I'm having to drag up my GCSE knowledge here...but I think absolute advantage would be where France say can make coats much cheaper than england, and england can make handbags much cheaper then france. Thus, we both have absolute advantage in these goods repsectivly - so England only produces handbags and France only produces coats and we trade.

Reply 323

pedy1986

What do regulations do to the D/S diagram :confused:

Reply 324

john !!

corey

Specialisation of labour requiring an exchange medium (to trade). :cool:

corey

What do regulations do to the D/S diagram :confused:

Depends on the relugation I guess...

Reply 325

TheWolf

corey

What do regulations do to the D/S diagram :confused:

leftward shift of supply, hmm i know that one of the supply side policies is deregulation, and that causes a rightward shift of lras, but depends what you mean - regulations as a government policy to reduce pollution? i would do another one

Reply 326

pedy1986

mik1a

Specialisation of labour requiring an exchange medium (to trade). :cool:

Depends on the relugation I guess...

Hmm..I have list saying the effects of regulations on the D/S diagram...I think it means such as tighter controls and 'red tape' etc....but how does that effect D/S? Shift supply left?

oooo...specialisation of labour! I think that it might come up 2moro...or an inter relationship between markets question!

Reply 327

TheWolf

corey

oooo...specialisation of labour! I think that it might come up 2moro...or an inter relationship between markets question!

lets hope so, easy demand and supply graphs are always good :smile:

Reply 328

pedy1986

TheWolf

lets hope so, easy demand and supply graphs are always good :smile:

Well, it hasn't been on for years! (I think).

I was just thinking...is demand pull inflation self correcting?

Reply 329

TheWolf

corey

Well, it hasn't been on for years! (I think).

I was just thinking...is demand pull inflation self correcting?

increase of demand, means more monetary incentives for workers to sustain the high demand, which puts on to the price hence inflation....mmmm how is it self correcting?

Reply 330

pedy1986

TheWolf

increase of demand, means more monetary incentives for workers to sustain the high demand, which puts on to the price hence inflation....mmmm how is it self correcting?

High AD means that demand causes a price rise...therefore movement along SRAS - and price serves as a incentive for more firms to enter the market...causing SRAS to shift right...thus lower price again... :confused:

Reply 331

Ellie4

corey

I suppose it's self correcting where there a few/no barriers to entry in which case.

Reply 332

TheWolf

corey

nah i wont bother saying that mself, this reminds me of the perfect market, where when a firm gets supernormal profits, this encourages firms to come in, and in the end they all get normal profits...but i wouldnt say that for other markets..

Reply 333

Ellie4

deianra

Ellie, we just call it plain old AD/AS, yes?

None of this SR/LR stuff? I have it on some of my notes, but only like 2 pages? :confused:

Yeah don't worry about these AQA silly peeps, they don't even have to learn absolute and comparative advantage til next year! :rolleyes:

Reply 334

pedy1986

Ellie4

Yeah don't worry about these AQA silly peeps, they don't even have to learn absolute and comparative advantage til next year! :rolleyes:

Ah, but we had to learn absoulte advantage at GCSE so :tongue:

Reply 335

Ellie4

corey

Ah, but we had to learn absoulte advantage at GCSE so :tongue:

Go away!

Reply 336

john !!

Well demand pull inflation is from the Keynesian school of thought, because monetarists believe inflation only comes from the money supply. So to use a monetarist diagram to analyse it might give you problems?! lol...

However, A rise in AD, causing a positive output gap due to extension in SRAS is unsustainable, workers charge higher wages and SRAS falls back to the long run trend rate. It is self correcting because demand-side inflation is short term.

Reply 337

TheWolf

deianra

Heh, though to be honest comparative + absolute advantage is possibly the easiest thing ever. Although, I did help out a potential PPEist doing A2s with comparative advantage!

:biggrin: