OCR F581 Markets in Action - 11 May 2015 Watch

freyalawrence
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#1841
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#1841
I put that it's under consumed so a subsidy is given to increase quantity. Is this right?
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09sandhua
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#1842
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#1842
What did people get for the "give to things that determine the elasticity of demand for agricultural products"
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jojoj
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#1843
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#1843
(Original post by chloe-jessica)
The question was asking whether subsidies would always been effective and you gave instances when they would not be, for example you probably wouldn't want to subsidise demerit goods. In my opinion, you answered the question.
oh yeah that is true thanks
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camlin
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#1844
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#1844
For the 18 marks, if I mentioned the third party and negative externalities, which is wrong (I panicked) will I be capped?
I thought my essay was ok until people started talking about it
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c223
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#1845
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#1845
(Original post by mayhs98)
For the 2 [6 marks] comment on questions at the end is it 2 marks just for putting the definition of allocative efficiency (i put when quantity demanded equals to quantity supplied) and 2 marks for putting the definition of public goods (i put goods which are non-rivalry and non-exludability) ?
This is just my guess, but I would say it would be something along the lines of 1 mark for defining allocative efficiency and 2 marks for applying this to the case study and saying how the market was becoming more allocatively efficient. Then the other three marks would come from the other point of view - how the market is not becoming allocatively efficient.
For the public goods one, you might get one/two marks for giving the two characteristics and defining them, then another two/one (depending on allocation of first marks) for applying it to the given examples. The remaining three would be from talking about why the examples might not be public goods, for example they could be quasi public goods.
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Mrmillion51
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#1846
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#1846
(Original post by 09sandhua)
What did people get for the "give to things that determine the elasticity of demand for agricultural products"

I put Income and and Substitutes. What did you put?
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c223
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#1847
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#1847
(Original post by Yousf)
what did you write for the allocative effeciency question?
I can't remember exactly but it was something along these lines:
I defined allocative efficiency as when goods are produced at the socially optimum level of output and consumer satisfaction is maximised. I then went on to apply this to the case study, mentioning that biofuel could possibly be considered a merit good since it's a sustainable, non-polluting source of energy and as the market is producing more, output is moving towards the socially optimum level. Somewhere in the case study it mentioned that consumers were pleased with the extra supply or something like that so I brought that in as my point about consumer satisfaction being maximised.
Then I went on to say that despite the biofuel market moving to become more allocatively efficient, other markets weren't. For example, less of agricultural products such as rice were being produced and as rice is a staple good for many people, the production was moving further away from the socially optimum level. Also, consumer satisfaction was not maximised with regards to the fall in leisure facilities and open spaces or whatever the case study mentioned. I eventually went on to conclude that biofuel is becoming more allocatively efficient but the rest aren't.
This was just my answer, I'm not sure how correct/incorrect this was.
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Yousf
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#1848
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#1848
(Original post by camlin)
For the 18 marks, if I mentioned the third party and negative externalities, which is wrong (I panicked) will I be capped?
I thought my essay was ok until people started talking about it
There was negative externalities involoved. When they grew the biofuel product, this would affect the landscape as mentioned in the case study, which would affect local people as their scenery would be ruined, these are costs on the third party when subsidising the biofuel crops.
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camlin
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#1849
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#1849
(Original post by Yousf)
There was negative externalities involoved. When they grew the biofuel product, this would affect the landscape as mentioned in the case study, which would affect local people as their scenery would be ruined, these are costs on the third party when subsidising the biofuel crops.
I just thought why would Government subsides biofeul crops if it has a lot of negative impacts, and could be a negative externality?
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09sandhua
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#1850
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#1850
Exactly the same high five
My idiot friend did tastes and fashion
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Yousf
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#1851
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#1851
(Original post by camlin)
I just thought why would Government subsides biofeul crops if it has a lot of negative impacts, and could be a negative externality?
Thats why the question asked to Asses, so you had to list the potential advantages and drawbacks of the subsidy.
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Mrmillion51
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#1852
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#1852
(Original post by 09sandhua)
Exactly the same high five
My idiot friend did tastes and fashion

For a start I had no clue what to do. Then I explained that one of the goods may be much more expensive than the other.

For the substitute I put people could substitute it for another product which is almost the same but cheaper.

What did you say for the income and substitutes?
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c223
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#1853
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#1853
(Original post by camlin)
For the 18 marks, if I mentioned the third party and negative externalities, which is wrong (I panicked) will I be capped?
I thought my essay was ok until people started talking about it
The 18 mark made no reference to the case study so you didn't really need to include it. As someone mentioned above, there were negative externalities (positive ones too, of course). Don't panic about it
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freyalawrence
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#1854
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#1854
(Original post by chloe-jessica)
Sounds like a good answer to me it was balanced and you included alternatives, you possibly could have done with a little bit more evaluation saying whether subsidies would be effective at all times (eg. talk about PED of good and level of subsidy given) but what you've written here definitely sounds relevant so don't worry!
Hi, if I wrote that the underconsumption occurred creating market failure which meant that government offered subsidies to increase the quantity then would that still be correct or not?
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jojoj
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#1855
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#1855
is there going to be an unofficial mark scheme for each question
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midgemeister7
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#1856
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#1856
(Original post by freyalawrence)
Hi, if I wrote that the underconsumption occurred creating market failure which meant that government offered subsidies to increase the quantity then would that still be correct or not?
Yes, that's exactly what the question wanted pretty much
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c223
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#1857
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#1857
(Original post by freyalawrence)
Hi, if I wrote that the underconsumption occurred creating market failure which meant that government offered subsidies to increase the quantity then would that still be correct or not?
The theory is correct, yes. It would need explanation and evaluation but what you have written is essentially right
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jojoj
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#1858
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#1858
how did people explain the question about ​determinates of ped.
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midgemeister7
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#1859
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#1859
(Original post by jojoj)
how did people explain the question about ​determinates of ped.
1. Some products might be more expensive with respect to income, therefore price rises will mean people are more likely to cease buying them so they have a higher PED
2. Availability of substitutes also affects PED. Eg rice has very few direct substitutes, so its PED is likely to be higher than other food products
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camlin
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#1860
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#1860
(Original post by chloe-jessica)
The 18 mark made no reference to the case study so you didn't really need to include it. As someone mentioned above, there were negative externalities (positive ones too, of course). Don't panic about it
Just wondered if ill be capped because I mentioned the wrong third party. And I cant even remember what I wrote exactly, but okay thanks
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