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Economics SL paper 1

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Hey guys, how'd you all find the paper? I thought it was pretty good, I could've answered the micro or macro one. In the end I went for the macro one, seemed more interesting talking about all those stakeholders and comparing the types of inflation with deflation and then evaluating it from that particular standpoint! I brought in exchange rates into it as well through my discussion of interest rates and its impact on international competitiveness. How'd you guys feel about it?

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it was fine. cost-push and demand-pull was good (though i forgot wage factors for cost-push) and for the inflation/deflation evaluation there was just sooo much to write about.

overall good feeling.

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Oh but don't worry as long as you explained one factor, you're good to go, because its 10 marks and as long as you have a diagram and examples you should do well! I talked about how wage factors are causing cost-push inflation in many industries, particularly textile industries in USA because the labour is more expensive and workers demand greater wages' and with demand pull I didn't have a real-life example but I included a hypothetical case saying that in Norway where the economy is booming demand-pull inflation may result depending on how close to full employment the economy is operating! Then in part(b) I went on to say that demand-pull inflation isn't actually a bad thing because its a sign of a growing economy whereas a deflation caused by decreased demand isn't good because it hints at decreasing AD and so shows an economy in decline and with poor confidence! Its the opposite on the supply-side! I talked about savers, debtors, consumers, investors, exporters + importers, and then interest rates and its long run effect on currencies as well as the effect of that on trade balances!

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Oh wow haha you should have a guaranteed 7 then ;) yeah i mentioned a few cost-push factors, particularly rising oil prices so i hope thats okay. I think the examiners are not too strict for econ sl. I included a few real life examples which i memorized so i'm happy about that, especially for japan and its "wasted decade" of deflation. the markschemes tend to be quite open ended and lenient since "any appropriate answer should be awarded"- thats the thing i like(d) about this course

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Can anyone change the title to TZ1 and TZ2? Coz there was only one TZ (the code stated TZ0 if you noticed)

It was ****ty, none of the questions I expected came out!!! I was expecting market failure, determinants of AD, or fiscal/monetary policy but shiz there was only inflation question and the international one is also bad! Development one I didn't even look at. So I went for qn1 the micro one, about how demand&supply help allocate scarce resources thru the signalling&incentives functions of price. The second part was how govt intervention in agricultural market creates more problem than it solves.

For those who know how to do the micro one, do you think we need to talk about tax&subsidy in part b? I only talked about max&min prices :(

I think my essay was not bad but I don't feel that it's good either. Sigh.

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I did the first question! I don't remember the exact wording but Part B asked something about positive merit goods.

Are you HL? :S I didn't get any merit/demerit goods questions!

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Yeah we can can't we? paper 2 wasn't very good for me!! I didn't like the fact that they completely ignored macro-economics in the evaluation questions..and brought trade deficit, I knew trade deficit like had read about it but the table confusedddd me...so I'm pretty sure I screwed up the evaluation in number 2! The other two were good about minimum prices and exchange rates! Brought in stuff about lower inflation but higher unemployment in the higher exchange rate one, which I think I did pretty well on! Too much bloody development econ in the paper, would never have chosen the balance of payments one. I covered up by writing ALOT! I talked abt decreasing consumer and investors confidence in a deficit, whereas fall in GDP and unemployment was abit obvious due to the overimportation and lack of exports! But then I evaluated and said whether or not this is a bad thing, depends on what is causing it..a deficit can be a sign of an economy in growth and can easily be controlled through capital account sale of fixed assets and depreciating the currency, however the extent of the deficit is most importantly what will determine its impact on the economy!

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SL paper 1 number 1(b) was about price controls it was easyyy! So much to write about, I probably would have run out of time if I tried lol..and there's loads of diagrams you can include in that one! Yeah minimum and maximum prices is correct buffer stock scheme can also be an effective solution depending on how one evaluates each of them.

Edited by IBCONQUERER

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Can anyone change the title to TZ1 and TZ2? Coz there was only one TZ (the code stated TZ0 if you noticed)

It was ****ty, none of the questions I expected came out!!! I was expecting market failure, determinants of AD, or fiscal/monetary policy but shiz there was only inflation question and the international one is also bad! Development one I didn't even look at. So I went for qn1 the micro one, about how demand&supply help allocate scarce resources thru the signalling&incentives functions of price. The second part was how govt intervention in agricultural market creates more problem than it solves.

For those who know how to do the micro one, do you think we need to talk about tax&subsidy in part b? I only talked about max&min prices :(

I think my essay was not bad but I don't feel that it's good either. Sigh.

I'm not in SL but for a question about government intervention and as its a 15 mark question... yes I would expect that you'd have to at least mention subsidies as they are most often used in the case of agricultural markets. Max & min prices don't both really apply do they? Wouldn't the government only set a price above the equilibrium as it's usually done in the case to protect producers -- in the case of agricultural goods its not usually the consumers who they are trying to protect, hence a floor price being set. You could definitely talk about that in some detail though, the potential ineffeciency of producers as they know the gov't will buy off excess stocks or "buffer stocks" and overall misallocation of resources and the opportunity cost to the gov't as buying and storing of stocks is expensive and is only plausible if they are non-perishable goods, also how it harms many consumers who are of lower income brackets and can no longer afford these possibly essential goods. Subsidies would have also been a good example of government intervention and there could be some evaluation of how it artificially lowers the prices (how can this impact international trade and unfair 'dumping'?) but that in both of these cases how there is reduces uncertainty for the producers hence better standard of living for them (possibly?) and such things... was that useful at all?

I did the first question! I don't remember the exact wording but Part B asked something about positive merit goods.

Are you HL? :S I didn't get any merit/demerit goods questions!

that was definitely not an HL question. our micro was theory of the firm.

Edited by ro_1293x

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