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    Can someone explain how consumer welafre is lost, when the negative externality caused by MSC minus MPC is removed.

    Is it because Supply curve shifts to the left?
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    Economic integration means a deepening of economic relationships between member nations. There are five stages of economic integration:
    (i) Free Trade Area
    (ii) Customs Union
    (iii) Single Market
    (iv) Monetary Union
    (v) Economic Union

    Do we need to know all about this in detail?? Is economic integration an important topic to revise for this exam, or should it just need to be mentioned?
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    i don't think i would use the kinked demand curve
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    (Original post by Veni_vidi)
    i don't think i would use the kinked demand curve
    Thats what i was just thinking now that i focus more on it in detail, i just don't know when i would apply it...unless the question is about oligopolies maybe?
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    What's brain drain?
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    (Original post by Inflation)
    What's brain drain?
    The migration of skilled, educated workers across international boundaries leading to a shortage of skilled labour in the economy. Particularly applicable to developing economies.

    The economy is losing its human capital, representing a fall in productive capacity.
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    (Original post by bbc_18)
    Thats what i was just thinking now that i focus more on it in detail, i just don't know when i would apply it...unless the question is about oligopolies maybe?
    Basically if your essay raised the question of: Why do oligopolies not compete on the basis of price? Then your answer would be: because they face a kinked demand curve.
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    (Original post by Berto90)
    The migration of skilled, educated workers across international boundaries leading to a shortage of skilled labour in the economy. Particularly applicable to developing economies.

    The economy is losing its human capital, representing a fall in productive capacity.
    So in this context. This could be people going from Poland/CEE countires to UK due to free trade?
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    (Original post by Alfchick60)
    can anyone explain to me the differences between positive and negative integration with regards to economic and monetary union?
    thanks
    positive integration:
    is when the social policies of member states are coordinated, so they basically agree on the laws and regulations and any other policy that are similar.

    negative integration:
    this is when barriers are removed that would restrict the free movement of goods and production factors between member states. e.g. quotas/tariffs/tax/govt subsidies ..

    economic union aims to harmonise economic polices, so this would involve positive intergration.

    monetary union is when member states harmonise macroeconomic policies such as exchange rate, member states share a single currency and reduces uncertainty of exchange rate, this increases trade and competition between member states, there are positive and negative intergration involved in monetary union.
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    (Original post by Veni_vidi)
    positive integration:
    is when the social polocies of member states are coordinated, so they basically agree on the laws and regulations and any other policy that are similar.

    negative integration:
    this is when barriers are removed that would restrict the free movement of goods and production factors between member states. e.g. quotas/tariffs/tax/govt subsidies ect

    economic union aims to harmonise economic polices, so this would involve positive intergration.

    monetary union is when member states harmonise macroeconomic policies such as exchange rate, member states share a single currency and reduces uncertainty of exchange rate, this increases trade and competition between member states, there are positive and negative intergration involved in monetary union.
    thanks
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    (Original post by Inflation)
    So in this context. This could be people going from Poland/CEE countires to UK due to free trade?
    Yes, that example would be accurate. Poland could be said to be currently experiencing the 'brain drain'.

    I wouldn't say its down to 'free trade' as such, more the reduction in the barriers to the movement of labour across borders (increased integration basically). Trade implies the movement of a good or service.
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    (Original post by Inflation)
    So in this context. This could be people going from Poland/CEE countires to UK due to free trade?
    Hi, yeah basically because there's free movement of labour within the EU, polish people may come to the UK as they know there's a higher standard of living, opportunities etc. And often these may be the smartest people who can't go far enough within Poland. That's the brain drain theory; the smartest people leaving the country.
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    So that is a reason for tax haromnisation I guess? To stop this happening?
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    (Original post by boyz123)
    Funny joke !!

    I have a question regarding about car price differentials .
    If the prices vary so much between countries , what is stopping consumers searching for the best deal and purchasing cars from dealers in cheaper countries? And how can i get evaluation mark in this question ??
    I just thought of one reason which is the imperfect information about the car price .
    Thanks
    u could also mention that due to increased income there is a less incentive for consumers to so called 'bargain hunt' thus pressurisiing firms less on reducing the price differences. there are many others that have been mentioned but yea these kinda questions can come up.
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    Also outside UK its left hand drive
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    (Original post by Inflation)
    So that is a reason for tax haromnisation I guess? To stop this happening?
    pretty much, also to decrease tax competition as some countries make their tax low in order to attract FDI or foreigners opening their accounts there, whereas other countries have a relatively high tax and experience the opposite.
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    k this is getting last minute cramming now!!!! but was looking through the tutor2u kit and I don't fully understand this -

    it says manufacturers may collaborate or commence joint ventures in for example developing a new car platform. It says the cost and risk of developing a new car platform is big....understand that........but then it says it provides little potential for competitive advantage....

    surely if a manufacturer successfully develops a new car platform, they would definitely have a competitive advantage over their rivals?????

    anyone?!?!?
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    On a tax diagram, im getting confused....is it only demand curve that moves to the left, or does supply move aswell?
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    only supply!!
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    (Original post by matz92)
    k this is getting last minute cramming now!!!! but was looking through the tutor2u kit and I don't fully understand this -

    it says manufacturers may collaborate or commence joint ventures in for example developing a new car platform. It says the cost and risk of developing a new car platform is big....understand that........but then it says it provides little potential for competitive advantage....

    surely if a manufacturer successfully develops a new car platform, they would definitely have a competitive advantage over their rivals?????

    anyone?!?!?
    Its clearly badly worded, I didn't know what it was getting at. I'm GUESSING it might mean that the costs of R&D will not be fully repaid? As in, the costs for developing a new car platform are high, put the potential gain in comparitive advantage is low since competitors could use the same technology once its developed? Some kind of free-rider thing?
 
 
 

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