Q&A Board for IB Economics (class of 2025) by Mr Kelly

HOW TO USE THIS Q&A WALL

kmatthew6_1 — 2023-08-02 04:17:37 UTC

It's simple really; leave your questions here and either I or other students will jump in to help.

We will have this wall for all of the course, i.e two years.

Would be great if you left your name on the note, but no worries if not.

YED values for necessity goods and normal goods

2023-08-24 14:24:31 UTC

In class you showed us that anything from 0-1 is a necessity good and anything from 1 onward is a luxury good. Where both of these represent normal goods. On the worksheet 17 it gives us YED values of +0.55 and +1.01. Which would be normal and which would be a necessity?

What are the YED values for substitutes and complementary goods?

2023-08-24 14:25:05 UTC

Kelly's essay with answers

2023-09-10 08:29:09 UTC

Should we swap the label of S1 and S2 on Diagram2 ?

Can you upload the answer of Competitive Market Equilibrium worksheets?

2023-09-10 09:06:42 UTC

This is basic question, but do I have to use example (such as crab omelette) to explain and write the 10 mark essay?

2023-09-10 13:27:32 UTC

Could you upload the answer key of worksheet 2.7?

2023-09-18 12:48:58 UTC

Explain how the price mechanism allocates resources in a market economy. [10 marks]

2023-09-19 11:15:02 UTC

To answer this question, is it necessary to write about government intervention?

I think there are mistakes on the handout "Evaluating, discussing and judging government intervention"

2023-09-20 14:58:14 UTC

I think the Price floors is minimum prices and price ceilings is maximum prices.

Why bother with a price floor instead of just setting a much higher sales tax on specific goods? Would it not achieve a similar effect?

2023-10-05 02:53:21 UTC

Revenue: Sales taxes generate revenue for the government, whereas price floors do not.
Effect on Quantity: Sales taxes generally reduce the quantity of a good that is bought and sold, whereas price floors can result in a surplus.
Beneficiary: Price floors are usually designed to benefit producers, whereas sales taxes are not designed with the welfare of producers in mind.

What is asymetric information?

2023-10-09 23:57:07 UTC

Does the demand curve represent the marginal benefits (both social and private) and the supply curve symbolizing the cost ( both social and private). If this is correct, how can each curve symbolize both social and private costs/benefits? I hope this makes sense.

2023-10-10 13:32:19 UTC

Is the marginal private benefit/cost the one that does not move? In the sense that when subsidies are provided for example the marginal social benefit/cost will move and the private will remain where it is.

2023-10-10 14:58:12 UTC

"Evaluate the view that government intervention in agricultural markets will create more problems that it solves. [15 marks]" I think this can be considered Subsidy and Price floor. In this case, should I use these two perspective to explain the problems?

2023-10-11 08:26:49 UTC

Can you give us some 15 mark questions for practice for tomorrow's summative?

2023-10-12 11:10:43 UTC

In the positive externalities of production, is there a welfare loss when the government subsidises the firms?

2023-10-25 01:53:38 UTC

On IA, if there is a news article sentence like "He warned that some employers he had spoken to told him increases to the minimum wage would lead to "£10 pints" and "£25 beef burgers".", Can I use the normal price of beef burger to draw a diagram on the IA?

2023-11-07 16:19:42 UTC

In the strong essay on schoolgy, there is a brief of the news. Should we write no brief or can we write little of them?

2023-11-07 16:50:42 UTC

If I write the IA about Efficiency, can I use the word "inefficiency" or should I use "not efficiency"

2023-11-09 03:26:04 UTC

Deflationary gap and inflation

2024-02-08 10:39:41 UTC

when SRAS shifts to the left, the national income decreases and price level rises. In this case, this is inflation but still can we say deflationary gap? (because equilibrium is placed left of the LRAS)

About monetary policy

2024-03-07 10:16:00 UTC

From Kognity, there is "External balance is achieved when a country's exports equal its imports. It is possible for the government to use monetary policy to move towards external balance. Imagine a country has a trade deficit. By raising interest rates, the government discourages both firms and consumers from spending on investment goods and consumer goods. If the reduction on spending includes imports, this will help move the economy to external balance." But I came up one more senario like "Increase in interest rates -> decrease in consumption -> decrease in investment -> decrease in AD -> decrease in PL and RGDP -> the money has more value -> hard to export". Which is more likely to occur as a actual situation?

On this diagram, does the Yfe at AD3 represent the full employment level of output or more than that (is there a natural rate of unemployment at this point)? The text refers to "full capacity" and "full employment," but they are stated as the same thing.

yyugo25 — 2024-03-09 05:02:15 UTC

Even though the monetary policy is demand-side policy, does it affect on long run aggregate supply? (for example investment leads to technological advancements and improve QQ of factors of productions)

yyugo25 — 2024-03-10 18:03:05 UTC

On the PPC curve, the full employment level of output (full potential level of output) is shown when the point is on the line, but I think that doesn't include the natural rate of unemployment. Also, if this is true, there are two means of the natural rate of unemployment. Is this observation correct? Or do full employment level of output and full potential level of output have different meanings?

yyugo25 — 2024-03-18 12:20:48 UTC

Keynesian money multiplier vs Credit creation

bluca25_2 — 2024-04-06 15:14:13 UTC

what is the difference between credit creation and the keynesian money multiplier?

Taxation

bluca25_2 — 2024-04-09 13:37:59 UTC

Do types of taxes such as regressive and progressive taxes which change according to income levels operate using tax brackets (like explored in class) generally?

What are tax incentives?

bluca25_2 — 2024-04-09 14:37:39 UTC

Demand-side policies to reduce natural unemployment.

bluca25_2 — 2024-04-29 16:31:10 UTC

I don't quite understand how demand-side policies are inefficient/not plausible policies to counter natural unemployment.

We learned that the balance must be zero in Balance of Payment in theory. However, we also learned that one of the reasons for trade protection is for the balance of payments correction. If the total balance is always zero, why must they correct it? Is this only for correcting the current account deficit, not for the total balance?

yyugo25 — 2025-01-12 09:03:49 UTC