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    will any of you going to resit unit 2?
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    (Original post by epic within)
    will any of you going to resit unit 2?
    Yep
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    (Original post by IJKninetyeight)
    If people want to know the exact mark scheme for the Buffer stock question and Vaccine Externalities question they both appeared on the Jan 2012 paper - Q7 and Q8


    Buffer Stock:
    ---> • Understanding or explanation of buffer stock scheme(for example: agency sells from buffer stock in times of poor harvest and buys or adds to it in times of good harvest. (1 mark).Note this explanation must consider both the buying and selling function of the buffer stock to secure a mark).• Identification that in 2010 there is a bad harvest / or supply has decreased (1 mark).• Without intervention the price would rise to P3 or point Z (1 mark)• Government agency sells Q3-Q2 or XY of wheat from its stockpile to establish a price of P2 (this may be shown by annotation of the diagram) (1 mark).• Government agency revenue from the sale is Q3Q2XY(this may be shown by annotation of diagram but needs to be labelled or referred to in answer) (1mark).Rejection marks• Option A incorrect since there is a poor harvest that could lead to an excess demand for wheat (1 mark).• Option B incorrect since the agency will sell Q2Q3XY from its stockpile – not buy. (1 mark)Note: do not double award if already credited in the explanation.• Option C incorrect since price would increase to P3 ina free market or to a maximum of P2 under the bufferstock scheme. (1 mark).


    Externalities:
    • Definition of welfare gain (the excess of social benefit over social cost for a given quantity) (1mark).• Identification or annotation of diagram to identify welfare gain as area XZY (accept welfare loss)(1 mark).• Identification of the free market equilibrium as pointX or quantity Qe and the social optimum as point Or quantity Q1 (1 mark).• Definition of external benefits: (positive third party effects / benefits external to an exchange/ benefits the price mechanism ignores / benefits outside the market transaction / difference between social benefits and private benefits / positive spillover effects) (1 mark).• Application to vaccinations: welfare gain or external benefits include a reduction in the spread of diseases since more people vaccinated. (1 mark).Rejection marks• Option A incorrect since the social optimum quantity's Q1 or Y which is greater than the free marketquantity Qe or X. (1 mark)Note: do not double award if already credited in the explanation• Option B incorrect since welfare gain is area XZYNote: do not double award if this area has already been credited in the explanation) (1 mark).• Option D incorrect since marginal social cost (X or Pe) is less than marginal social benefit (Z ) (must state the letters) (1 mark).

    Some dates may be wrong because its in context of 2012.
    Thank you.
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    I think I got around 28 in the MCQ and around 39 in the data response (hopefully) giving me 67 marks out of 100. This should be enough for 90 UMS, I hope.
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    Can we go over section B question 9?
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    Is the unofficial mark scheme out yet ?
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    (Original post by Ringles)
    Can we go over section B question 9?
    Yea sure mate..
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    (Original post by krish12345678)
    Is the unofficial mark scheme out yet ?
    So for the MCQ we have answers to:The PPF question- the answer was that producing more capital goods would lead to economic growthThe YED question about meats- Fish has a higher YED than meatThe buffer stock question- the government would sell from its stockpileThe price mechanism question- acts as a signal for firms to make production decisionsThe question about Ibiza- decrease in revenue as demand is elasticThe question about a rise in producer surplus- increase in technology will increase producer surplusThe externality question- there would be a net welfare gain The free market/ market failure question- the under provision of public goods.......
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    (Original post by A-LevelEconomist)
    So for the MCQ we have answers to:The PPF question- the answer was that producing more capital goods would lead to economic growthThe YED question about meats- Fish has a higher YED than meatThe buffer stock question- the government would sell from its stockpileThe price mechanism question- acts as a signal for firms to make production decisionsThe question about Ibiza- decrease in revenue as demand is elasticThe question about a rise in producer surplus- increase in technology will increase producer surplusThe externality question- there would be a net welfare gain The free market/ market failure question- the under provision of public goods.......
    I think it was meat had a higher YED than fish
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    (Original post by Ringles)
    Can we go over section B question 9?
    a) decreased consumption from China and increased supply leads to lower price

    b) was lower revenue for producers could lead to unemployment as producers are trying to cut costs

    depends on PED
    and some other factors

    c) decrease in costs shift S to the right

    d) diagram (4 marks ) definition (1 mark) reduction to producer and consumer surplus (1 mark) higher prices (1 mark) increased in production costs ( 1 mark)

    depends on the magnitude
    extract said that they lose tax revenue because of lower prices, but increasing that will lead to lower demand and and lower revenue
    depends on ped
    may lead to unemployment
    and some other factors

    e) definition (1 mark), diagram showing an increase in supply and price (2 marks), diagram showing reduction in external costs ( 3 marks) efficient firms can raise revenue by selling excess permits, governments receive tax revenue which could be used to reduce external costs

    problems if the price is too high or too low
    government failure because majority of permits are issued for free
    increases costs for firms impact on investment and jobs
    big firms can just buy permits and continue to pollute
    not every country is part of the scheme
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    TSR Support Team
    (Original post by ACTT)
    I got 6/8 correct , not awful but not good
    Same here
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    (Original post by epic within)
    a) decreased consumption from China and increased supply leads to lower price

    b) was lower revenue for producers could lead to unemployment as producers are trying to cut costs

    depends on PED
    and some other factors

    c) decrease in costs shift S to the right

    d) diagram (4 marks ) definition (1 mark) reduction to producer and consumer surplus (1 mark) higher prices (1 mark) increased in production costs ( 1 mark)

    depends on the magnitude
    extract said that they lose tax revenue because of lower prices, but increasing that will lead to lower demand and and lower revenue
    depends on ped
    may lead to unemployment
    and some other factors

    e) definition (1 mark), diagram showing an increase in supply and price (2 marks), diagram showing reduction in external costs ( 3 marks) efficient firms can raise revenue by selling excess permits, governments receive tax revenue which could be used to reduce external costs

    problems if the price is too high or too low
    government failure because majority of permits are issued for free
    increases costs for firms impact on investment and jobs
    big firms can just buy permits and continue to pollute
    not every country is part of the scheme
    e ) this question came up in 2013
    KAA = 8 marks
    Understanding / considering the benefits oftradable pollution permits include :
    • Definition or understanding of tradable pollutionpermits (a limit placed on firms carbon emissionsthrough issue of permits / permits can bepurchased and sold / fines if firms exceed limitwithout buying permits) (1+1 marks).
    • Data reference: e.g. Australian governmentintends to reduce carbon emissions by 5% by 2020/ Australia accounts for 1.5% of greenhouse gasemissions (1 mark) Benefits of tradable pollution permits to reducepollution (2+2+2+2 or 3+3+2 marks): NB: Do not award for discussion of benefits inreducing air pollution and impact of globalwarming. The focus has to be on the merits anddemerits of the system of tradable permits.
    • A market created for buying and selling carbonpermits / use of price mechanism to internaliseexternal costs / the best way to reduce carbonemissions.
    • This may be shown through a relevant externalitydiagram / where external costs are internalisedthrough trade in carbon permits / somedevelopment e.g. reduce welfare loss or identifyrevenue from sale of carbon permit (1+1+1marks).
    • Use of demand and supply diagram / depicting adecrease in supply of permits and its subsequentincrease in price of permits (1+1 marks)
    (14)
    • Australia is one of the world’s largest carbonpolluters per head of population / so the scheme isjustified to help reduce global emissions.
    • The Australian emissions trading scheme is similarto the EU and so could help create a global scheme/ especially as China and South Korea showinterest in setting up one.
    • Government can raise funds by selling somepollution permits / revenue can be used to reduceeffects of pollution / subsidise cleaner technology /compensate victims.
    • Firms have an incentive to invest in cleantechnology / then sell excess permits to other firms/ or bank surplus permits for future years.
    • The heavy polluting firms are disadvantaged byexperiencing higher production costs from buyingextra permits/ whereas the cleaner firms are at anadvantage with relatively lower production costsfrom selling surplus permits.
    • Data bias could exist as Anglo AmericanCorporation may be exaggerating theunemployment effects of an emissions tradingscheme. Evaluation = 6 marks
      Consideration of the limitations of tradablepollution permits for reducing pollution or theirdisadvantages (2+2+2 or 3+3 marks):
      • Extract 2 suggests huge increase in costs formining industry of A$25 billion by 2020 / manyjobs directly and indirectly at risk / development ofthis point e.g. related industries such as miningtools industry or manufacturing industry.
      • Extract 2 indicates that Australia only accounts for1.5 per cent of global carbon emissions / not muchpoint setting up the scheme compared to the costfor mining companies.
      • Extract 2 suggests a decrease in mininginvestment projects / development of this pointe.g. reduce Australia’s ability to meet futureenergy needs.

    • Little incentive for firms to reduce pollution since /94.5 per cent of permits issued for free and sogovernment failure / heavy polluters can purchasesurplus permits from other firms rather than investin expensive clean technology.
    • Disputes arise over allocation of permits / possiblebarriers to entry.
    • A cost to the government of monitoring andenforcing carbon pollution emissions rules.
    • The valuation of pollution permits may be too riskyto leave to the market.
    • Problem that most countries in the world are notpart of an emissions trading scheme especially US(apart from California).
    • Other schemes might be more effective in reducingcarbon emissions e.g. carbon offsetting orrenewable energy certificates.
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    For question 9) d) For the indirect tax diagram did we have to draw 3 supply curves, one for original supply, one for s+tax and another for s+increased tax?
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    (Original post by IJKninetyeight)
    For question 9) d) For the indirect tax diagram did we have to draw 3 supply curves, one for original supply, one for s+tax and another for s+increased tax?
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    (Original post by emilia_claire)
    I think it was meat had a higher YED than fish
    Yes sorry wrote it wrong.
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    Hey everyone, I took the exam today, in the MCQ's for the increasing the producer surplus for instant coffee producers question, what option did everyone pick? The options were a) successful advertising campaign for tea b) better technology c) poor harvest for coffee d) increase in indirect tax

    I immediately rejected A or D as they decrease producer surplus, and I put C, but I think it might be B, both kind of make sense- anyone clarify?
    :P thanks
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    (Original post by azizadil1998)
    Hey everyone, I took the exam today, in the MCQ's for the increasing the producer surplus for instant coffee producers question, what option did everyone pick? The options were a) successful advertising campaign for tea b) better technology c) poor harvest for coffee d) increase in indirect tax

    I immediately rejected A or D as they decrease producer surplus, and I put C, but I think it might be B, both kind of make sense- anyone clarify?
    :P thanks
    Better tech. Decrease in production costs, encourages firms to increase their supply

    Posted from TSR Mobile
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    (Original post by azizadil1998)
    Hey everyone, I took the exam today, in the MCQ's for the increasing the producer surplus for instant coffee producers question, what option did everyone pick? The options were a) successful advertising campaign for tea b) better technology c) poor harvest for coffee d) increase in indirect tax

    I immediately rejected A or D as they decrease producer surplus, and I put C, but I think it might be B, both kind of make sense- anyone clarify?
    :P thanks
    The Answer was B- An increase in technology, as it shifts the Supply Curve to the right increasing producer surplus.
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    (Original post by Princepieman)
    Better tech. Decrease in production costs, encourages firms to increase their supply

    Posted from TSR Mobile
    Yeah I get the lower production costs but because of a poor harvest the price would go up wouldnt it? Meaning the difference between what they're willing to sell at and market price increases; and I thought better technology would lead to an outward shift in supply so a lower price?
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    (Original post by azizadil1998)
    Yeah I get the lower production costs but because of a poor harvest the price would go up wouldnt it? Meaning the difference between what they're willing to sell at and market price increases; and I thought better technology would lead to an outward shift in supply so a lower price?
    Producer surplus and consumer surplus are different. Pushing the supply curve down increases the gap between what suppliers are willing to pay (higher) and what they are actually paying (lower).

    Posted from TSR Mobile
 
 
 
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