Economics

Neil3030

Dead handy i thought. Easy A I'd say. Did the 4 Micro questions. Only thing I wasn't too sure on was the substitution and the income effect but I'd say all in all a fair paper. Shorts were a laugh and a half aswel.
Now I'm finished!!!!!!!!!!!! WWWWWEEEEEEEEEEEEEEEEEEE

Boston

Originally posted by Neil3030
Dead handy i thought. Easy A I'd say. Did the 4 Micro questions. Only thing I wasn't too sure on was the substitution and the income effect but I'd say all in all a fair paper. Shorts were a laugh and a half aswel.
Now I'm finished!!!!!!!!!!!! WWWWWEEEEEEEEEEEEEEEEEEE

I opened the short question and said ****, if these are this easy whats section b like. when i saw section b i had to laugh. 1,2,3, and 6 i did. Not to bad easy A all round i'd say, so marking it is goign to be a bitch

mirv

I did the four micro as well. The income effect is when your real income becomes relatively higher thanks to either lower prices, or higher monetary income, and the substitution effect is the effect of having more purchasing power as one substitutable good becomes cheaper than another.

I think.

eirebhoy

Originally posted by Neil3030
Dead handy i thought. Easy A I'd say. Did the 4 Micro questions. Only thing I wasn't too sure on was the substitution and the income effect but I'd say all in all a fair paper. Shorts were a laugh and a half aswel.
Now I'm finished!!!!!!!!!!!! WWWWWEEEEEEEEEEEEEEEEEEE

Exactly the same questions as me. Also, I had the exact same problem with Substitution and income effects. I'd say I got a B1-A2.

BTW what did you write for that question you got stuck on, I hadn't got a clue, I start writing about normal, inferior, neccesities and luxuries. Very little Marks there. Also that same question came up in 2000, Q1b, have a look!

eirebhoy

(b) PI consumer spends all income on hvo goods, Good X and Good Y.
Both goods are normal goods but they are not complementary goods.
The price of good X is reduced and the price of good Y remains unchanged.
The consumer continues to spend all income on the Iwo goods.
Explain, using the Substitution effect and Income effect how this price
reduction affects the demand for both goods. 30 marks
Effects of a reduction in the price of Good X under
Substitution Effect : 15 marks Income Effect : 15 marks
Demand : Good X 1 Demand : Good Y 1 Demand : Good X 1 Demand : Good Y
Increases 2m Decreases 3m
increased decreased
marginal utility marginal utility
for Good X for Good Y
5 marks 5 marks
Increases 2m 1 Increases 3m
Consumer has additional income
(due to the reduction in price of Good X)
-4s both goods are normal goods
the demand for both goods will
increase
IO marks

Squall

B1/A2 here aswell. Did questions 1,2,3 and 7. Was a fairly nice paper. It was harder than last years according to my economics teacher(we bought him lunch afterwards , and had a few pints ourselves, mmmmmm liquid breakfast )

oh yes and


WOOT!!!!! FInished at last

Boston

that amkes absolutely no sense to me eireboy. as for the substitute and income effect, i had notes that explained them exactly for a price reduction, i couldn't believe my luck.

You where only asked what the exffect was in relation to good y if i recall.

honeymonster

I thought it was fairly ok, but it as a lot harder than previous years. I'd say I got about a B. I answered the first four questions and had time at the end to squeeze in the question on GDP.

sikes

screwed that exam up a bit. Section A was nice and handy. Question on elasticies went arse ways. well part a and c were grand but i misread the question about the ced. i thought that demand remained unchanged of good y but it actually said price remained unchanged and therefore talked about how a figure of 0 means a complementary good etc. After all the advice i received about reading q's etc it went out the window.

Other main problems were income effect/substitution effect and trasfer payments.

In the elasticity question will i get any mark for analysing a wrong figure??

also question 7 part a and part c ii were the same question with different wording.

Ah well its finished now.

Neil3030

Well this is literally all i wrote for the substitution and income effect:

Good X
Substitute Effect
Price reduction
More Purchased
MU Reduces
MU1 MU2

---

=

---

P1 P2

Quantity demanded rises in both cases



Good Y
Income effect
Less income spent on good X
More income to spend on good Y

eirebhoy

For the short question on the economic objectives of the government, you had to name four, I named six, two of them are wrong will I get full marks? Well there not exactly wrong, they are objectives of the government but they're just not in the book.

honeymonster

yep. they mark you out of your best four. Well thats wot my teacher told me.

Duffman

Well I thought it was a luuuvly paper.... section A was rather pleasant...

Boston

Originally posted by Neil3030
Well this is literally all i wrote for the substitution and income effect:

Good X
Substitute Effect
Price reduction
More Purchased
MU Reduces
MU1 MU2

---

=

---

P1 P2

Quantity demanded rises in both cases



Good Y
Income effect
Less income spent on good X
More income to spend on good Y

substitiute effect: is when a consuemrs demand for a good changes as a rsult of a change in the price of the good, and not due to a change in reall income. When i good drops in price, it is RELATIVELY cheaper then other good which remained at the same price. The substitute effect is allways positive for the RELATIVELY cheaper good, i.e. more will be bought. Good y had become relatively cheaper then good x, therefore more of good y will be purchased and less of good x

Inscome effect: this is where there is a change in a consumers demand for a good brought about by a change in real income, due to a change in the price of the good. The purchasing power of the consumer will increase since real income has increased due to the drop in price. More of both good will be purchased. But since it only asked about good y i just said more of good y will be purchased.

honeymonster, Afaik its your first four, not your best four answers to a single question that get the marks,