OCR F581 Markets in Action - 11 May 2015

Original post by *Stefan*

Yes.

Preferably, indicate the change in the surplus by phrases like "Existing consumer surplus" (point A) - "additional consumer surplus (point B)".

Guys, gotta go in a bit. If you need last-minute help with anything, now's the time!

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I noticed in mark schemes sometimes for surplus diagrams, they just shade the region of for instance 'loss consumer surplus' and thats it, but sometimes in the mark scheme it says to label additional, original etc.

Also how do we explain alocative effeciency, for instance in TP, when supply shifts to the left(market diagram) do we saw q2-q1 so allocative effeciency achieved

Reply 1303

Original post by Yousf

I noticed in mark schemes sometimes for surplus diagrams, they just shade the region of for instance 'loss consumer surplus' and thats it, but sometimes in the mark scheme it says to label additional, original etc.

Also how do we explain alocative effeciency, for instance in TP, when supply shifts to the left(market diagram) do we saw q2-q1 so allocative effeciency achieved

The more explicit you are, the better. I'd use all three possible ways - shading, letters and phrases.

I believe I explained this a few pages ago. Check it out!

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Reply 1304

anorris13

2

Original post by jegro

guarantee you tradeable permits wont come up
last year the 18 marker was about negative externalities on production
they wouldnt suit the theme of production 2 years in a row

What instead then?

Reply 1305

Original post by anorris13

What instead then?

Do not listen. Revise all topics equally!!!

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Reply 1306

Original post by zzzzzz123456

Nah demand would as it would be more people wanting to buy the good, not more people wanting to sell it

I think your incorrect. For negative externalities for instance, regulations would raise cost of production, supply shifts and demand contracts. Only if the their are regulations on demerit goods, then demand would shift

Reply 1307

Tedarien

1

Original post by *Stefan*

Yes -it doesn't have to shift to the left though. If it's about regulations being relaxed, the supply curve should shift to the right.

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Could you also argue that the demand curve also shifts to the right?

If something is made legal, more people are going to be doing/using it.

Reply 1308

nikkiiiiii

5

Original post by jegro

guarantee you tradeable permits wont come up
last year the 18 marker was about negative externalities on production
they wouldnt suit the theme of production 2 years in a row

How do you know this!?

Reply 1309

Original post by *Stefan*

The more explicit you are, the better. I'd use all three possible ways - shading, letters and phrases.

I believe I explained this a few pages ago. Check it out!

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For regulations, does demand curve shift for merit/demerit goods, and for
positive/negative externaliies, the supply curve shifts, right?

Reply 1310

c223

2

Original post by Becky_boo84

Yeah that's fine. Examiners won't look at it and highlighters don't show up when the paper is scanned in anyway

Thank you!

Reply 1311

Pato1

Original post by anorris13

What instead then?

Regulation or Subsidy IMO

Reply 1312

zzzzzz123456

Original post by Yousf

I think your incorrect. For negative externalities for instance, regulations would raise cost of production, supply shifts and demand contracts. Only if the their are regulations on demerit goods, then demand would shift

yeah thats true... but didnt you ask about information provision? thats not a regulation... thats the government handing out leaflets and running adverts

Reply 1313

jegro

F581 June 2014 paper

F581-01 Jun14.pdf160.4KB

Reply 1314

Original post by zzzzzz123456

yeah thats true... but didnt you ask about information provision? thats not a regulation... thats the government handing out leaflets and running adverts

Nope, where you not talking about regulations o.o

Reply 1315

Original post by Tedarien

Could you also argue that the demand curve also shifts to the right?

If something is made legal, more people are going to be doing/using it.

Don't make this mistake: it depends on what the regulations focus on.

If it's lowering the legal age of alcohol consumption, then demand for alcohol would be expected to increase.

If, however, it was about more materials being allowed for production, supply would be expected to increase.

Always relate the answer back to the case.

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Reply 1316

Original post by Yousf

For regulations, does demand curve shift for merit/demerit goods, and for
positive/negative externaliies, the supply curve shifts, right?

A merit good is one which has positive externalities, whilst a demerit good negative externalities. Don't make the distinction so absolute.

It's easy to know whom the regulation is intended for: if it's about the supply of a product/its producers, it'll be the supply curve. If it is about the demand of a product/consumers, it'll be the demand curve. Just try to understand whom the regulation will have an effect on.

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(edited 8 years ago)

Reply 1317

atimsa

10

Original post by jegro

guarantee you tradeable permits wont come up
last year the 18 marker was about negative externalities on production
they wouldnt suit the theme of production 2 years in a row

what do you think will come up ?

Reply 1318

Original post by *Stefan*

A merit good is one which has positive externalities, whilst a demerit good negative externalities. Don't make the distinction so absolute.

It's easy to know whom the regulation is intended for: if it's about the supply of a product/its producers, it'll be the supply curve. If it is about the demand of a product/consumers, it'll be the demand curve. Just try to understand whom the regulation will have an effect on.

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Ok, thanks for your help!, one more thing, does information provision NORMALLY affect the demand curve?

Reply 1319