguably, L3 is the most important level, as you need this to get L4 marks

    Hope this helps
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    (Original post by Knowing)
    Yes you should always identify the market failure the examiners are looking for your understanding of market failure and the types of it, so you will have to - I haven't seen one past paper yet that hasn't required you to the most common ones are demerit/merit goods. Others are externalities, and info. failure. I don't think public goods will turn up in the essay - possibly the question before perhaps.

    Demerit goods always lead to overconsumption/production - that's the definition of demerit goods and yes, this is because society does not take into account the full extent of the costs associated with the consumption/production of the good (you can draw a diagram to show that here) - due to information failure, and so leads to a welfare loss to society.

    L2 and L3 marks often coincide with each other. Basically, L2 is for application of knowledge, and L3 is analysis.

    For L2, they look for your economic understanding. e.g. What will a certain solution to market failure do? how will the solution influence the market?

    For L3, they now want you to explain why the solution does what it does - basically you have to clarify your statements made for L2. You can do this by drawing a diagram (like the one you did) and explain fully and clearly what the solution/policy does to supply/demand, price, quantity...etc. and finally (important!) you have to link this back to the question - how does this solution solve the market failure?

    Arguably, L3 is the most important level, as you need this to get L4 marks

    Hope this helps
    seriously this his is more helpful than a whole year in my economics lessons! if you wouldn't mind, can you just explain L1 & L4 marking points and I will be out of your hair!!
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    What is the benefit of consumer and producer surplus?
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    (Original post by clara16)
    seriously this his is more helpful than a whole year in my economics lessons! if you wouldn't mind, can you just explain L1 & L4 marking points and I will be out of your hair!!
    Haha it's fine, ask more if you need I've been blessed with an amazing economics department who teach us so much exam technique

    L1 is knowledge - basically definitions. you'll need to be able to define things like "market failure", "Demerit/merit good", "negative/positive externality", etc.. you don't have to go over the top with definitions - as long as the key terms are defined (basically the things it asks for in the question: you should define the problem leading to the market failure, and also define the solution proposed)

    L4 is evaluation - my favourite phrase for this section is "however, it depends on..." In this section, you have to explain situations when the proposed solution may be less effective, or may be more effective. Typical evaluation points are:
    Elasticities, Size of the increases/decreases in demand(extent of the solution), alternatives to the proposed solution - what would be more effective?, other factors affecting may offset the solution...
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    (Original post by poma123)
    What is the benefit of consumer and producer surplus?
    The benefit is the extra utility gained by the consumer equivalent to the price they are willing to pay and the price that is actually paid.

    Similarly with producer surplus, this is the extra benefit gained by producers equivalent to the price they are willing to supply at and the price that they sell at (market price)
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    (Original post by Knowing)
    Haha it's fine, ask more if you need I've been blessed with an amazing economics department who teach us so much exam technique

    L1 is knowledge - basically definitions. you'll need to be able to define things like "market failure", "Demerit/merit good", "negative/positive externality", etc.. you don't have to go over the top with definitions - as long as the key terms are defined (basically the things it asks for in the question: you should define the problem leading to the market failure, and also define the solution proposed)

    L4 is evaluation - my favourite phrase for this section is "however, it depends on..." In this section, you have to explain situations when the proposed solution may be less effective, or may be more effective. Typical evaluation points are:
    Elasticities, Size of the increases/decreases in demand(extent of the solution), alternatives to the proposed solution - what would be more effective?, other factors affecting may offset the solution...
    So my basic plan for an f581 18m question to get 15-18 should be
    1) define terms in the question,
    2) define market failure & explain why market failure has arisen,

    Then the next points will depend on the qu but...

    3) state advantages and explain with diagram if appropriate, making sure to say why the diagram has done what it has.
    4) state disadvantages and explain, diagram etc...
    5) Explain what may effect the success of solution.
    6) Give judgement as to what is the best solution & using it depends evaluate it including the factors which may offset the solution.
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    does anyone know how to comment on a diagram which both supply and demand curve shift?
    my teacher told me that i have to say that it depends on the elasticity of both demand and supply, but how do i put it into words?
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    When explaining the advantages and disadvantages in an essay, does that count as Level 3 or 4?
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    (Original post by clara16)
    .
    Hey everyone: just thought this might be helpful to see what to write in an essay. This got 18/18 in 2011.

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    (Original post by May-o2q)
    does anyone know how to comment on a diagram which both supply and demand curve shift?
    my teacher told me that i have to say that it depends on the elasticity of both demand and supply, but how do i put it into words?
    If both supply and demand shift;

    You first describe what the shift in demand does. Then describe what the shift in supply does. Then state the final position of the market equilibrium.

    When commenting/evaluating it:

    You have to say something like "the extent of the final increase/decrease in price/quantity will depend on the relative size of the shifts - if demand shifts more/less than supply shifts, then price/quantity will increase/decrease more/less..." (use whichever is appropriate to the question)

    Elasticities can be mentioned, but don't go in depth, as you'll be there forever if there are two shifts. Elasticities are much better for use in a single shift question.
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    (Original post by Knowing)
    Hey everyone: just thought this might be helpful to see what to write in an essay. This got 18/18 in 2011.

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    Thanks!! That's really helpful... where did you find these from?
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    (Original post by lionelmessi19)
    Thanks!! That's really helpful... where did you find these from?
    It's an exam script from someone who went to my school he got it remarked and got 18 both times


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    (Original post by Knowing)
    It's an exam script from someone who went to my school he got it remarked and got 18 both times


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    Wow! Do you have any more you can share?
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    (Original post by lionelmessi19)
    Thanks!! That's really helpful... where did you find these from?
    I've done GCSE and AS economics at two of the best schools in the country and don't have a ****ing clue what the first diagram is.

    so guys don't worry.

    my teacher (who is the chief examiner for economics) has given me the 'perfect structure' to the 18 marker and this doesn't match it- It isn't actually an amazing answer...
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    (Original post by itsn0b0dy)
    I've done GCSE and AS economics at two of the best schools in the country and don't have a ****ing clue what the first diagram is.

    so guys don't worry.

    my teacher (who is the chief examiner for economics) has given me the 'perfect structure' to the 18 marker and this doesn't match it- It isn't actually an amazing answer...
    The first diagram is actually a diagram showing the effect of an externality. This student went on to study E&M at Oxford as well as getting A and A* and AS and A2.

    My teacher is also a chief examiner for OCR - and I also go to one of the best schools in the country - with around 30 successful applicants to Oxbridge each year, 5 of which were for economics last year. The fact that your teacher gives a "perfect structure" makes me question the validity of their judgement, seeing as there is no "perfect structure" to essays. Plus it doesn't matter if it's not an amazing answer - this is the hardest essay question I have come across out of all past papers, and it ticked all the boxes to get 18 marks.
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    (Original post by itsn0b0dy)
    I've done GCSE and AS economics at two of the best schools in the country and don't have a ****ing clue what the first diagram is.

    so guys don't worry.

    my teacher (who is the chief examiner for economics) has given me the 'perfect structure' to the 18 marker and this doesn't match it- It isn't actually an amazing answer...
    That's a diagram for negative externalities.. It is usually a supply and demand diagram, but can be draw using labels of marginal social benefit and marginal private benefit (I think that's what its called)..

    What's your perfect structure to the 18 marker.. please share
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    (Original post by May-o2q)
    What part of market failure do u find difficult? Market failure occurs when the free market mechanism failed to achieve economic efficiency. Maybe u can ask yr question to be more specific and I'm happy to help u if yr problem is what I understand. )


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    I'm just struggling on the 18marker question because my teacher told me that it will always be on market failure and we have hardly done any practise on doing the 18 marker. I get the basically of market failure and government intervention but I'm just finding it hard have to apply these to answering the 18 marker and knowing the kinds of things to put into my answer
    Sorry this is so last minute it's always been that one thing I put to the bottom on the list and never get round at looking at it!
 
 
 
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