OCR F581 Markets in Action - 11 May 2015 Watch

09sandhua
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#1921
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#1921
(Original post by *Stefan*)
-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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I spoke about how farmers couldn't comprehnd the values, how they were in elastic and what that means and what farmers would then do
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_Fergo
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#1922
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#1922
(Original post by 09sandhua)
I spoke about how farmers couldn't comprehnd the values, how they were in elastic and what that means and what farmers would then do
The first one is into L4 territory (sort of) but the others are analysis -the first three marks.

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Ecconomist
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#1923
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#1923
[QUOTEin*Stefan*;55661589]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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Thank you, yes I also acknowleged the impact on consumer surplus as well as the extension in demand due to the fall in price etc..

Also, in an 18 mark q like this, do you think it's really expected to analyse an alternative method in order to access the 16-18. Would it suffice to explicitally answer the question wih your opinion and then discuss long run effectiveness and other ideas etc to form a balanced argument.
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09sandhua
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#1924
I bivouacs expanded on it, didn't just leave it at that, but I was so happy to see the 18 mark question
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keynes24
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#1925
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#1925
(Original post by Slenderman)
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.
Definition
Subsidising merit goods
Diagram
Reference to cost of production falling
Right shift in supply
Price falls (p1 to p2)
Quantity rises (q1 to q2)
It could reduce the underconsumption of merit goods, more affordable, higher consumer surplus, more allocative efficient
Evaluation
Opportunity cost
PED
It may lead to inefficiency
Some goods have both positive and negative externalities, you could argue that some negative externalities could take place
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justfly
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#1926
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#1926
HEYYYY please put me out of my misery - MY essay was not based on the case study instead it correcting the market failure of under consumed merit goods like fruit, veg and rice etc and how subsidies help to overcomethis...have i been capped??? i thought i wrote a perfect 18/18 essay until I heard about people writing about biofuels...
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Mrmillion51
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#1927
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#1927
What did you guys right for the public good question (6 marks)?
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_Fergo
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#1928
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#1928
(Original post by Slenderman)
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.
L1 -Definition of subsidies and market failure. (4 marks)

L2 - Application and/or examples. Application means what a subsidy does, basically, and examples are any subsidy that you can think of. (4 marks)

L3 Band 1 - Diagrammatic explanation of how subsidies work and affect the market. (2 marks)
L3 Band 2 - Diagrammatic or not explanation of how subsidies correct market failure (allocative efficiency, reduces under-production etc and other stuff like -increases consumer surplus. (2 marks)

L4 - Evaluation: opportunity cost, difficulty in measures the amount of the subsidy, comparisons with other policies etc. (4 marks)

EE - Judgment - basically answer the question in a conclusive manner. (2 marks)

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Dayzh
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#1929
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#1929
For Q2, " Using D+S, eplain why price of agricultural goods could rise significantly ", could you have drawn both an increase in demand and decrease in supply on one diagram?
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kieranfitchett
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#1930
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#1930
(Original post by justfly)
HEYYYY please put me out of my misery - MY essay was not based on the case study instead it correcting the market failure of under consumed merit goods like fruit, veg and rice etc and how subsidies help to overcomethis...have i been capped??? i thought i wrote a perfect 18/18 essay until I heard about people writing about biofuels...
same, mine was purely theory, it's never meant i've been capped on any past papers that various teachers have marked, i'm personally not worried, it's not like the question said 'with reference to the case study...'
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Slenderman
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#1931
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#1931
Do you have to base your 18 marker off the case study? I've never done that before but my teachers always gave me marks like 10-16.
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username1304194
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#1932
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#1932
(Original post by justfly)
HEYYYY please put me out of my misery - MY essay was not based on the case study instead it correcting the market failure of under consumed merit goods like fruit, veg and rice etc and how subsidies help to overcomethis...have i been capped??? i thought i wrote a perfect 18/18 essay until I heard about people writing about biofuels...
The question did not have any reference to agricultural goods, so idk why people are saying it did. Regardless of whether it did or didn't, you are still allowed to write the essay with reference to agricultural goods or without. They are both allowed I wrote mine without it haha

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_Fergo
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#1933
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(Original post by justfly)
HEYYYY please put me out of my misery - MY essay was not based on the case study instead it correcting the market failure of under consumed merit goods like fruit, veg and rice etc and how subsidies help to overcomethis...have i been capped??? i thought i wrote a perfect 18/18 essay until I heard about people writing about biofuels...
It was not necessary to base it on the case. It said how subsidies to producers can reduce market failure, not "using the case study, discuss... "

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_Fergo
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#1934
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#1934
(Original post by Dayzh)
For Q2, " Using D+S, eplain why price of agricultural goods could rise significantly ", could you have drawn both an increase in demand and decrease in supply on one diagram?
Yes.

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justfly
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#1935
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#1935
(Original post by *Stefan*)
It was not necessary to base it on the case. It said how subsidies to producers can reduce market failure, not "using the case study, discuss... "

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On the unofficial mark scheme for an increase in demand it says quantity would decrease, isnt that wrong?

"Shift demand right​* as there is a higher demand forsustainable energy and biofuel crops. This also causes anincrease in price and decrease in quantity. (that is not referringto rice/wheat production)"
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_Fergo
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#1936
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(Original post by justfly)
On the unofficial mark scheme for an increase in demand it says quantity would decrease, isnt that wrong?

"Shift demand right​* as there is a higher demand forsustainable energy and biofuel crops. This also causes anincrease in price and decrease in quantity. (that is not referringto rice/wheat production)"
Which question are you referring to here? Haven't actually fully read the mark scheme yet.

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justfly
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#1937
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(Original post by *Stefan*)
Which question are you referring to here? Haven't actually fully read the mark scheme yet.

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the one where it asked about increasing price significantly on D/S supply diagram (question 2 I believe?)

surely an increase in demand means an increase price AND INCREASE IN QUANTITY NOT fall in quantity????
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_Fergo
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#1938
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(Original post by justfly)
the one where it asked about increasing price significantly on D/S supply diagram (question 2 I believe?)

surely an increase in demand means an increase price AND INCREASE IN QUANTITY NOT fall in quantity????
Indeed.

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justfly
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#1939
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#1939
(Original post by *Stefan*)
Indeed.

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and for the first question about allocative effieincy, could you say there is only limited water but unlimited needs for it for maize production, bio fuel etc???(forgot case study e.g)
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_Fergo
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#1940
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(Original post by justfly)
and for the first question about allocative effieincy, could you say there is only limited water but unlimited needs for it for maize production, bio fuel etc???(forgot case study e.g)
You mean the economic problem I assume (not allocative efficiency).

You should specify that logic, since it was limited, producers had to make a choice on what to produce. If you did, it's 4 easy marks (with the addition of the definition of course).

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