M08/3/ECONO/SP1/ENG/TZ0/XX

1.
(a) “The price elasticity of demand and the price elasticity of supply for many primary commodities tend to be low.”  Explain what is meant by this statement,
and how this contributes to the problem of price instability for primary commodity producers. [10 marks]

(b) Evaluate the view that it is best to allow primary commodity prices to be determined purely through the free interaction of market forces. [15 marks] 

2.
(a) Explain how fiscal policy could be used to increase aggregate demand. [10 marks]

(b) “In the long-run, a country’s economic performance can only be improved through the implementation of supply-side policies.”  Evaluate this statement. [15 marks]

3.
(a) Identify three types of protectionism and explain how each may be used to correct a balance of payments deficit on current account. [10 marks] 

(b) Evaluate the extent to which a deficit on a country’s current account might be considered an economic problem. [15 marks] 

4.
(a) Explain how development might be measured. [10 marks] 

(b) Evaluate the view that the most effective way that a government could improve the welfare of its citizens is through the pursuit of faster economic growth. [15 marks]

M08/3/ECONO/HP1/ENG/TZ0/XX

1.
(a) Explain how a firm operating in an oligopolistic market might attempt to increase its market share. [10 marks]

 

(b) Evaluate the view that producers, and not consumers, are the main beneficiaries of oligopolistic market structures. [15 marks]

2.
(a) “The effect of a decrease in aggregate demand on output and the price level depends on the shape of the aggregate supply curve.”  Explain this statement. [10 marks] 

(b) Evaluate the likely effects of a falling rate of inflation on the performance of an economy. [15 marks] 

3.
(a) Explain the principle of comparative advantage and the benefits which might arise from free trade. [10 marks] 

(b) Evaluate the importance of membership of a trading bloc for the export performance of a country. [15 marks] 

4.
(a) Explain how development might be measured. [10 marks] 

(b) Evaluate the view that the most effective way that a government could improve the welfare of its citizens is through the pursuit of faster economic growth.  [15 marks]

Reflection

A major error I realized I made after taking the exam is that I did not define any key terms. I should always keep in mind to define all economic terminology. My explanations were fine but I needed to provide real life examples to further substantiate my evaluations.

Thailand

GDP per capita $9.200 (PPP; 2010)

 

Evaluate the impact of globalization on the economic development of developing economies

(a) Explain how an increase in the quantity and quality of a nation’s factors of production can promote economic development. • definition of factors of production  • definition of economic development  Candidates may respond to this in terms of measures of development such as HDI etc.  • explanation of an increase in the quantity of productive factors  • the impact of an increase in the quantity of resources on productive capacity, economic growth and, possibly economic development  • explanation of an increase in the quality of productive factors  • the impact of specific examples of an increase in the quality of factor inputs, e.g. the use of improved health and education programmes, on economic development  • reward the use of appropriate diagrams  • reward the use of appropriate growth models

(b) Evaluate the impact of globalization on the economic development of developing countries. A definition of globalisation
Answers may include:  • features of developing countries  • evaluate the impact of (in terms of positives and negatives):  –free trade  –FDI by MNCs  –liberalisation of capital markets  –greater labour mobility  –the transfer of knowledge and technology  –income and wealth inequality  –increased industrialisation and urbanisation -greater tourism  -protection in developed countries
Crucial to this question is the need for candidate answers to have clear links to economic theory. This is a big subject and answers may vary.A good candidate is going to define globalisation and then go on to evaluate its impact in terms of how they have defined it.
Examiners should be aware that candidates may take a different approach, which if appropriate should be fully rewarded.

halloween economics

Preliminary Thesis

As of now, I think countries should go for free trade rather than protectionism. Free trade allows for increased efficiency within a country as inefficient businesses will either have to innovate their technology and products or bankrupt. Protectionism kills incentive for those firms receiving subsidies, for example, as they do not have to be as competitive to stay in the market. Also, protectionism costs money for the government especially, and consumers too will also have to pay higher prices for the goods and services.

Type of Protectionism	Definition	Real World Example
Tariff	Tariffs are taxes on goods imported into a country. They are a form of protectionism and are often used by governments to try to reduce the level of imports into a country.
Quota
Subsidy

Evaluation

During my years of Economics HL, I have made great strives towards a successful academic life. Although the studies of economics and the rules of test have been hammered into our minds through hard core revision, we are but humans and are prone to mistakes

Aint nuthin’ but a Tax thang

Progz and Regz

Both progressive and regressive tax depends solely on one’s income, but the main difference can be illustrated by the fact that it’s reactions are opposite. The notion of progressive taxes is that, the more you earn, the higher your tax rate, whereas the notion of regressive taxes is that the less you earn, the higher your tax rates. Additionally, in classical terms, progressive tax is income tax, and regressive tax is sales tax.