OCR F581 Markets in Action - 11 May 2015

Yes. You should refer to what the scarce resource is though (ie land).

I used water instead.

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For the Consumer surplus i shifted S outwards instead of Inwards, 0 Marks?

On the 2nd questuion after drawing the diagram what you guys wrote?
I probably messed up, just stated the shifts and how both shift would lead to significant price increase.
HELP

if you drew producer surplus instead of consumer will you get 0/6

Ok for the 18 marker i think i might of ****ed up. Instead of talking about underconsumption i talked about( using the example of trains/cars) that subsidising a merit good like trains would cause price to fall increasing the demand for them, therefore the demand for the subistute demeirt good would fall. As anaylsis i said it depends on how good the subisitute is, e.g trains are considered an inferior good so people are still unlikrly to switch and that it also depends on if the producers pass the subisdy on to the consumera in the form of lower prices.

Is this still going to get me some marks?

one more thing, were both surplus questions on consumer surplus, definition and diagram? im really stressed out, as im sure i've read both as producer... how is that even possible, i was really focused

Almost everyone was rushing the essay towards the end, OCR were not nice regarding time this year

On the 2nd questuion after drawing the diagram what you guys wrote?
I probably messed up, just stated the shifts and how both shift would lead to significant price increase.
HELP

It was a 6 mark question and I think normally 3-4 marks are gained just from the diagram. I shifted the supply curve only, then wrote that this could be due to farmers switching to biofuel instead of producing alternative agricultural goods which would reduce supply, therefore decreasing quantity from Q to Q1 and increasing price from P to P1 (as shown on my diagram). The extent to which price increased would be subject to price elasticity of supply, the size of the shift and could be increased by an increase in demand or offset by a decrease in demand.
That was probably slightly excessive though for a 6 mark including a diagram, I just had some time to kill

Im worried because on the consumer surplus questions I didn't draw supply on it or even shifting left I just drew the price rise!! What will happen?

Which positive externalities did you get from the case study?

The diagram is worth 4 marks. Then 2 for explanation.

The L4 commentary you added was unnecessary here to be honest, but doesn't hurt anyone :P

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I did