September 2016 Q32(ii)

Discussion in 'CT7' started by bhoy_1888, Apr 13, 2017.

  1. bhoy_1888

    bhoy_1888 Member

    I am curious as to why the graph for external benefit of production is different to the one in the notes/textbook?

    In the textbook there are no curves (just straight lines) and the welfare loss is easily spotted as the triangle that sits between the MPC and MSC curve. Also the demand curve is horizontal when in the notes it is downward sloping?

    Many thanks
     
    bhoy_1888, Apr 13, 2017
    #1
  2. Gresham Arnold

    Gresham Arnold ActEd Tutor Staff Member

    Hi,

    These differences result from a change in the textbook.

    The 2016 exams and Examiners' Reports were based on the on the 6th Edition of the "Economics for Business" textbook, but the 2017 exams and hence the ActEd Course Notes are based on the 7th Edition.

    The externalities graphs in the 7th Edition are slightly different from those in the 6th Edition.

    Best wishes

    Gresham
     
    Gresham Arnold, Apr 14, 2017
    #2
  3. bhoy_1888

    bhoy_1888 Member

    Thanks Gresham. So just to clarify as long as we stick to the graphs provided in the textbook as part of our materials this year we are fine?

    Thanks
     
    bhoy_1888, Apr 15, 2017
    #3
  4. Gresham Arnold

    Gresham Arnold ActEd Tutor Staff Member

    Yes, for the 2017 exams, the examiners will be expecting the versions of the graphs given in the 7th edition :)
     
    Gresham Arnold, Apr 15, 2017
    #4
    bhoy_1888 likes this.

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