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Reply 80

5

Two main inflows on Ecuador's current account 2001 were from oil exports and money sent home by Ecuador's citizens working abroad. Explain the implications for Ecuador's economy of relying on these inflows (4) Thanks in advance

Reply 81

CorpusNinja

15

Chilly

Two main inflows on Ecuador's current account 2001 were from oil exports and money sent home by Ecuador's citizens working abroad. Explain the implications for Ecuador's economy of relying on these inflows (4) Thanks in advance

volatility springs to mind. oil prices may not be so high forever (tapping new supplies etc.) and remittances are equally unreliable - depend on economic conditions in foreign countries.

Reply 82

Nish05

i got this question - Expplain the likely effect of the central london congestion charge on car traffic levels. illistrate you answer with an externalites diagram (Edexcel JUNE 2005 UNIT 2) - ii thought it was a postive externality but it turned out to be a totally differant diagram + tax whch i cant draw - it's relating to internalizing the externality, could you explain it please!! i'm confused at the mo!! thanks a lot!

Reply 83

tanusha-tomsk

OP

18

Guys, I will answer your other questions too, but this is the easiest one and I only have 7 minutes now, so here goes for Nish05:

Nish05

i got this question - Expplain the likely effect of the central london congestion charge on car traffic levels. illistrate you answer with an externalites diagram (Edexcel JUNE 2005 UNIT 2) - ii thought it was a postive externality but it turned out to be a totally differant diagram + tax whch i cant draw - it's relating to internalizing the externality, could you explain it please!! i'm confused at the mo!! thanks a lot!

Hi! No, this is about negative externalities that arise when there are too many cars in Central London (e.g. air and noise pollution, increased number of accidents and the costs associated with them, increased costs for businesses because the lorries take longer to deliver / manage fewer journeys per day because of the traffic). The diagram is standard, with MPB=MSB, whilst MSC diverges upwards from MPC. The natural equillibrium is where MPB=MPC. To eliminate externalities (in theory - that is if you can calculate the value of the external cost, but how much is enviroment worth, or a life of someone who's been in an accident?) you would need to increase the cost of each journey using a tax (e.g. congestion charge). Before the C.Charge, third parties (e.g. businesses, people who live along a particular stretch of a road) had to pay for the traffic jams (businesses - because of increased cost of delivery, people - because of pollution e.g. asthma attacs). After the C.Charge, if the motorists decide to drive through Central London anyway they will have to pay for the external cost (externality) they create. This is what is meant by internalising externalities.

:smile:

Hope that helps!

road pricing.bmp488.4KB

Reply 84

Nish05

yep that was great!!! thanks a lot!!!

Reply 85

Vivacious_Sky

What are the effect/costs of current account deficit/surplus and how does it effect the value of the £ in long run?
(I am a new member btw so any help would be really aprreciated!!)

Reply 86

tanusha-tomsk

OP

18

Chilly

Two main inflows on Ecuador's current account 2001 were from oil exports and money sent home by Ecuador's citizens working abroad. Explain the implications for Ecuador's economy of relying on these inflows (4) Thanks in advance

As Biggie-n said, plus:
Net exporters of oil can benefit from high oil prices (balance of trade in goods is great, exporting brings in enough revenue to import etc.) However, if a natural disaster / civil war strike, Ecuador's economy would be compromised.
It's only 4 marks...

Reply 87

Freddy C

Examine the contention that, in the context of floating exchange rates, the UK’s trade deficit does not represent a problem for the British economy

plus, What is the relationship between the exchange rate and interest rate, I always though higher interest rate = higher exchange rate.

but then I heard that "...Conversely, a fall in the exchange rate will typically boost export demand, and so put upward pressure on both inflation and interest rates."

I'm confused.

Edit: another question: What effects might the decline in union membership be expected to have on the operation of the UK labour market?

Thanks

Reply 88

jinesh88

hi there,
im wondering if you could possibly help me with economics unit 4 for aqa? there is an 84 mark question and im not too sure exactly how to structure it. i also use the same economics text book you were talking about alain anderton and there are a few points about europe which i need to know, but not much. thanks see what you can do

Reply 89

ash213

2

i need help with a unit 6 question, eco king.
Evaluate the implications of a significan reduction in barriers to the trade in goods and services for the global economy. (60)

its a toughie...
pls help!

Reply 90

tanusha-tomsk

OP

18

jinesh88

hi there,
im wondering if you could possibly help me with economics unit 4 for aqa? there is an 84 mark question and im not too sure exactly how to structure it. i also use the same economics text book you were talking about alain anderton and there are a few points about europe which i need to know, but not much. thanks see what you can do

what's the question lol? :biggrin:

Reply 91

tanusha-tomsk

OP

18

Freddy C

Examine the contention that, in the context of floating exchange rates, the UK’s trade deficit does not represent a problem for the British economy
plus, What is the relationship between the exchange rate and interest rate, I always though higher interest rate = higher exchange rate.
but then I heard that "...Conversely, a fall in the exchange rate will typically boost export demand, and so put upward pressure on both inflation and interest rates."
I'm confused.
Edit: another question: What effects might the decline in union membership be expected to have on the operation of the UK labour market?
Thanks

Firstly, exchange rate and interest rate.

AD = Consumption + Investment + Government expenditure + value of eXports - value of iMports = C + I + G + (X - M). If the exchange rate falls, UK goods become more price competitive both in the UK and abroad. So, exports rise and imports fall. Therefore, (X-M) becomes larger >> AD rises >> inflation increases >> inflationary pressures make Bank of England increase interest rates. Ok?

For the second question (labor markets), is that a unit 5A question Edexcel? Or not? How many marks are available?

A reduction in union membership will make it easier for businesses to hire and fire staff. That makes labour (errr what's the word.... argh how annoying!!! anyone help me?). Some economists argue that it would result in an increase in employment, because before the employers would limit number of workers to a minimum to avoid problems like maternity leave, sick pay, difficulties with firing. So the number of employees will rise in the short run. However, the second side to it is that it will be easier to fire people. In thory that would mean that productivity of firms will increase in general because employees will be more efficient and competent. That could lead to an increase in productive potential of the economy > economic growth.
However, that also means that the employee will only work until someone better / more quallified submits a CV for the same job. That would make labour market more competitive, especially in the long run as people will recognise that quallifications and experience become more important. Could to some extent lead to an increased demand for higher education / training. This would have a negative effect on equity within population. Mothers who have been bringing up kids will be very disadvantaged, as will be the disabled and people who can not / could not afford to receive good education for some reason. It is the survival of the fittest, and is never fair (oops we must not use this word; equitable is our friend) equitable on people at the lower end of distribution of income.

Hope that helps :smile:

You can explain the above points in greater detail to score more marks.

Erm I'll come back to you with the exchange rates & trade deficit question.

Reply 92

tanusha-tomsk

OP

18

ash213

i need help with a unit 6 question, eco king.
Evaluate the implications of a significan reduction in barriers to the trade in goods and services for the global economy. (60)

its a toughie...
pls help!

Erm I've noticed I've answered 2 questions for you very recently, and while I'm very flattered (I'm a girl by the way) I feel used by someone who doesn't want to work himself. I'm here to help people, not do their homework for them. I have a life too you know?

In case I'm terribly wrong about you and your grandparents just died and you had meningitis and missed 6 months of school where you've been bullied before that anyway, here are some points.

- High mobility of resources, human as well as capital, leads to better allocation of resources >> growth of the world economy.
- Makes global markets more competitive because the prices for goods reflect the costs of production and efficiency of producers.
- Great for consumers but developing countries will be disadvantaged as producers like tesco will squeeze them to lower the cost.
- Globalisation will increase interdependecy and will minimise the possibility of wars in the future.
- Increased specialisation because countries will seek to produce what they are best at. That could lead to a decline of whole industries in many countries, leaving many people unemployed and increasing pressure on the government. It is already happening in the UK (car manufacturers close down). Could be offset if workers find jobs in other uprising industries but are they flexible enough to do new jobs?

For 60 marks you need 4 points + evaluation. 15 marks per point. The rest is up to you.

Reply 93

jinesh88

tanusha-tomsk

what's the question lol? :biggrin:

A question like this perhaps, its an 84 mark question and im unsure about how i am going to be able to get all of them.there is a link at the bottom which shows you extracts that come with the question.thank you :smile:

Requirements of the report
You are to write a report entitled: ‘Economic Reasons for, and Consequences of, the Common Agricultural
Policy’.
Your report should:
_ explain why agricultural products are often regarded by governments as products requiring intervention in
the market;
_ explain what the CAP was intended to achieve, and why it has caused problems such as ‘butter mountains’;
_ evaluate the benefits and the costs of the CAP;
_ conclude by recommending reforms to the CAP, giving reasons to justify your recommendations.
Use economic concepts and principles where appropriate. You will be given credit for demonstrating your
ability to analyse, comment critically on, and make effective use of the data provided. (84 marks)

http://www.aqa.org.uk/qual/gceasa/qp-ms/AQA-EC4W-W-QP-Jan04.pdf

Reply 94

Loai

Please explain to me why the shape of the marginal cost curve is determined by the marginal productivity theory (what is this)? Also why does it intercept the average cost curve at its lowest point?

Appreciate your help a lot!!

Reply 95

ash213

2

sry i didnt mean to ask too many questions just that was the only paper i didnt have a mark scheme for
but thanks for the help wit that question

Reply 96

charikaar

Discuss how the government might use a cost benefit approach to decide upon the best sites for the development of new housing?

i knw that cost benefit apprach, is when you look at the total cost and the total benefit of the project. Also when carrying out any activity, you look at the following factors:

1) Attach a monetary value to each of these costs and benefits

2) Work out the probability of each cost and benefit occuring

3)Take some account of the time horizon involved

4)MAKE A FINAL DECISION ON THE BASIS OF THE FINAL FIGURES.

i dnt get them how can i relate those factors as shown above to my question. can anyone explain all the points to me, (one by one) and also try to relate it to the question so that i knw exactly what goin on.
i would appreciate if anyone could contribute to my matter
Thanks................

Reply 97

Chilly

5

Need help with these!!!!! Could you please answer as many as you can.
Thank you so much!!!!!!!!!!!!!!!!!!!

Discuss whether developing economies should adopt the same path towards development followed by developed economies (15)

Explain the features which distinguish the newly industrialised countries from the low income economies. (10)

How might an economist explain the low levels of productivity found in developing economies? (10)

Discuss the difficulties that governments in developing economies might experience in improving the quality and allocation of resources. (15)

Discuss the possible advantages and disadvantages for a developing country of introducing policies to promote greater self-sufficiency (15)

Discuss the extent to which rural to urban migration promotes economic development (15)

Reply 98

hl2k5

I'm doing Economics as part of my Accounting & Finance degree and need some help with a question as my exam is a few days away. For my exam I need to research an Economy and business of my choice. I decided to do the UK economy and I thought I would choose British Airways or Ford in the UK. An example question from a specimin paper is as follows:

Using an appropriate business example and relevant macro and microeconomic theory examine the consequences for your chosen business of a collapse in prices in the US stock market.

This question is worth 24 marks out of a total of 92. Does anyone have any suggestions on how to answer this question and research a business in this way. Also if there are any other relevant business that can be chosen instead. Any help will be much appreciated.

Reply 99

tanusha-tomsk

OP

18

latin.snake

Please explain to me why the shape of the marginal cost curve is determined by the marginal productivity theory (what is this)? Also why does it intercept the average cost curve at its lowest point?

Appreciate your help a lot!!

Hi!
Marginal Productivity theory is by how much the output will increase if one additional unit of labour is employed. This is how I've been explained this.

There are 4 tractors on the farm (fixed factor of production, typically capital).
The owner employes 1 worker, he produces 10units of output in an hour.
Second worker is employed. It is more fun working and they both produce 12 units. (14 additional units thanks to 1 new worker, 24 in total)
Third worker is employed. Each produces 13 units (15 extra units, 39 in total).
Forth worker, and each produces 14 units (17 extra units, 56 in total).

Ok, so as long there is enough fixed factors per variable factor, productivity rises (10 >> 12 >> 13 >> 14). With one worker, 10 units in 1 hour were produced. With 4 workers, 56 units in 1 hour. That cost of labour is 4 times bigger, the value of output is 5.6 times bigger. So MC of production falls, reaching it's minimum when 4 workers are employed.

Fifth worker is employed. He hasn't got a tractor, so he just distructs the other ones & wastes time as they swap. Each produces 13 units (9 extra units, 65 in total).
Sixth worker, even more time wasted, each produces 12 units (7 extra, 72 in total).

As you can see. since the two new workers were employed (no. 5 and 6) cost of labour is 1.5 times bigger (from 4 to 6), but output is 7/9 times bigger (from 56 to 72). So the cost of producing an extra output (MC) is rising. The MC curve turnes up.

Is that clear? I know, a bit too simplistic, but helped me.

_______________________________

Second part, why does it cut AC at it's minimum. Think about criket, foorball, etc. If a result is lower than the average, average falls. If the result is higher than the average, it rises. Look at the diagram: when MC is below AC, AC falls. If MC is above AC, it rises.

Is that ok?

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