Click
here to download the examiners' report for the June 2009 exam. It's brilliant. it shows you a candidate's response then one of them criticises it and tells you how to do better. Great revision resource. Nearly as great as........
......click
here to download a document called "evaluating unit 1". I've used the mark-schemes and examiners' reports to give you ideas on how to evaluate. It's complex and ideally I would have discussed it with you in a lesson. Instead, please leave comments or questions here and I shall answer your question. Let's try and get a mini-forum going.
Enjoy the snow ........... from your bedroom window as you sit and revise for the hardest, but most rewarding exam, of your school career.
4 comments:
I’ve been going through externalities today and I’m still a bit confused. Take congestion, for example. Smiff says it’s a negative production externality, and I would have thought it would have been a negative consumption externality (as you are consuming road space and the social benefit of doing so will diverge from the private benefit as it affects over road users).
I also don’t understand how positive consumption externalities are ‘internalised’ (healthcare and education are at zero price, so how does that make us consume the optimal amount?).
The final thing on my mind is merit goods. Is the problem of underconsumption always to do with information asymmetry and are there always externalities involved? As you can see, market failure is just not TomRed-friendly.
They’re all the queries on the top of my head, I hope I’ve worded them in an understandable fashion. Thanks for the evaluation help.
Smiff, typically, is indeed wrong. Congestion is a negative consumption externality.
If education and healthcare were provided by the market, they would be underprovided. Which is why they are not. In fact if the MSB of education were taken into account, education would be expensive and we teachers would be paid a fortune. Boo.
Merit goods do not always lead to positive externalities. for example, if I take vitamins every day, that only benefits me, but vitamins are generally underconsumed. Merit goods are only to do with consumption whereas externalities covers production and consumption.
See next post
That’s a lot clearer, thank you. So it appears to be a divergence between what one perceives to be the benefits to them and what the benefits really are to them, due to lack of information. Is it possible to draw this underconsumption on a diagram?
not unless there are positive externalities
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