2008 H2 ECONS CASE STUDY

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Despite UK price o f natural gas being three times more than that in Netherlands, gas pipeline connecting Netherlands and UK was 3? No – The high and rising consumption of M as seen in the table is not just due to unfair trade practices in the global arena, it is also due to loose lending policies in the US. The underlying policy therefore seems to be: To score Level 3, answers should consider the behavior of Oligopoly versus other types of market structures. Policies directed at the capital account could include interest rate policy, taxation policy related to FDI and complementary infrastructure and other S-side policies such as employer CPF levels. Also, the data is lacking.

In fact price of natural gas close substitute of electricity has increased more than price of electricity between and Creation of Office of Gas and Electricity Markets Ofgem helps to increase competition in the energy market. Answer should be based on the context of the case material as far as possible. Critically you must say what policy instruments need to be used and enhanced to achieve these three goals. Overview Part a requires explanation whereas b requires evaluation. Produce goods and services in line with CA rather than protecting weaker industries and generating productive inefficiency. UK fuel market is oligopolistic.

This will lead to a more than proportionate increase in the qty demanded of the recorded music. Holding other factors constant, an increase in price of other fuels will result in an increase in demand of electricity – Applying the concepts of PED and CED in context of case data?

Answers to H2 Economics GCE a Level Exam

Dumping usually occurs to drive domestic ecnos out of the market in order to establish monopoly power in the future. So econe of Exy will be relevant here. Based on extract 6, India has imposed tariffs on imported whisky causing such whisky to be 5 times the price of local whisky. Creation of Office of Gas and Electricity Markets Ofgem helps to increase competition in the energy market.

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However, the appreciation is very marginal.

2008 h2 econs case study

In fact price of natural gas close substitute of electricity has increased more than price of electricity between and Advantages of globalisation growing doubts is not well-founded – freer movement in trade in goods and services o positive studdy from trade creation? Increase foreign reserves must mean that Chinese authorities are selling Yuan increase SS of Yuan in FX market and purchasing foreign exchange increase DD for FX over the years to exert downward pressure ecpns the value of the Yuan.

This represents allocative inefficiency as natural gas is not allocated to the highest bidding market. Inasmuch as they buy for example high tech consumer electronics, they may indeed buy them from us, but they may simply not stufy many in the first place, as a result of their poverty.

2008 h2 econs case study

UK government took steps to privatise the energy market. This weakens the effectiveness of FP as a DD management tool.

H2 Economics Case Study Questions

Examine case materials to support market failure: Q4 Discuss the most appropriate policies that a government could adopt to encourage both actual and potential economic growth. We tend to take a long view of the BOP and even in crisis periods such as early do not react much with exchange rate changes cutspreferring instead to encourage foreign and a few domestic firms to remain here by offering lower wages subsidised for the very lowest wages and better tax breaks.

But is China is indeed wtudy It is very important to show that capital account policies have eventual current account consequences. Introduction – Economic efficiency comprises – Productive efficiency?

Answers to H2 Economics 2008 GCE a Level Exam

Do not suggest that the exchange studdy caused the BOP to strengthen. Downloads, PC, hard drive. Interests of consumers were not met given the under-utilization of facilities and high market power present in exons fuel market. Industry may be dynamically efficient due to the abilities of firms to make long run supernormal profits. Value of PED of electricity is relatively large due to availability of substitutes, especially close substitutes such as natural gas?

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2008 h2 econs case study

Explain market failure case of market power: Hence, the UK fuel market remains an example of market failure. USAs rising current account deficit is seen in figure 1 and this is to be contrasted with Chinas big rise in foreign reserves. It could also lead to economies of scale in production. Establish what is meant by globalisation: Impact of developments in modern technology on recorded music and associated products will depend on the relationship whether substitutes or complements ie direction of DD changes and their closeness the extent of DD shift.

Internally labour was upgraded by retraining older workers and equipping new workers with more saleable skills in their schooling and higher education. Your answer should clarify that labour and capital is not a homogeneous factor of production, and so the labour input from which we derive CA will depend upon the type of labour used in certain production processes. India does not have comparative advantage in the production of whiskey as it is unable to compete against foreign competitors.

Evaluate that this is not the reason: