H2 ECONS 2008 CASE STUDY

Consider the impact on associated products eg. It is very important to show that capital account policies have eventual current account consequences. Creation of Energywatch to represent the interest of consumers also limits the ability of energy firms to monopoly price, hence improving allocative efficiency. Answers should try to link to Part a especially in terms of the examples used to ensure consistency and cohesiveness. Assess how the markets involved might be affected by these developments. Q2 Firms pricing and output decisions depend on barriers to entry and the behavior of competitors a Explain why barriers to entry are a key determinant in firms pricing decisions. Besides casing BOP problems for USA and countries in the EU, rising value of imports which exceed exports will cause rising unemployment in these countries structural unemployment.

As such, the switch to electricity will only occur o if the changes in electricity and natural gas prices result in significant absolute price differentials o the price differential is expected to be persist o consumer durables and capital goods using electricity are competitively priced e Discuss whether the market for fuel in the UK displays economic efficiency or whether it provides an example of a market failure. A Level – Paper Good answers would have discussed some of these constraints and limitations in the main body and may reiterate and reinforce the case they are making by focusing on at least 2 economies to round up the discussion. Students should understand that the behavior of firms largely depends on the type of market structure that they fall under. Students should be able to identify that imperfect information and immobility of factors of production are sources of market failure.

Road congestion resulting in negative externalities due to imperfect information; OR smoking – Eg.

H2 Economics Case Study Questions

No – The high and rising consumption of M as seen in the table is not just due to unfair trade practices in the global arena, it is also due to loose lending policies in the US. Inasmuch as they buy for example high tech consumer electronics, they may indeed buy them from us, but they may simply not buy many in the first place, as a result of their poverty. Students will have to consider the impact on two markets ie recorded music and associated products. Approach Part a is a rather straightforward question that simply needed a standard application of the content, whereas b required the student to assess the appropriateness of theory to real life.

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The inefficiency of this system was revealed starkly at independence. Q3 a Explain why imperfect information and immobility of factors of production may lead to market.

Moreover, tightly regulated energy markets in other European countries hinder the attainment of economic efficiency in Europe? Hence a fall in prices of iPods, MP3 players will increase the DD for recorded music since they are close complements. Q2 Firms pricing and output decisions depend on barriers to entry and the behavior of competitors a Explain why barriers to entry are a key determinant in firms pricing decisions.

h2 econs 2008 case study

Besides casing BOP problems for USA and countries in the EU, rising value of imports which exceed exports will cause rising unemployment in these countries structural unemployment. The aim is to prevent the whisky industry from collapsing last line of extract 6.

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 value of the Yuan. Constantly aim to raise value added to stay ahead of other countries who like say Vietnam are in turn building CA in areas where we once had CA.

Answers to H2 Economics 2008 GCE a Level Exam

Creation of Office of Gas and Electricity Markets Ofgem helps to increase competition in the energy market. As such, the switch to electricity will only occur o if the changes in electricity and natural gas prices result in significant absolute price 200 o the price differential is expected to be persist o consumer durables and capital goods using electricity are competitively priced e Discuss whether the market for fuel in the UK studh economic efficiency or whether it provides an example of a market failure.

The whisky industry in India is probably a traditional industry and the Indian govt sees a need to protect jobs in this industry.

h2 econs 2008 case study

Not a case of dumping. Downloads, PC, hard drive. This is inline with market forces where excess DD for yuan due to trade surplus creates upward pressure on the forex rate of yuan. Q4 Discuss the most appropriate policies that a government could adopt to encourage both actual and potential economic growth. Hence, it is likely that the demand for electricity has increased despite an increase in its own price as households and firms will be substituting natural gas with electricity due to the greater increase in price of natural gas compared to electricity.

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Impact of developments in modern technology on recorded music and associated products will depend on the relationship whether substitutes or complements ie direction of DD changes and their closeness the extent of DD shift.

In such cases we do not import and export identical goods; we import and re-export what we really export is the services of the PSA!

h2 econs 2008 case study

Develop CA in areas of acse value added to tap into growing world incomes and to avoid goods such as those primary products exported by many developing countries where prices are volatile. For answers that are very descriptive and only able to show the link between barriers to entry and pricing decisions, it will at most score a Level 2 mark.

Answers to H2 Economics GCE a Level Exam

Answers to Exam December … Documents. Overall trend is one of increasing natural gas and electricity prices – Difference 1m? Introduction – Link the examples to be used respectively to the causes of market failure – Eg.

Do not suggest that the exchange rate caused tsudy BOP to strengthen. For example, there may be many African countries whose CA differs from ours dramatically but who are not major customers; this is because they are poor. Based on table 3, it is observed that Chinas BOT improved between and However, the appreciation is very marginal.

If price of natural gas remains below price of electricity, natural gas consumers may not switch to electricity. Thus, the protection measure by India is not economically justified. Explain that there is a range of market structures. In curing a recession, to what extent can a rise in G offset the fall in CD in big economies like US and the fall in X in extremely small and open economies like Spore?