H2 ECONS 2008 CASE STUDY

The whisky industry in India is probably a traditional industry and the Indian govt sees a need to protect jobs in this industry. This will in turn affect their pricing decisions. Holding other factors constant, an increase in price of electricity will result in a significant change in quantity demanded of electricity – Using concept of CED? Level 3 answers are also able to clearly illustrate the pricing setting behavior of a perfect competitive firm in the short run and go on to explain how due to the lack of entry barriers, that the relative ease of entry and exit of new firms led to a situation of only normal profits in the long run. Lower prices are not reflected by lower costs of production, but due to deliberate government policy. Answer should be based on the context of the case material as far as possible.

CSQ2 a i It appreciated. Cost of producing shoes in China, 2. Extent of increase in demand for electricity due to price changes identified in case material is likely to be greater in long term as electricity consumers may be tied to contracts and unable to respond to price changes. As for other ‘real’ intra-industry trade, differences in characteristics and tastes can explain it in other words, demand as well as supply. Q4 Discuss the most appropriate policies that a government could adopt to encourage both actual and potential economic growth.

Answers to H2 Economics GCE a Level Exam

Thus, the protection measure by India is not economically justified. Protectionism is justified in terms of economic theory. This will in turn affect their pricing decisions. Road congestion resulting in negative externalities due to imperfect information; OR smoking – Eg.

UK government took steps to privatise the energy market.

GCE A Level H2 Economics – Paper 1 解题方式_百度文库

To score Level 3, answers should consider the behavior of Oligopoly versus other types of market structures. Extent of increase in demand for electricity is also related to absolute price differentials. Disadvantages of globalisation growing doubts is well founded – increase import competition? This means that the opportunity cost of downloading a file in terms of time saved will be huge.

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Dumping usually occurs to drive domestic producers out of the market in order to establish monopoly power in the future. Level 3 answers are also able to clearly illustrate the pricing setting behavior of a perfect.

h2 econs 2008 case study

Singapore’s stidy of trade can also be examined geographically: Industry may be dynamically n2 due to the abilities of firms to make long run supernormal profits. This shows significant intervention by Chinas central bank to sell the yuan in the process acquire foreign reserves in order to keep the yuan undervalued, thus suggesting that Chinas govt is a currency manipulator.

This weakens the effectiveness of FP as a DD management tool. Meanwhile a country more like Singapore in factor endowments of skilled ecos and sophisticated capital, in Western Europe or North America, may be a much more significant rich customer. Downloads, PC, hard drive. Body There is a need to contrast between a market structure with strong barriers to entry versus one with low or no barriers to entry and how they affect prices.

Body 1 Multiplier – Explain the multiplier process Show how a change in autonomous expenditure will lead to a multiple change in equilibrium Y.

h2 econs 2008 case study

The pursuit of profit caze reduces productive inefficiency as firms need to minimise cost to achieve profit maximisation objective. Conclude – Singapore uses a mixture of command-based as well as market-oriented approaches to solve. If China is indeed dumping, then action to prevent dumping will be justified as it protects EU consumers in the LR where by dumping had succeeded in increasing Chinese producer power in the EU market.

Good answers would also consider that firms make decisions not just on price but also casr non-price decisions. Illustrate how market for electricity changes DD shift rightwards holding SS constant price increase – DD for electricity tend to be inelastic long term eckns Extract 2 – SS of electricity also inelastic leading supplier can control price; Extract 1.

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2008 A-Levels H2 Economics Case Study

This represents allocative inefficiency as natural gas is not allocated to the highest bidding market. To stufy Level 3, answers should include diagrams MC, AC curves to show how profit- maximising decisions are made within a range of market structures. This explains why countries like Spore do not rely on traditional FP to pump-prime the economy in a recession although it is used.

Moreover, tightly regulated energy markets in other European countries hinder the attainment of economic efficiency in Europe? This begs the question which you must address of where does the improved current account performance come from and how can policy influence it? Value of CED is relatively large due to the high degree of substitutability between electricity and other fuels?

h2 econs 2008 case study

Explain that BTEs will affect what kind of market structure the industry will be in. Eons causes of low price of Chinese shoes in EU markets: The demand for recorded music will rise DD shifts right by a large extent. Increase foreign reserves must mean that Chinese authorities are selling Yuan increase SS of Yuan in FX market and purchasing foreign exchange increase DD for FX over the years to exert downward pressure on the dtudy of the Yuan.

Lower prices are not reflected by lower costs of production, but due to deliberate government policy.

Answers should try to link to Part a especially in terms of the examples used to ensure consistency and cohesiveness. Extent of increase in demand for electricity due to price changes identified in case material is likely to be greater in long term as electricity consumers may be tied to contracts and unable to respond to price changes.