IGCSE/GCSE/O & A Level/IB/University Student Forum
Qualification => Reference Material => GCE AS & A2 Level => Revison Notes => Topic started by: Freaked12 on May 29, 2010, 08:26:24 pm
-
All thanks to my economics teacher,wikipedia and Student forum obviously
I would definetly not mind if you point out mistakes,i would be greatful if you do.
-
I have terms of trade
and demand and supply notes as well (Cross elsticity and income elasticity etc)
if anyone wants
-
heya i do need
do u have BOP too ??
n Thanks a lot 4 this :D :D
-
heya i do need
do u have BOP too ??
n Thanks a lot 4 this :D :D
You mean Balance of payments.
its not specifically a topic but you can give me Questions from past papers (01 to 08).
I did all of them and i had them checked by a former examiner.
-
hey u have solved paper
could u plz put up 1 or 2 here cuz i really dont know how to go about an answer
i want to know its structure
yeah balance of payment
-
hey u have solved paper
could u plz put up 1 or 2 here cuz i really dont know how to go about an answer
i want to know its structure
yeah balance of payment
Can you give me time
I need to scan them
-
oh sure timez all urs
Thanks a loooooootttttttttttt
-
hey guys its bin a long time since i posted these notes......bet have probably now gone out of notice chek it out they are nice :p
https://studentforums.biz/index.php/topic,4076.0.html
-
oh they were urs !! i have downloaded them n loved them
have u changed ur sf name ???
-
oh sure timez all urs
Thanks a loooooootttttttttttt
Scan not working
I have to type it now
Question 2)June 2003 Paper 2
Part A)Explain the functions of price in a market economy(model answer)
Answer)
All economic systems have to answer the four basic questions of what to produce, how much to produce, and for whom to produce and how to produce.In a market economy, this is determined by the price mechanism.In this system,it is assumed that there is a competitive situation situation in each industry.The market is characterised by individual choices on the part of the consumers and producers.Competion is the second main characteristic. Consumers have to compete for products they want and producers have to compete for sales.
In the market,thousands of consumers expressed their demand,which is the desire and ability to pay. Producers express their supply which is the wish and ability to sell their goods.These two forces interact to give price.Price measures opportunity cost, that is, what is given up due to a choice of buying or selling.
The combination and the analysis of demand and supply will give the equilibrium price and quantity.For each good,there is a supply schedule and demand schedule.If two are brought together, we find that the quantity demanded and quantity supplied will be equal at one and only one market price.This is is the equilibrium price which is P and the quantity demanded will be at equilibrium level Q.
(Draw a normal supply and demand curve)
Therefore,the price P tells us what goods and services to produce(using the supply curve) and consume( using the demand curve).
In a market economy only products that can command a price should be produced.Rising prices signals that more should be produced.Falling prices does the reverse. Similar analysis can be applied to the demand and supply of labour.The demand of labour will be downward sloping.This is because at a lower wage rate,employees will demand more units of labour since the cost of labour is cheaper and vice versa.
The supply of labour will be upward sloping.This is because at a higher wage rate,workers will supply more units of labour since wages are higher and the reverse is true for lower wage rate.The price of labour is the wage rate given at W and the equilibrium quantity of labour demanded and supplied is at level N.
(draw a normal demand and supply curve)
There fore prices tells what employment to seek (using the labour demand curve) and what to offer(using the labour supply curve)
Like wise the market for land is brought into equilibrium by changes in its price, that is, rent.For capital,it is price called interest.
-
OMG OMG OMG !!!! :o :o :o :o u wrote all that
thanks a lotttttttttttttttttt !!!!!! :D :D :D :D :D :D :D :D :D :D :D
-
hey guys its bin a long time since i posted these notes......bet have probably now gone out of notice chek it out they are nice :p
https://studentforums.biz/index.php/topic,4076.0.html
I did download them .
They were amazing
Thank You so much
-
OMG OMG OMG !!!! :o :o :o :o u wrote all that
thanks a lotttttttttttttttttt !!!!!! :D :D :D :D :D :D :D :D :D :D :D
Anytime
I will be happy to solve more.Provided they are limited and i get reps (jk ;D)
-
ohhhhhhhhh thnxxxx again !!!
reps yeah i know n u deserve it too :D
-
hey guys its bin a long time since i posted these notes......bet have probably now gone out of notice chek it out they are nice :p
https://studentforums.biz/index.php/topic,4076.0.html
I did download them .
They were amazing
Thank You so much
it would be really kind of u if u could save this file and upload it in a microsoft word 2003 format as i dont have th 2007 package to view it :/
thanks so much, appreciate all the help <3
-
here
in 03 format
-
could some 1 help with this ques
Discuss whether an indirect tax is a satisfactory way to tackle a negative externality, such as
air pollution.
-
could some 1 help with this ques
Discuss whether an indirect tax is a satisfactory way to tackle a negative externality, such as
air pollution.
Past paper question?
-
yeah nov03 q 3b
-
yeah nov03 q 3b
writing
-
oh k Thanks a lot again !!! :D :D
-
thanks soooo much ***exam***!! your a star!!
By the way i have found two documents with the similar type of question that may help you find your way.
-
oh lol why :P
its k i just had 2 press 1 button 2 do that :P
Thanks a them m going through !!
-
Well.
No need of me writing a answer then
or should i?
-
oh if u have not written its k
:)
u see its too much to tell 2 write an whole answer !
n yeah u previous was excellent !!!!!! :) wow Thanks !!
i wish u scanner worked :(
but Thanks anyway
-
oh if u have not written its k
:)
u see its too much to tell 2 write an whole answer !
n yeah u previous was excellent !!!!!! :) wow Thanks !!
i wish u scanner worked :(
but Thanks anyway
Its 2 and a half page
You know 12 marks.
Can i do it tomorrow .?
Like full details etc
-
ooo n here's another one,
By the way freaked12, these are just examples of similar esseys. you should post your answer it would be much clearer and give her a better idea. nyways thanks again you guys for the brilliant help, great job!
-
OMG 2 n half page !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
no no plz dont waste ur time on it
i have never written such long answer in my life except 4 english essay :P
-
@melony :Thanks :D
-
OMG 2 n half page !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
no no plz dont waste ur time on it
i have never written such long answer in my life except 4 english essay :P
with details you know with definations and stuff you wont probably write in exams.
I write them in my answer(when preparing)
yallah i am off.Sleepy
Good night and Take care
-
oh k !! like that i just had the shock of my life 12 marks 2 n half page :o :o :o :D :P
ya k bye
gn
-
@melony :Thanks :D
hey, no problem! u helped me i helped u lol ;)
xx
nite sleep well!, only 6pm here lol :)
-
haha really !!
where r u from
its 3:45 am here :P
-
woow!! jeez u stay up pretty darn late!! :o im from ontario, CA :) wbu?
-
to be more specific im from a lil town in Toronto called scarborough :)
how about u?
-
oh me from india
mumbai to be specific :P
yeah i like being up late :P
-
haha really !!
where r u from
its 3:45 am here :P
hey there is this question of Balance of payment and i have the answer (Question 4(a) June 2005 paper 2
a)BOP can be defined as a summarized account of economic transactions between one country and the rest of the world over a period of time,usually a year.It records the total debt and credit of a particular country for a year.
transactions involve the principle of money in (credit) and money out(debit), which involves the import and export of goods and services or simply double entry records.The BOP therefore shows the total payments and total recipts of a particular country as a result of international trading.
-Structure of BOP-
1Current Account
Export and import of goods
2-Service transactions
------
Current balance
-------
2-Capital account
Long term capital movements
a)private
b)official
Capital account balance
3-Balancing Item
1+2+3-BOP
The BOP claimed on residents,institutions or the government of the country by residents,institutions or the governement by resident,institutions or governments of other countries.
Examples of debit items include
Import of goods
Use of foreign services
capital outflow
The BOP has two columns the debit side and the credit side
A debit item would meanthat there will be money flowing outof the country
A credit item is to the country's advantage because it will mean higher national income for the country as there is money flowing into the economy
-
hey there is this question of Balance of payment and i have the answer (Question 4(a) June 2005 paper 2
a)BOP can be defined as a summarized account of economic transactions between one country and the rest of the world over a period of time,usually a year.It records the total debt and credit of a particular country for a year.
transactions involve the principle of money in (credit) and money out(debit), which involves the import and export of goods and services or simply double entry records.The BOP therefore shows the total payments and total recipts of a particular country as a result of international trading.
-Structure of BOP-
1Current Account
i)Export and import of goods
ii)-Service transactions
Current balance
2-Capital account
Long term capital movements
a)private
b)official
Capital account balance
3-Balancing Item
1+2+3-BOP
The BOP claimed on residents,institutions or the government of the country by residents,institutions or the governement by resident,institutions or governments of other countries.
Examples of debit items include
Import of goods
Use of foreign services
capital outflow
The BOP has two columns the debit side and the credit side
A debit item would meanthat there will be money flowing outof the country
A credit item is to the country's advantage because it will mean higher national income for the country as there is money flowing into the economy
-
ah perfect !!! Thanks a lotttttttttttttttttttttttttttttttttt again !!!! :D :D
-
ah perfect !!! Thanks a lotttttttttttttttttttttttttttttttttt again !!!! :D :D
hope it helped.Now i am really going fer sleep
-
oh ya u helped a lotttttttttttt today :D :D :D :D :D
k bye
-
hey examm soz coudnt swing u in a reply yea dey were my notes.............:P ur welcome...... ;D ;D ;D
-
oh thats gr8 then i just 4 got :-[ gr8 1z i study from it a lot :D
r u the 1 who put up business notes too . cuz i dont remember that too :P
-
Discuss whether a country experiencing inflation will always have a balance of payments
problem. (12)
can anyone help me with this question please. its from w06/p2
-
Discuss whether a country experiencing inflation will always have a balance of payments
problem. (12)
can anyone help me with this question please. its from w06/p2
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the price level rises, each unit of currency buys fewer goods and services; consequently, annual inflation is also an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy.A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the Consumer Price Index) over time
A balance of payments (BOP) sheet is an accounting record of all monetary transactions between a country and the rest of the world.These transactions include payments for the country's exports and imports of goods, services, and financial capital, as well as financial transfers. The BOP summarises international transactions for a specific period, usually a year, and is prepared in a single currency, typically the domestic currency for the country concerned. Sources of funds for a nation, such as exports or the receipts of loans and investments, are recorded as positive or surplus items. Uses of funds, such as for imports or to invest in foreign countries, are recorded as a negative or deficit item.BOP The types of deficits that typically raise concern are
A visible trade deficit where a nation is importing more physical goods than it exports (even if this is balanced by the other components of the current account.)
An overall current account deficit.
A basic deficit which is the current account plus foreign direct investment (but excluding other elements of the capital account like short terms loans and the reserve account.)
In normal circumstances (if we are not taking elasticities into account).Inflation causes a price rise of exports and causes a decrease in the price of imports.This would naturally reduce the amount of exports the country is selling and increase the amount of imports coming into the country.This would be a cause of severe problems in the future especially if the country begins to rely on imports.
However the affects on Revenue of exports and expenditure on imports depends upon E.D for export and imports.
First assuming the demand for imports and exports is elastic
(Draw two diagrams with only demand curve which should be elastic looking.One diagram should be for exports and one for imports.Inflation would cause a increase in price of export and decrease in price of imports.Draw this price increase and decrease on diagram and you will see revenue of export have decreased drastically whereas for supply it has increased).
From the above diagram it is clear that imports are rising so BOP is falling,however if the demand is inelastic
(do the same but the demand curve should be inelastic looking.)
You will see that Revenue of exports have risen much more then imports so as a result BOP is improving.
(conclusion)The BOP will fall if the demand for export and imports are elastic.If they are not then Inflation may actually improve the BOP.
-
Thanks alot :)
-
Thanks alot :)
Anytime.
-
CAUSES OF MARKET FAILURE
-----------------------------
According to mainstream economic analysis, a market failure (relative to Pareto efficiency) can occur for three main reasons.
First, agents in a market can gain market power, allowing them to block other mutually beneficial gains from trades from occurring. This can lead to inefficiency due to imperfect competition, which can take many different forms, such as monopolies, monopsonies, cartels, or monopolistic competition, if the agent does not implement perfect price discrimination. In a monopoly, the market equilibrium will no longer be Pareto optimal. The monopoly will use its market power to restrict output below the quantity at which the Marginal social benefit (MSB) is equal to the Marginal social cost (MSC) of the last unit produced, so as to keep prices and profits high.An issue for this analysis is whether a situation of market power or monopoly is likely to persist if unaddressed by policy, or whether competitive or technological change will undermine it over time.
Second, the actions of agents can have externalities, which are innate to the methods of production, or other conditions important to the market. For example, when a firm is producing steel, it absorbs labor, capital and other inputs, it must pay for these in the appropriate markets, and these costs will be reflected in the market price for steel. If the firm also pollutes the atmosphere when it makes steel, however, and if it is not forced to pay for the use of this resource, then this cost will be borne not by the firm but by society. Hence, the market price for steel will fail to incorporate the full opportunity cost to society of producing.In this case, the market equilibrium in the steel industry will not be optimal. More steel will be produced than would occur were the firm to have to pay for all of its costs of production.Consequently, the MSC of the last unit produced will exceed its MSB.
Finally, some markets can fail due to the nature of certain goods, or the nature of their exchange. For instance, goods can display the attributes of public goods or common-pool resources, while markets may have significant transaction costs, agency problems, or informational asymmetry. In general, all of these situations can produce inefficiency, and a resulting market failure. A related issue can be the inability of a seller to exclude non-buyers from using a product anyway, as in the development of inventions that may spread freely once revealed. This can cause underinvestment, such as where a researcher cannot capture enough of the benefits from success to make the research effort worthwhile.
-
wowi !!!! Thanks again !!!!!!! :D :D :D :D :D :D :D :D :D :D
-
help again plz :P
Why does balance of Payments have to Balance ? a small explanation wolud also be fine
-
help again plz :P
Why does balance of Payments have to Balance ? a small explanation wolud also be fine
Macro economic instabilty.
A deficit in the balance of payments has these effects
an excess of imports over exports, a dependence on foreign investors, and an overvalued currency. Countries experiencing a payments deficit must make up the difference by exporting gold or Hard Currency reserves, such as the U.S. Dollar, that are accepted currencies for settlement of
international debts.
Since more is imported and less is exported. The real national income will fall which would have ripple effects and damage the economy. There could also be a rise in inflation.
Foreign exchange reserves will be depleted which will hurt the stability and reserve funds.
-
This explaination of J - curve theory could prove important in your explaination of trade deficit
In economics, the 'J curve' refers to the trend of a country’s trade balance following a devaluation or depreciation. A higher exchange rate initially means imports are more expensive, or equivalently exports sell for less foreign currency, making the current account worse (a bigger deficit or smaller surplus). After a while, though, the volume of exports will start to rise because of their lower more competitive prices to foreign buyers, and domestic consumers will buy fewer of the costlier imports. Eventually, the trade balance should improve on what it was before the devaluation. If there is a currency revaluation or appreciation there may be an inverted J-curve.
Following the depreciation or devaluation of the currency, the volume of imports and exports will remain level due in part to pre-existing contracts for imported goods that have to be honoured. However, the depreciation will cause the price of imports to rise and the price of exports to fall. Therefore, total spending on imports will subsequently increase and total spending on exports will decrease. It is this that causes the worsening of the current account.
Moreover, in the short run, demand for the more expensive imports remain price inelastic. This is due to time lags in the consumer's search for acceptable, cheaper alternatives. As a result, the quantity demanded for imports remain the same, although consumers are now paying a higher price for it. Ceteris paribus, a worsening of the current account, and hence the balance of payments, is to be expected in the short run.
Over the longer term a depreciation in the exchange rate can have the desired effect of improving the current account balance. Demand for exports picks up and domestic consumers will switch their expenditure to domestic products and away from expensive imported goods and services. Equally, many foreign consumers may switch to purchasing cheaper imported products instead of their own domestically produced goods and services.
Empirical investigations of the J-curve have sometimes focused on the effect of exchange rate changes on the trade ratio, i.e. exports divided by imports, rather than the trade balance, exports minus imports. Unlike the trade balance, the trade ratio can be logged regardless of whether a trade deficit or trade surplus exists
-
Thanks helped me loads !!! :D :D :D
-
CAUSES OF MARKET FAILURE
-----------------------------
According to mainstream economic analysis, a market failure (relative to Pareto efficiency) can occur for three main reasons.
First, agents in a market can gain market power, allowing them to block other mutually beneficial gains from trades from occurring. This can lead to inefficiency due to imperfect competition, which can take many different forms, such as monopolies, monopsonies, cartels, or monopolistic competition, if the agent does not implement perfect price discrimination. In a monopoly, the market equilibrium will no longer be Pareto optimal. The monopoly will use its market power to restrict output below the quantity at which the Marginal social benefit (MSB) is equal to the Marginal social cost (MSC) of the last unit produced, so as to keep prices and profits high.An issue for this analysis is whether a situation of market power or monopoly is likely to persist if unaddressed by policy, or whether competitive or technological change will undermine it over time.
Second, the actions of agents can have externalities, which are innate to the methods of production, or other conditions important to the market. For example, when a firm is producing steel, it absorbs labor, capital and other inputs, it must pay for these in the appropriate markets, and these costs will be reflected in the market price for steel. If the firm also pollutes the atmosphere when it makes steel, however, and if it is not forced to pay for the use of this resource, then this cost will be borne not by the firm but by society. Hence, the market price for steel will fail to incorporate the full opportunity cost to society of producing.In this case, the market equilibrium in the steel industry will not be optimal. More steel will be produced than would occur were the firm to have to pay for all of its costs of production.Consequently, the MSC of the last unit produced will exceed its MSB.
Finally, some markets can fail due to the nature of certain goods, or the nature of their exchange. For instance, goods can display the attributes of public goods or common-pool resources, while markets may have significant transaction costs, agency problems, or informational asymmetry. In general, all of these situations can produce inefficiency, and a resulting market failure. A related issue can be the inability of a seller to exclude non-buyers from using a product anyway, as in the development of inventions that may spread freely once revealed. This can cause underinvestment, such as where a researcher cannot capture enough of the benefits from success to make the research effort worthwhile.
Is this in the syllabus?
How about if i explain the positive and negative externalities with diagram in this question.
-
Is this in the syllabus?
How about if i explain the positive and negative externalities with diagram in this question.
this is one of the factors that causes market failure,you also have to write about monopolies and failure to provide certain type of goods.
-
hey hey hey
does any 1 have ECONOMICS standard data booklet !!! ???
-
here 4 bs
-
If the firm also pollutes the atmosphere when it makes steel, however, and if it is not forced to pay for the use of this resource, then this cost will be borne not by the firm but by society. Hence, the market price for steel will fail to incorporate the full opportunity cost to society of producing.In this case, the market equilibrium in the steel industry will not be optimal. More steel will be produced than would occur were the firm to have to pay for all of its costs of production.
In the above statement, i have few doubts.
1) Why "market price for steel will fail "?
2) What do you mean by "incorporate the full opportunity cost to society of producing"?
3) Since price drop as you said why the firm will want to produce more?
Thanks and pls explain.
-
Is this in the syllabus?
How about if i explain the positive and negative externalities with diagram in this question.
Market price will fail not for the firm but because of the society as firm's market price does not include externalities.
2)Same as above market price should be that price which takes Positive externalities and negative externalities into account.
3)Read again it means that the production of the firm will be much lower if it were to take externalities into account
-
Is the market price is the price charge to the consumers?
If positive and negative externalities included , market price should be high but firm's price will relatively low as firm isnt consider +ve and -ve externalities. Is this right?
-
Is the market price is the price charge to the consumers?
If positive and negative externalities included , market price should be high but firm's price will relatively low as firm isnt consider +ve and -ve externalities. Is this right?
absolutely