Economics P12 june 2012 ANSWERS...!!!

[Utsav Karkee]

i meant the government would consider it bt not the firms... firms will only be bothered about the cost that has incurred to them and the revenue they might earn by selling the product... firms don't give a shit abt consumers' surplus.. but the government will be concerned about consumers' welfare so they take consumers' surplus into account...

government + firm = gau ko farm. all the above shit is nonsense!

 

[Mattman]

For the PPC question i chose A as the answer. Arguments stated by people who chose A and those who chose C are both good. The answer could be A if one considers whats going to happen in the long run. For example if innovation decreases to zero and you have a machine, after a period of say 10 years the machine is going to become redundant. Considering that fact that there is no technological advancement, the production possibilities are bound to decrease. Rise in the price of energy means that the COP is going to rise but that does not mean that production possibilities are going to decrease. True oil importing firms may reduce output but the production possibilities will remain the same. So this is what i think. Obviously this is open to discussion.

Lots of "debatable" questions tbh this paper.. I hope the threshold is low;..

 

[ibadsiddiqi]

Lots of "debatable" questions tbh this paper.. I hope the threshold is low

I think it will be 22 max.

 

[Mattman]

I think it will be 22 max.

Definitely Ill pray for that..confirm i got like 2 wrong for careless mistakes, plus the questions weve discussed about, could get wrong there as well..

 

[ibadsiddiqi]

Definitely Ill pray for that..confirm i got like 2 wrong for careless mistakes, plus the questions weve discussed about, could get wrong there as well..

so what do you think about my PPC theory?..

 

[Mattman]

so what do you think about my PPC theory?..

reduction/depletion in supply of energy can also cause price rise, which also causes ppc to shrink

but your theory can be plausible as well but what do u mean by redundant?

 

[ibadsiddiqi]

I mean its no longer used. the word actually means when u are fired from a job means you have been made redundant. In this context i mean that the machine is now obsolete. It can not be used or it cannot function to its full potential. So the production capacity of the machine is going to decrease. In the energy one you'll be assuming that the cause of the rise in price is the depletion of resources. It can be due to other factors as well. For example oil prices rise and fall. True its going to run out one day but right now you have supply but the rise and fall in price is due to a rise and fall in demand

 

[Agassi Cazaubon]

I mean its no longer used. the word actually means when u are fired from a job means you have been made redundant. In this context i mean that the machine is now obsolete. It can not be used or it cannot function to its full potential. So the production capacity of the machine is going to decrease. In the energy one you'll be assuming that the cause of the rise in price is the depletion of resources. It can be due to other factors as well. For example oil prices rise and fall. True its going to run out one day but right now you have supply but the rise and fall in price is due to a rise and fall in demand

lol but it's not like there aren't any more of the same machine available for purchase.. there still would be. This would have happened with or without a decrease in innovation if firms didn't get new machines or maintain existing ones.. even then what this would do is cause production to be inside the PPC and not shrink the curve :/ I think this link explains the question:
http://www.harpercollege.edu/mhealy/eco212i/lectures/econgrow/econgrow.htm

Oh and it's very unlikely that the GT will be 22, maybe 23 or 24.. but 22 that's pushing it lol

 

[Saad Ghori]

exactly..and furthermore people don't usually use credit cards to pay a plumber or a carpenter or a gardener..

Exactly

 

[Vinita Manek]

cost benefit analysis...answer ws consumer surplus and d range for XED was 1.66 to 2

 

[aamir9010]

Hey guys lets stop wasting time on the old paper and concentrate on paper 2. Whatever CIE does we cannot change it no. Then lets try to get a better grade for the next papers>

 

[Mattman]

What was the awnser to the question "What is true for tariffs and quotas"?

I awnsered Tariffs shift the supply curve and quotas dont affect the demand curve, so its A.
Quotas dont always benefit the importer so B is wrong

 

[mhalvi]

What was the awnser to the question "What is true for tariffs and quotas"?

I awnsered Tariffs shift the supply curve and quotas dont affect the demand curve, so its A.
Quotas dont always benefit the importer so B is wrong

plz dont try to impose yur answers...
Quotas always benefit the importer,you can check any book.I can even give u explanation but books r the best teacher

 

[Hassi123]

plz dont try to impose yur answers...
Quotas always benefit the importer,you can check any book.I can even give u explanation but books r the best teacher

can you please explain? because i read it somewhere thaat quota can cause retaliation from home producers and they will end up putting trade barriers back on them, so both countries end up suffering. Also because of quota some consumers would be left out, they wouldnt get the product and that could lower their standard of living? quota will ALWAYS benefit the importers BOP but i dont think it will ALWAYS benefit the country in general.
Im not sure though, this is what i think? please explain it to me.

 

[Mattman]

I meant quotas dont benefit the import PRODUCERS. sorry.

 

[Hassi123]

I meant quotas dont benefit the import PRODUCERS. sorry.

i think none of the trade restrictions benefit import producers ?

 

[Mattman]

i think none of the trade restrictions benefit import producers ?

Yeah they dont, or at least not always, so A seems the better awnser(tariffs affect the supply curve and quotas DONT affect the demand curve)
instead of B(tariffs increase govt revenue and quotas benefit import producers)
just my opinion, asking if people awnsered the same thing.

 

[mhalvi]

please refer to Collin Bamford pg.84 ..u'll get to know it...

 

[mr.ives_94]

a decrease in innovation means that a country will have lesser new, more efficient capital for the future... if the same level of innovation had been sustained the level of production would not have decreased leaving the PPF intact.. but since the question said "decrease in innovation" the country will have less of more efficient capital in the long run thus causing the PPF to shift inwards... i asked my teacher abt this question and he said the answer was A... and he is an examiner.. so yea..

Perfect, I knew it was innovation even my teacher said the same but literally the entire class chose unemployment so they made me doubt meself xD You prepared for P2 tho?

 

[JuggyD]

dude, it WAS C cox how can an "innovation" decrease leading to lower output? :S when something once has been invented, u cant just go back on the technology....the RATE of innovation can decrease but innovation itself cannot.
for example a country finds out a new method of extracting oil....it increases its PPC to the right....now in the future it can not just FORGET the technology which has already been invented and go back to producing less output.

It isn't about forgetting, some innovation may be dropped if it isn't considered safe, renewable or sustainable. An example would nuclear power, countries are moving away from it even though it has the greatest output of power relative to other resources given the same mass of raw materials (1kg of coal vs 1kg of uranium), isn't safe in the eyes of the policy makers. This is a step back in innovation and we would require more scarce resources to meet the same power output, hence an inward shift in the PPC.