In light of a lot of people having to work from home in the next couple of days, I'm going to allow a revision period for E Block today (6 Oct) and B Block tomorrow (7 Oct). Remember that the test will be next Monday 12 Oct during the HL extension block. It will be a long essay and a Paper 3 type question... so bring a calculator for that as you are not allowed to use your phone. Also remember ruler, pen, pencil. You need to make sure you come a bit early so that we can start the test at exactly 1pm... 30 minutes for Paper 3 and 45 minutes for Paper 1 (essay) means we have to use the whole 75 minutes.
I have attached two sets of worksheets in Google Classroom to help you in your revision.... you will be working on these in class but can also use to guide your revision at home.
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This is an HL only topic and could very well be part of a Paper 1 (essay) question.... particularly part (b) of a long essay.... the evaluation section. So make sure you can use this type of analysis when evaluating government policy choices. The tasks addressing the objectives above are in a packet you will be given. If you are learning from home then download a copy and complete https://docs.google.com/document/d/1-Eie1Bqyafk0UX_3SFTzsFIZwBomvGNi3423FmxChfI/edit?usp=sharing Link to presentation
The tasks to meet these objectives are in the Google Classroom. https://thecuriouseconomist.com/cost-push-inflation-is-driving-up-prices-throughout-the-indian-economy/ https://thecuriouseconomist.com/deflation-in-canada-why-economists-will-tell-you-that-falling-prices-is-not-something-to-be-happy-about/
Yes.... that is a 100,000,000,000,000 Zimbabwe dollar note! The product of extreme hyperinflation in Zimbabwe in the first decade of the 21st century. You can read about it here. By November 2008 the monthly rate of inflation was a massive 79,600,000,000%!!!
Hungary has actually suffered a higher rate of inflation than that.... in July 1946 the rate of inflation was 41.9 quadrillion percent! (41,900,000,000,000,000%) See here for more details. Current inflation details for Hungary can be found here. This is a great infographic detailing these two cases and three others: https://commodity.com/blog/hyperinflation/ The US Inflation calculator can be found here... how much would it cost you in 2014 to buy something that was priced at $20 in the year you were born and what is the cumulative inflation rate? Venezuela is currently experiencing high levels of inflation http://www.bbc.com/capital/gallery/20180918-the-people-making-bags-out-of-worthless-money You will receive a packet to achieve the objectives above (those learning from home please see Google Classroom. What's your rate of inflation? (NYTimes)
First we will consider the conditions required for price discrimination to take place (presentation). Then we will watch the first video above for some further examples. Then a packet awaits in Google Classroom (including a case study). This is the end of Theory of the Firm (with a long essay test and Paper 3 style test on Monday 12 October during HL extension).... and also the end of Microeceonomics. Back to Macroeconomics next time! Assumptions of the model
First up... the characteristics of oligopoly... you'll receive a handout on this. Next... games.... or, at least, "game theory"... some videos and a simulation to help explain this... and a task. Then you will make some notes, with diagrams, on the difference between collusive and non-collusive oligopoly. We will finish up with some case studies. For those working from home... there are two packets waiting for you under the Oligopoly heading on Google Classroom. Make sure you have finished the Monopolistic Competition packet first (including questions on Indian Takeaways and the questions on the back page).
A bit of perfect competition with a dash of monopoly power (price setting ability) = monopolistic competition. You'll get a packet to meet the objectives above. The graphs are the same as for monopoly but with a flatter (more elastic) demand curve. Link to packet: https://drive.google.com/file/d/1vmOo6cy4htmLzY0-WNWekCRW74082Jo2/view?usp=sharing
Barriers to entry
We will go further into the packet in the next two days to address these other objectives for monopoly. It is particularly important to be able to compare perfect competition to monopoly - this could be the second part of a long essay, i.e. the evaluation section.
Assumptions of the model
Now that we have looked at what makes up perfect competition, we turn our attention to imperfect competition and go right to the opposite end of the market structure spectrum... monopoly. We'll start off with looking at what characterizes the market and then look at the graphs. These are a bit more complicated than perfect competition so it's important that you follow the steps so that you don't put price in the wrong place... also be neat (with a ruler!) and remembere the relationsip between MC and AC curves. The profit maximising rule is still the same.... "where MR equals MC, that is where we want to be"! The second video above is mandatory viewing for anyone who misses me showing you how to do this in class. You will receive a copy of this packet https://drive.google.com/file/d/1jyAyXxWndcYWVdPcO8AkmpURjaClI3Ia/view?usp=sharing This first class is a short one and so we will use this time to see where we are in the course, discuss what comes next (hint: we still have to go back and finish Theory of the Firm) and the changes made to the May 2021 examination session. We will do a Kahoot to see what you remember from the time of distance learning and also see whether you remember how to draw the microeconomic diagrams we were looking at before distance learning started.
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