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Economics HL paper 1 Time Zone 0 May 2016


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2 minutes ago, Djsporting said:

Did 1) and 3) 

 

Abuse of Monopoly power & Negative externalities and Automatic Stabilizers and Fiscal policy one. 

 

Just wondering. For the Fiscal policy question did anyone represent partial crowding out as a possible consequence of the implementation of fiscal policy. Question one was really time consuming though.. we'll see how it goes 

 

I did 3 as well...although I did part a) really badly, part b) was a bit better...I didn't mention partial crowding out, and neither did other people doing it in my school but I guess you could mention it along with Government spending....

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7 minutes ago, Djsporting said:

Did 1) and 3) 

 

Abuse of Monopoly power & Negative externalities and Automatic Stabilizers and Fiscal policy one. 

 

Just wondering. For the Fiscal policy question did anyone represent partial crowding out as a possible consequence of the implementation of fiscal policy. Question one was really time consuming though.. we'll see how it goes 

I mentioned crowding out saying that an increase in government spending could be counter-effective if there was a decrease in investment. Anyways I thought the paper was pretty hard.. :/

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How did you answer the 3a) question, with automatic stabilizers? I drew a business cycle diagram with two curves (one with more recessionary and inflationary gaps and one that was 'flatter' + the potential output curve) and then kind of explained how unemployment benefits keeps consumption up in a recession and progressive income tax system keep consumption down in an expansion - but I am not sure if this was how you should do it? 

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3 minutes ago, sormaj said:

How did you answer the 3a) question, with automatic stabilizers? I drew a business cycle diagram with two curves (one with more recessionary and inflationary gaps and one that was 'flatter' + the potential output curve) and then kind of explained how unemployment benefits keeps consumption up in a recession and progressive income tax system keep consumption down in an expansion - but I am not sure if this was how you should do it? 

That's the correct approach. I mentioned that, and mentioned the fact that it may be used in a recession as well as to stabilize the business cycle but I did not go into much depth. I wasted to much time in number 1, then did number 3b) in depth and then in the last 15 minutes did the automatic stabilizers one. How many graph ddi you guys do in total? I did like 7 

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Just now, Djsporting said:

That's the correct approach. I mentioned that, and mentioned the fact that it may be used in a recession as well as to stabilize the business cycle but I did not go into much depth. I wasted to much time in number 1, then did number 3b) in depth and then in the last 15 minutes did the automatic stabilizers one. How many graph ddi you guys do in total? I did like 7 

For the entire exam I think I did 6 graphs - two on number 3 (one on a and one on b) and 4 on number 1 

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21 minutes ago, Djsporting said:

For number 1b) Did you represent the externalities? MSC > MPC? 

Yes, and showed how a shift in S-curve=MPC due to the tax would lead to a quantity produced closer to the Qopt and thus reducing the externality etc.

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7 minutes ago, sormaj said:

Yes, and showed how a shift in S-curve=MPC due to the tax would lead to a quantity produced closer to the Qopt and thus reducing the externality etc.

Exactly, as well as the fact that a tax internalises the externality and legislation does not correct? 

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Hey sorry guys if you want to beat me up for this. 

I did Question 2 and 4, harder questions.  I find microeconomics easy and macroeconomics slightly complicated. I will not agree this is the hardest Economics Paper 1 because i did PP from 2009 to 2015 November 😄  

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22 minutes ago, inriya said:

Hey sorry guys if you want to beat me up for this. 

I did Question 2 and 4, harder questions.  I find microeconomics easy and macroeconomics slightly complicated. I will not agree this is the hardest Economics Paper 1 because i did PP from 2009 to 2015 November 😄  

I did all papers from 2006 until November 2015 and I found this one to be quite better than say, May 2015? I found M15 quite harder. Only reason why I didn't choose two was due to Price discrimination there wasn't a lot to comment on and I tend to write quite a lot, plus i'm quite fond of negative externalities. Part B) in Question two looked like a blessing.. quite a lot to tak about there. However, I  think this depends on the time zone? 

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23 minutes ago, Djsporting said:

I did all papers from 2006 until November 2015 and I found this one to be quite better than say, May 2015? I found M15 quite harder. Only reason why I didn't choose two was due to Price discrimination there wasn't a lot to comment on and I tend to write quite a lot, plus i'm quite fond of negative externalities. Part B) in Question two looked like a blessing.. quite a lot to tak about there. However, I  think this depends on the time zone? 

Tbh, I picked question 2 is because I was talking about it with my friend (exact same question and I was so shocked in the exam). I revised price discrimination and mentioned all 3 degrees of them (although not required by IB), by throwing some examples and the 3 most important features for price discrimination, boom, 10 marks for everyone. 

I do not think Economics boundaries will be lowered this year :( because most people in my school find Economics Paper 1 easy. 

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6 hours ago, punkrock said:

It's actually the TZ2 exam.

For the micro question (b), which was something like evaluate the use of regulations to reduce negative externalities, regulations don't include indirect taxes do they? 

 

No, I had the same questions and I'm sure it's TZ0. 

And yes, indirect taxes help reduce the consumption of demerit goods which cause indeed negative externalities. That according to my knowledge, if I'm wrong please correct me.

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6 hours ago, sormaj said:

No they don't... I did say that regulations included indirect taxes though so I hope they won't give me a 0 for not understanding the specific demands of the question... I did argue that one way of regulating the market is by imposing market-based policies while another way of regulating the market is through legislation and thus I feel like I justified why I thought that indirect taxes counted as a regulation but I don't know... 

Omg, I also said indirect taxes can be used as government regulation to reduce negative externalities... though I did not include the graph. How many points do you think I'll lose?

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Did someone answer question 4? b) was something about evaluating the efficency of the investment when used for economic growth. Did you mention interest rates? Bacause I forgot about interest rates until my last paragraph where I mentioned that they can be an incentive for invesment when they are at a low rate but was that correct?

I got so confused investment...hope this time was the investment form the AD where infrastructure is investment, for example.

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5 hours ago, Djsporting said:

Exactly, as well as the fact that a tax internalises the externality and legislation does not correct? 

Yes, I did not show it in my diagram though as I did not have time, but I mentioned it as an advantage. However, since I discussed neg. ext. of consumption I said that direct legislation (in form of preventing people of young age to buy the good) would be a better option if you really want to reduce the externality as it would decrease the demand, which would have a more significant difference in quantity consumed than the tax due to the very inelastic PED of cigarettes. Did you focus on consumption and if you did, did you come to the same conclusion? 

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5 hours ago, inriya said:

Hey sorry guys if you want to beat me up for this. 

I did Question 2 and 4, harder questions.  I find microeconomics easy and macroeconomics slightly complicated. I will not agree this is the hardest Economics Paper 1 because i did PP from 2009 to 2015 November 😄  

I think that if you could chose Q2 because you had a good sense of price discrimination, then it wasn't as difficult as if you had to chose Q1 because of time management. Everyone I spoke said that time management was the thing they struggled with (not really the content and formulating coherent arguments) and that made the test so much harder, because Q1a) was asking so much of you so you lost a lot of time already in the beginning and were so stressed out during the rest of the exam, which at least for me makes it more difficult to have a nice structure and an effective evaluation. 

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1 hour ago, Ana Lau said:

Omg, I also said indirect taxes can be used as government regulation to reduce negative externalities... though I did not include the graph. How many points do you think I'll lose?

If you did not include a graph at all for the b) answer you can at the most get 9 points I think, as a appropriate diagram is required if you want to get more points. As for the government regulation - as I did the same mistake I really really hope that we won't lose a lot of points for that, but we will certainly not get to the upper markband as it requires you to have "no significant errors". However I hope they won't punish us to harshly and say that we "didn't understand the specific demands of the question" because then I think we can only get like 4 points or something for the b)-part... But yeah let's hope it only counts as a "significant error" because then we still have a chance to get 11p for the b-part I guess. 

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1 hour ago, Ana Lau said:

No, I had the same questions and I'm sure it's TZ0. 

And yes, indirect taxes help reduce the consumption of demerit goods which cause indeed negative externalities. That according to my knowledge, if I'm wrong please correct me.

They do reduce taxes, but the economics IB-book says that they should be considered as a market-based policy, not a government regulation. Which I don't agree with though because as the taxes regulate the market + they are impose by the government I wrote that they are a government regulation. Oh well... 

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24 minutes ago, sormaj said:

I think that if you could chose Q2 because you had a good sense of price discrimination, then it wasn't as difficult as if you had to chose Q1 because of time management. Everyone I spoke said that time management was the thing they struggled with (not really the content and formulating coherent arguments) and that made the test so much harder, because Q1a) was asking so much of you so you lost a lot of time already in the beginning and were so stressed out during the rest of the exam, which at least for me makes it more difficult to have a nice structure and an effective evaluation. 

I had a good sense of price discrimination :D

Plus time management is really vital in Paper 1, very important. I planned ahead for 5 minutes so I ended up with more than 15 minutes remaining to review my answers than struggling with a certain part of description. 

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