-._._.- Posted April 29, 2013 Report Share Posted April 29, 2013 For economics paper 1 and paper 2, how important are real world examples? And if they are pretty important, is there anywhere I can find like a compilation of real world examples that are divided into econs topics? Reply Link to post Share on other sites More sharing options...
Black Bird Lockheed Posted April 29, 2013 Report Share Posted April 29, 2013 Real world and latest examples are considered as a very important aspect in your exam papers. My econ teacher ( she was the moderator of Econ Sl ) says that she won't give full marks unless we write real world examples and that too latest ( present inflation, unemployment etc). IB expects you to constantly update yourself by reading newspapers. If you expect to score 6-7 follow this method, it is always beneficial to you. Reply Link to post Share on other sites More sharing options...
yii yann Posted April 29, 2013 Report Share Posted April 29, 2013 (edited) Well examples are super important for two reasons - they give you marks, and they provide a basis for anything you say. Using them is crucial for the 7 category, just like the person above has said. Also, just go through each topic and think of one or two examples. Won't take you more than 30 mins. Edited April 29, 2013 by yii yann Reply Link to post Share on other sites More sharing options...
-._._.- Posted April 30, 2013 Author Report Share Posted April 30, 2013 (edited) Also, just go through each topic and think of one or two examples. Won't take you more than 30 mins.Ya I suppose I'll do that. It'll probably take me longer because of my awesome procrastination skills and the fact that I have poor general knowledge. Edited April 30, 2013 by -._._.- Reply Link to post Share on other sites More sharing options...
Ezak Posted April 30, 2013 Report Share Posted April 30, 2013 Could someone inform me how they would include a real life example in a question? My teacher have mentioned nothing about this, and we are given an article to evaluate for each question, so it seems superfluous to refer to an extra example when the question contains one itself. Is it fine if you only mention it quickly? Reply Link to post Share on other sites More sharing options...
yii yann Posted April 30, 2013 Report Share Posted April 30, 2013 Well, a very simple example would be like this: A natural monopoly is one that can provide for the demand of the entire market, at a lower average total cost than that of two or more firms. An example would be the the SMRT (train) corporation in singapore - for another company to set up railways and enter the market, it would be extremely costly, and highly impractical. In addition to this, the SMRT corporation already provides for the entire demand of Singapore's train users, and therefore a second firm would be a misallocation of resources. Another example would be, An expansionary fiscal policy aims to shift AD to the right, through the methods of reduced taxation and increased government spending, in order to stimulate economic growth. (Graphs, explanations, blah blah)... However, it may not always achieve its intended effect. For example, consider the situation of Greece. Any reduction in tax would probably not lead to increased consumer spending, as people would be more inclined to save than spend in a recession. Investment would also be highly doubtful as it requires business confidence, and Greece simply doesn't have that from it's investors. Also, government spending requires the government to have substantial funds - or it would require borrowing money. This could exacerbate an already worsening situation. Etc. These are just very simple examples, but they provide a good view of what you can do by knowing some good examples. Reply Link to post Share on other sites More sharing options...
Ezak Posted April 30, 2013 Report Share Posted April 30, 2013 How about micro- examples, is it ok if you mention examples even though they are not widely known? The fast food market of my town as an example of a monopolistic competition. Reply Link to post Share on other sites More sharing options...
yii yann Posted April 30, 2013 Report Share Posted April 30, 2013 I'm sure it'd be okay to provide examples that are not so popular, but if you have a choice, try to go with one that the examiner might know too. Like monopolistic competition - sports shoes (adidas, puma, nike, reebok, etc), or even tablets (Apple, Samsung, cheap manufacturers, etc). But if your town's fast food market is a really good example (i.e it leads to several good points), by all means use it! Reply Link to post Share on other sites More sharing options...
Ezak Posted April 30, 2013 Report Share Posted April 30, 2013 Sure, but I would not consider most of these as monopolistic competition, at least not the tablets. It just feels that most micro examples are just that, domestical examples, but thanks for the input! Reply Link to post Share on other sites More sharing options...
Babydolleyes Posted April 30, 2013 Report Share Posted April 30, 2013 I'm sure it'd be okay to provide examples that are not so popular, but if you have a choice, try to go with one that the examiner might know too. Like monopolistic competition - sports shoes (adidas, puma, nike, reebok, etc), or even tablets (Apple, Samsung, cheap manufacturers, etc). But if your town's fast food market is a really good example (i.e it leads to several good points), by all means use it! !!! please make sure you can distinguish between oligopolies and monopolistic competition! adidas and puma = oligopolies (very very big companies for one thing). Monopolistic competition are a huge number of very small firms, such as all of the restaurants in your local area, they are very small relative to the industry but they can set their own prices to certain extent and even develop brand loyalty, but not by any means comparable to an oligopoly and the massive brand loyalty you see there! Reply Link to post Share on other sites More sharing options...
yii yann Posted April 30, 2013 Report Share Posted April 30, 2013 Well the companies are certainly very big, yes. However, the industry for sports shoes is vast. We are looking at specific industries, and the market share of a particular company in that industry. That's why you have top end brands like adidas and puma, and cheaper brands, knock offs, etc. The cheap goods thing is something that several people overlook. Producing sports shoes doesn't have large barriers to entry, it represents a small investment. The airline industry seems to me like it's an example of oligopoly (even then, its kinda stretching the definition, cause its got several players). Reply Link to post Share on other sites More sharing options...
Babydolleyes Posted April 30, 2013 Report Share Posted April 30, 2013 Well the companies are certainly very big, yes. However, the industry for sports shoes is vast. We are looking at specific industries, and the market share of a particular company in that industry. That's why you have top end brands like adidas and puma, and cheaper brands, knock offs, etc. The cheap goods thing is something that several people overlook. Producing sports shoes doesn't have large barriers to entry, it represents a small investment. The airline industry seems to me like it's an example of oligopoly (even then, its kinda stretching the definition, cause its got several players). But surely you can't categorize adidas and puma as monopolistic competition right? Because according to the assumptions of monopolistic competition the firms are all small relative to the size of the industry, and according to the assumptions of oligopolies the industry may be incredibly vast, but a select few firms dominate the industry = many many many firms produce sports shoes, but the industry must be mostly dominated by adidas, puma and nike etc? Doesn't the book also state that oligopolies may have both large or no barriers to entry and states nike and adidas as an explicit example of an oligopoly? I'm just making sure here Reply Link to post Share on other sites More sharing options...
yii yann Posted April 30, 2013 Report Share Posted April 30, 2013 Well in the book I use (Cambridge Economics for the IB Diploma), it does state that sports shoes are an example of monopolistic competition. But then again, these definitions are just models. Its highly unlikely to be perfectly true in the real world. I agree with the book, mainly cause if I go to a sports shop in a mall near me, they carry shoes from super expensive nikes to rather cheap ones. It makes sense to me cause I've seen it. However, if you're not convinced that it's monopolistic competition, then by all means categorize it as oligopoly! It's definitely not a set answer, and its one that's up for debate. Reply Link to post Share on other sites More sharing options...
Babydolleyes Posted April 30, 2013 Report Share Posted April 30, 2013 Wow thats very interesting! I will definitely take note of that, I had no idea monopolistic competition could involve large firms that can actually influence the industry but I definitely understand where you are coming from. Reply Link to post Share on other sites More sharing options...
-._._.- Posted May 1, 2013 Author Report Share Posted May 1, 2013 What are the important topics that is likely to come out and thus requiring me to know an example? Market failure, minimum/maximum price, demand & supply side policies, inflation for P1 and aid, tariff, protectionism for P2? What else? This may be a bit too much to ask for, but is it possible for you to include some recent examples for me? I have Scotland's minimum price for alcohol, Japan giving aid to influence whaling policies, EU giving higher tariffs for manufactured goods so developing countries are forced to export raw materials instead of processed ones which have more value (tariff escalation). What else? Reply Link to post Share on other sites More sharing options...
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