OCR F581 Markets in Action - 11 May 2015 Watch

JellyCat99
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#1901
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#1901
(Original post by JYNE)
I said allocative efficiency was when the market is economic efficient, is that wrong? Completely forgot the actual definition in the exam (when consumer satisfaction is maximised)
I think that's wrong... Economic efficiency is when both productive and allocative efficiency are achieved...


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JellyCat99
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#1902
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#1902
For the allocative efficiency question, I defined it and said how it could be allocative let efficient etc, but then said that the introduction of the subsidy may distort market signals, making it ultimately inefficient due to government intervention??? Is this right? I was rushing this question so much near the end...


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Yousf
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#1903
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#1903
I drew like 10 diagrams all over the first page to come to a conclusion on what to shift.....
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Ecconomist
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#1904
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#1904
(Original post by *Stefan)
This is easily the most debatable question -the inclusion of significant made it tricky.

I personally shifted both curves, but I don't see why any shift at all would be incorrect.

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I understand both aspects... the fall in supply is undoubtedly correct but it's whether biofuel crops are regarded as agricultural products, because wheat and rice are obviously not substitute goods with biofuel crops ie. one product's loss of demand is not another's gain.

The fact that it said significant makes me think you are right however, but the question was ambiguous...
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_Fergo
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#1905
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#1905
(Original post by Ecconomist)
I understand both aspects... the fall in supply is undoubtedly correct but it's whether biofuel crops are regarded as agricultural products, because wheat and rice are obviously not substitute goods with biofuel crops ie. one product's loss of demand is not another's gain.

The fact that it said significant makes me think you are right however, but the question was ambiguous...
Did it specify "agricultural products"? I don't think so.

But even if it did, you weren't expected to directly apply it to the case -you just needed to show how a change COULD happen. The question was purely hypothetical, and should be treated as such.

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mickel_w
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#1906
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#1906
Thank you!
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keynes24
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#1907
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#1907
(Original post by Ecconomist)
I understand both aspects... the fall in supply is undoubtedly correct but it's whether biofuel crops are regarded as agricultural products, because wheat and rice are obviously not substitute goods with biofuel crops ie. one product's loss of demand is not another's gain.

The fact that it said significant makes me think you are right however, but the question was ambiguous...
The question refers to agricultural products so you can assume PED and PES are both inelastic. I highly doubt you need both shifts since the question does not indicate to look for both shifts or different reasons. If shifting demand the PES should be inelastic and if shifting supply the PED should be inelastic.
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Kitty260
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#1908
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#1908
Ive failed that..
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Yousf
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#1909
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#1909
(Original post by *Stefan*)
Did it specify "agricultural products"? I don't think so.

But even if it did, you weren't expected to directly apply it to the case -you just needed to show how a change COULD happen. The question was purely hypothetical, and should be treated as such.

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I think it was helpful to elaborate on points if you linked to the case study, how did you do your 18marker, did you relate to the case study?
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_Fergo
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#1910
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#1910
(Original post by Yousf)
It was much more easier to elaborate on points if you linked to the case study, how did you do your 18marker, did you relate to the case study?
It was easy regardless. The diagram is worth 4 marks, and then 2 marks for a plain explanation.

I didn't directly, though I did refer to subsidies on agricultural goods.

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Theonej98
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#1911
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#1911
I thought agricultural products where wine grapes and rice
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Ecconomist
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#1912
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#1912
(Original post by *Stefan*)
Did it specify "agricultural products"? I don't think so.

But even if it did, you weren't expected to directly apply it to the case -you just needed to show how a change COULD happen. The question was purely hincl. Merpothetical, and should be treated as such.

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Yes it did specify agricultural products but as you say I think it may have been a hypothetical situation then since there is no other reason as to why the word was in there...

Moreover, for the 18 marker, I focussed a lot of my essay on how subsidies would correct market failure and so on as part of my analysis... but only dedicated a couple of lines as to how goods like biofuel crops which give rise to positive externalities give rise to market failure... ie. defined market failue, and stated that if left to free market forces, product would be underprovided with q<s.o level... is this enough? I assumed that the main bulk of the analysis was explaining how subsidies CORRECT such market failure and thoroughly analysed how this could happen... or would it be expected a diagram of underproduction in free market?
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09sandhua
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#1913
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#1913
You know for the 'comment on the relevance of the pes calculations' what did you put in that answer?
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freyalawrence
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#1914
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#1914
(Original post by midgemeister7)
Yes, that's exactly what the question wanted pretty much
Ah okay thank you so much
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_Fergo
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#1915
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#1915
(Original post by Ecconomist)
Yes it did specify agricultural products but as you say I think it may have been a hypothetical situation then since there is no other reason as to why the word was in there...

Moreover, for the 18 marker, I focussed a lot of my essay on how subsidies would correct market failure and so on as part of my analysis... but only dedicated a couple of lines as to how goods like biofuel crops which give rise to positive externalities give rise to market failure... ie. defined market failue, and stated that if left to free market forces, product would be underprovided with q<s.o level... is this enough? I assumed that the main bulk of the analysis was explaining how subsidies CORRECT such market failure and thoroughly analysed how this could happen... or would it be expected a diagram of underproduction in free market?
L3 is worth four marks overall.

The first two may be obtained by an explained diagram and/or the advantages of subsidies, and the latter two may be obtained by explaining how it actually corrects market failure. You only need two explained or three semi-explained points to unlock full marks for this question. If you thoroughly analysed it, then you surely got it.

I also added the fact that consumer surplus increases and the lower price may in turn encourage more consumption of the merit good -just as an added poi to.

You would not be expected to have a diagram, but I always use one because it saves a lot of unnecessary and lengthy wording. Not using one is perfectly fine if the theory required has been explained.

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jojoj
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#1916
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#1916
(Original post by Mrmillion51)
I put Income and and Substitutes. What did you put?
how did you explain it because stating it will only get u a mark each
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_Fergo
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#1917
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#1917
(Original post by 09sandhua)
You know for the 'comment on the relevance of the pes calculations' what did you put in that answer?
-Values are estimates and may be based on incorrect info, thereby may be liable to inaccuracies.
-Values change over time, and may well be wrong by the time of publication.
-Values assume ceteris paribus, when another variable factor, like weather, may change.
(3 on quality of values)
-Most businesses don't consider PES values, meaning that PES is not significant.
(1 on quality of PES itself)

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TazLi
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#1918
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#1918
(Original post by KhamZ_98)
This is why its an unofficial mark scheme. Just because we did not mention it, it does not mean that its wrong. OCR have several meetings during the marking periods and will alter their mark schemes according to how different candidates answered the questions.
Consider this a "first draft" of what the final mark scheme will look like from OCR.
Okay I understand, never seen an unofficial mark scheme so professionally done impressive!
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_Fergo
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#1919
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#1919
(Original post by TazLi)
Okay I understand, never seen an unofficial mark scheme so professionally done impressive!
It has an Illuminati vibe to it :P

I wonder whose idea this was!

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Slenderman
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#1920
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#1920
Can someone tell me an example of a statement to make in a 18 marker to get into the levels?

L1
L2
L3 Band 1/2
L4

Just wondering see if I hit that criteria.
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