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AQA Economics Paper 1- Markets and Market Failure (Tuesday 5th June)

Exam thread for AQA Economics paper 1. Use this thread to discuss revision and answers after the exam etc.

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Reply 1
what are people thinking will come up for micro?
Reply 2
Guys watch econplus videos, he gives reliable predictions
is this AS
Reply 4
For those that did the question 1 on banking, for the 25 marker on assessing whether the government should intervene to make the industry more competitive, did you talk about certain policies ie deregulation pros and cons, or just to intervene or not to intervene (leaving to market).
Original post by Shusuff
For those that did the question 1 on banking, for the 25 marker on assessing whether the government hould intervene to make the industry more competitive, did you talk about certain policies ie deregulation pros and cons, or just to intervene or not to intervene (leaving to market).


I was always told not to talk in detail about policy’s if they ask wether or not to intervene so
I mainly gave views for why and why not to and then added a bit about if they were to intervene how they might do it
Original post by Shusuff
For those that did the question 1 on banking, for the 25 marker on assessing whether the government should intervene to make the industry more competitive, did you talk about certain policies ie deregulation pros and cons, or just to intervene or not to intervene (leaving to market).[/QUOT

i did a bit of both. talked about perfect information being socially beneficial as well as benefits and drawbacks of oligopoly
this is just so wrong, higher prices can't signal firms to join the market when there is an oligopoly....
For the part B externalities air pollution question could pollution permits count as regulation?
Reply 9
For the banking question, I did three paragraphs.
First is pros and cons of splitting the Big Four into smaller banks. The good side being lower prices but bad side being not enough profit for reinventing so dynamic inefficiency.
Second paragraph I discussed about deregulation of the banking sector to increase contestability and evaluation of possible aggressive reaction from incumbent banks (predatory pricing) and also the systematic risk.
Third paragraph is about market force and technological improvements which lead to creative destruction so no govt intervention needed.
My conclusion is quite weak as I ran out of time so I just concluded that govt intervention is needed but market forces are also needed to minimise the risk of government and market failure.

What do you guys think I could score? Feeling like I went a bit off topic cus I didn’t talk much about whether or not government should intervene
I found that hard:

I did the banking essay/oligopoly:
1- Defo didn't get the ratio question, I didn't even put it in a ratio I just got 38.6 or something like that
2- I didn't understand how to show normal profit in a oligopoly diagram and just drew a monopoly one
3- I shoved everything in the 25 marker, talked about how the market provides competition itself by backing up with extract A, then talked about diseconomies of scale, lack of efficiency, x-inefficiency, then shoved in collusion, cartel agreements and price rigidity

Essay 2
Did the market failure
1- I used negative externalities in production due to profit incentive and negative externality in consumption due to info failure
2- 25 marker didn't even talk about pollution permits or property rights just did regulation and taxation.

I shegged it

Spoiler

(edited 6 years ago)
Reply 11
I did two paragraphs on government intervention and one on market forces so the weighing is like 2:1 (or 3:1 even), and I didn’t compare and evaluate the two. So really worried about how it would score.
Original post by hey8023
For the banking question, I did three paragraphs.
First is pros and cons of splitting the Big Four into smaller banks. The good side being lower prices but bad side being not enough profit for reinventing so dynamic inefficiency.
Second paragraph I discussed about deregulation of the banking sector to increase contestability and evaluation of possible aggressive reaction from incumbent banks (predatory pricing) and also the systematic risk.
Third paragraph is about market force and technological improvements which lead to creative destruction so no govt intervention needed.
My conclusion is quite weak as I ran out of time so I just concluded that govt intervention is needed but market forces are also needed to minimise the risk of government and market failure.

What do you guys think I could score? Feeling like I went a bit off topic cus I didn’t talk much about whether or not government should intervene


Thank the Lord!

I thought I was the only person who mentioned that incumbent firms will predatory price to eliminate or deter new entrants
Reply 13
I did banking. Monopoly vs free market Efficiency argument. Then economies of scale and types of intervention. Overall some dynamic efficiency need to ensure investment into safety measures to prevent hacking. Also large ability to change firms in 2016 ensure reducing market share so overall minimal further intervention needed
Original post by Tasting the jiz
Thank the Lord!

I thought I was the only person who mentioned that incumbent firms will predatory price to eliminate or deter new entrants


would an valid point in terms of contestability; threat of incoming firms means firms are likely to price closer to the alloc efficient point and thus increase consumer welfare?
Nah
(edited 6 years ago)
Reply 16
Hi I know what you mean, but you've worded it differently. It is the supernormal profits that act as the signal to potential new entrants to the market. There may be a high price, but can result in normal profit, which wouldn't lead to the signal effect. 'high' price is a fairly normative statement, so using the idea of SNP as the signal would be easier to understand.
(edited 6 years ago)
Reply 17
how did u guys answer the 9 marker on banking which diagram ?
Reply 18
anyone do ESSAY 3 aqa economics
Reply 19
I reckon you'll get about 16-18 given all your points were valid, and clear logical chains of reasoning and linked explicitly back to the question. but you had to have discussed regulation relating to resolving the MF. I'm sure you've done well, obvisously we're all prone to making some mistakes :smile:

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