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1. can somebody please give a detailed analysis for the following

1.the Gauss-Markov conditions and other assumptions required in the application of the classical regression model,
2.reasons for expecting violations of these assumptions in certain circumstances,
3.tests for violations, and
4.potential remedial measures, including, where appropriate, the use of instrumental variables.

thanks
2. Hi! I was wondering whether you could give me a few ideas of the dynamic effects of integration within the EU. I have ones like allocative efficiency, competition gains, contestability but do you know anymore?
I've tried to google it but the ideas are pretty samey, just wondering whether you knew anything with a bit more analysis. ThankyoU!
3. Hi
Can you help me with this question from the Jan 05 edexcel economics paper?

Illustrating your answer with diagrams, compare and contrast two possible objectives of directors of a large PLC supermarket
4. I would imagine it will be profit maximisation versus profit satisficing. The former being where the company operates at MC=MR, the latter where they produce just enough profit to satisfy shareholders.
5. (Original post by enigma2009)
can somebody please give a detailed analysis for the following
I'll do my best

1.the Gauss-Markov conditions and other assumptions required in the application of the classical regression model,
The key ones are Gausss Markov

- The conditional mean of u (error) is 0
that is E(u / X1,...,Xt) = E(u) = 0

- In a regression, (X,Y) are independently and identically distributed
- The population variance of u is constant for all observations
- Normality assumption of error
- No perfect multicollinearity

Key property is also unbiasedness.

2.reasons for expecting violations of these assumptions in certain circumstances,
Model may not be linear/incorrectly specified, multicollinearity, biased estimates. can you be abit more specific.

3.tests for violations
If you have access to stata, there are many tests you can do. For eg, for normality you can do Jaques-Bera test but you need to obtain some values for this formula from a statistical program like stata.

4.potential remedial measures, including, where appropriate, the use of instrumental variables.
Not 100% on this sorry.
6. 2. Sally and John live on an isolated island. Both of them can produce pies and orange juice. For Sally it takes 1 hour to produce 1 pie and half an hour to produce 1 glass of juice. For John it takes 1.5 hours to produce 1 pie and 10 minutes to produce 1 glass of juice. Both Sally and John work 6 hours per day.

a. Who has an absolute advantage in producing pies and juice?

b. What is Sally’s opportunity cost of producing 1 pie in terms of glasses of juice? What is John’s opportunity cost of producing 1 pie? Who has comparative advantage in producing pies and juice? Draw Sally’s and John’s production possibility curves.
c. Assume that without trade Sally produces and consumes 3 pies and 6 glasses of juice and John produces and consumes 2 pies and 18 glasses of juice. Indicate these points on the Sally’s and John’s PPC.
d. Now trade can be introduced. Give an example how Sally and John can benefit from trade. What is the condition for mutually beneficial trade?

How do I do part d? I know its something simple, but missed it in the lecture. What do we do with the ppcs to find the condition for mutually beneficial trade?
7. Sally is the most efficient producer of pies and John of juice. If they spend all their time making these instead of splitting production between the two, the total amount available will increase.
8. Ok cool, so they just specialise in the tasks where they have absolute advantage?
9. In this situation yes, but generally they specialise in areas of comparative advantage. In this case, the two are the same.
10. (Original post by Apagg)
In this situation yes, but generally they specialise in areas of comparative advantage. In this case, the two are the same.
I read they usually specialise in areas of absolute advantage (where they are more efficient) ?
11. They do. But imagine a situation where Sally is more efficient at producing both pies and juice than John. It would seem that she should not trade with John as she has absolute advantage in both goods.

The above link explains it more clearly than I can.
12. See ive covered and revised mostly everything on my syllabus. but what i dont get.
and whats still highlighted, and left un-crossed out.. is this

Understand the relationship between external costs and diseconomies of scale.
Understand the relationship between external benefits and external economies of scale.

Its edexcel!

Hope you can help me out.

13. (Original post by kashmir.noir)
See ive covered and revised mostly everything on my syllabus. but what i dont get.
and whats still highlighted, and left un-crossed out.. is this

Understand the relationship between external costs and diseconomies of scale.
Understand the relationship between external benefits and external economies of scale.

Its edexcel!

Hope you can help me out.

I suppose they are referring to external diseconomies of scale..as the industry gets bigger (eg the fishing industry), resources (fish) become scarcer and thus more expensive (resulting in diseconomies of scale). But overfishing also imposes an external cost because the fish may become extinct, which has an impact on biodiversity.

External economies of scale like the establishment of training institutes and good transport networks have external benefits because other people gain from training (a merit good) and efficient transport networks (saves everyone's time). Hope that helps!
14. Explain the relationship between the terms of trade and the balance of payments of a nation.

Any help with this question would be greatly appreciated.
I suppose they are referring to external diseconomies of scale..as the industry gets bigger (eg the fishing industry), resources (fish) become scarcer and thus more expensive (resulting in diseconomies of scale). But overfishing also imposes an external cost because the fish may become extinct, which has an impact on biodiversity.

External economies of scale like the establishment of training institutes and good transport networks have external benefits because other people gain from training (a merit good) and efficient transport networks (saves everyone's time). Hope that helps!

i feel so stupid.
like actually.
HOW COULD I NOT GET THAT??

i replied on the other post, with the mark schemes for 1,2,3,4 Jan 2007. I have them, and i have no idea how i got them.

16. Here is a big nasty question......just need a quick plan if possible big rep points for good answer

Discuss the extent to which long term decline is inveitable in the manufacturing industry of economically developed countries.

This is what I got so far (as a plan)
(MEDC = more economically developed counties - LEDC = less economically developed countries)

Define long term decline - Long term decline is a reduction in employment in a specific industry resulting from lower demand for goods due to lack of competitiveness or lack of appropriate investment. Reduced employment may be accompanied by a reduce in output.

As a country becomes more developed its cost of living increases, this therefore results in an increase in labour costs. This increase in labour costs results in a higher cost of unit production therefore making hte firm less competitive. However, cost of living is varied throught a country, so manufacturers could relocate elsewhere to find areas that have lower cost of living therefore meaning labour costs can decrease.

Also, MEDC's generally have better education this therefore results in people being able to fullfill jobs that require greater skills resulting in a more valued product being made. Refering to comparitive advantage, if a country can then produce these goods at the same cost as manufacturing and yet they are valued greater, then it can use trade to benefit it......(something is missing here)

Im stuck here......just need more really....

17. 3. * Suppose demand is a straight line as follows: Qd = 100 – 2P.
a. Calculate the price elasticity of demand between the prices of \$41 and \$43.
b. Calculate the price elasticity of demand when price is equal 10.

How do we do part B? Cos when you work out price elasticity of demand, it has to be with respect to another price/demand ..... Or do we just do it with regards to one of the values from part a?

Any help will be repped
18. Why does the government not leave the distribution of income solely to the free market?? (OCR)

(Original post by tanusha-tomsk)
Ask me A-Level economics question and I'll be happy to help, esp. Edexcel

NB: I don't do Labour Economics, and although I will do the best giving you a few intelligent guess pointers, I cannot give you *exactly* what your essay requires.

In case you are wondering, I just love economics that much and want to practice my skills. Other keen economists, you are welcome to help me answer the questions!

Let's post all of the economics questions here instead of starting new threads every time!

Please post sensibly, only the questions that you have no clue about - not because you are to lazy to think. Don't make me feel like I'm helping you cheat! ^o)

Rep always appreciated! And thanks to people for these rep point:

19. Why does the government not leave the distribution of income solely to the free market?? (OCR)

(Original post by tanusha-tomsk)
Ask me A-Level economics question and I'll be happy to help, esp. Edexcel

NB: I don't do Labour Economics, and although I will do the best giving you a few intelligent guess pointers, I cannot give you *exactly* what your essay requires.

In case you are wondering, I just love economics that much and want to practice my skills. Other keen economists, you are welcome to help me answer the questions!

Let's post all of the economics questions here instead of starting new threads every time!

Please post sensibly, only the questions that you have no clue about - not because you are to lazy to think. Don't make me feel like I'm helping you cheat! ^o)

Rep always appreciated! And thanks to people for these rep point:

20. (Original post by bally)
3. * Suppose demand is a straight line as follows: Qd = 100 – 2P.
a. Calculate the price elasticity of demand between the prices of \$41 and \$43.
b. Calculate the price elasticity of demand when price is equal 10.

How do we do part B? Cos when you work out price elasticity of demand, it has to be with respect to another price/demand ..... Or do we just do it with regards to one of the values from part a?

Any help will be repped
technically, price elasticity of demand is found by dQ/dP * (P/Q). So differentiate the demand curve with respect to P to get -2. Then multiply by (P/Q) which is 2 * (10/80) = -0.25
So the PED at that point on the demand curve is =-0.25
It will vary at different points along the demand curve, as I'm sure you know.

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