Monday, May 7, 2018

Possible Essays Line-Up for 9708/42 of Cambridge A-Level Economics (CIE) (CAIE)

POSSIBLE questions (please take note, POSSIBLE): (will have more updates tonight)

1. Relationship between diminishing marginal returns/ SRAC and economies of scale/ LRAC

2. Whether firms should grow large or remain small

3. Distinguish between market structures e.g. perfect competition vs. monopoly or perfect competition vs. oligopoly etc in terms of pricing, output, barriers, products, productive efficiency, allocative efficiency and others

4. Income effect vs. substitution effect for normal/ inferior/ Giffen goods 

5. Economic efficiency (productive, allocative and social efficiency) and what are market imperfections (absence of public goods, merit goods, demerit goods, externalities etc) and whether government interventions will necessarily improve resource allocations (25 marks) (One of the most predictable questions with a 'one-size-fits-all' approach. They will always ask the same thing over and over again but phrased differently)

6. How wage rate is being determined in a perfectly competitive labour market (need to consider assumptions like homogenous good, homogenous worker, production is in the short run, no imperfections like government and trade unions etc. Then you will need to set up a schedule to show TPL, MPL, APL, MRPL, wage, MCL and ACL. Explain why a firm will hire up the point where MRPL = MCL.Please support your explanations with diagrams too)

7. Whether market forces/ economic theory of wages alone is sufficient to explain wage conditions in the real world (Usually a 25 marks question. First part of essay in most cases is almost similar to (6) above. Then you will have to say that it is not sufficient because wage rates may settle above equilibrium due to unions and government intervention or below equilibrium due to monopsonist employer)

8. Whether wage differential is due to factor 'X' alone (Usually a 25 marks question. Can consider a wide range of factors like PED, PES, monopsonist employer, trade unions, minimum wage, compensating differential, experience, skills and etc)

9. Measures to reduce income inequality and their limitations (provide universal education and healthcare, promote growth, more benefits, more progressive taxation etc)

10. Whether GDP alone is a reliable indicator of standards of living between countries/ rich and poor nations (yes to some extent, no because it ignores population, purchasing power, composition of output, shadow economies, leisure hours and externalities. Propose measures like HDI, NEW and MPI and mention about their limitations too)

11. Causes of unemployment (cyclical, structural, real wage, frictional, voluntary and seasonal unemployment

12. Whether 'X' and 'Y' are the only two characteristics of a poor developing country

13. Injections and multiplier (need to use own numerical example. Consider value of mpc, mps, mpt, mpm and injections. The most ideal number for mpc would be 0.5. Don't forget to use diagrams too)

14. Factors which may influence the level of investment

15. Fiscal/ monetary/ supply-side policies to achieve macroeconomic aims such as higher growth, lower unemployment, lower inflation and improvement in balance of payments (one of my favourites. For evaluations, do consider all the potential conflicts)

16. Conflicts between macroeconomic objectives (I will always use growth against inflation, balance of payments and income inequality. You may then evaluate by saying that it is not a problem if the growth is due to an increase in LRAS, increase in exports and etc)

My concern as a teacher:
a) To a very large extent, many questions are repetitive. However, every time when they repeat themselves, they can be worded/ phrased very differently. As a result you may think that this is an entirely different question when in fact it is not. This is the part where you all have to be very tactful. Let me show you some:

SAMPLE 1

October/ November 2011 (V1)

Question 2
The removal of imperfections in the market leads to an increase in efficiency in the allocation of resources. Discuss whether you agree with this view (25m)


SAMPLE 2:

May/ June 2015 (V2)

Question 7
‘The free market is not the way to achieve sustainable, efficient use of economic resources. Even the famous economist Adam Smith recognised that there was a need for some government involvement’

Discuss whether government involvement in the economy might overcome the weaknesses of the free market system (25m)

SAMPLE 3:

May/ June 2017 (V3)
Question 2
Firms should be allowed to produce in the manner they wish and consumers allowed to buy what they believe they want

Discuss whether this is the best means of ensuring an efficient use of an economy’s resources (25m)

b) You may end up choosing the wrong questions. Due to information failure, you may end up choosing those hard ones thinking that they are more doable AND shunning away from those easier ones thinking that they are hard

c) Watch out for key words/ terms. They can be quite different:
(i) Market share vs. Share market - One is sales turnover/ size of customer base whereas the other one refers to a place where stocks/ shares are exchanged

(ii) Market imperfections vs. imperfect market - One is mainly dealing with all market failures e.g. absence of public goods, merit goods, demerit goods, including monopoly itself. The other one is mainly market structure e.g. monopolistic, oligpoly and monopoly 

(iii) Wage inequality vs. income inequality - One is where the question is probably asking about reasons for wage differentials while the second is about discussion on how to reduce income gap between the very rich and poor

d) Please, monitor on how you use your time. Learn to write concisely. Do not write excessively. Use fewer but more effective words e.g. economic terms. Also, do not evaluate unnecessarily when the question does not require you to do so. It is a big waste of time which can have impact like opportunity cost e.g. being unable to finish next question means lower overall marks and grades 

e) Please do a quick planning for your essay before start writing. Avoid becoming a 'lost wanderer'. From my observations, those who normally don't plan for their essays are those who will always take longer to think of their next course of action

f) Finally, practice smart and not hard. Practice doesn't make perfect unless you perfect the way you practice

All the best for this Thursday's exam
(Gentle reminder - The list of questions above are just my guess/ opinion/ prediction and they ARE NOT DEFINITE)


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