Supply and Demand, What you should know for Question 1!

You should know the assumptions that underlie the law of demand. You must also know the exceptions to theEvery year there is a long question (75 marks) on supply and demand, and on average two of the nine short questions (32 marks) are on S&D. So that means by knowing this topic inside out you can possibly have 25% in the bank come June.

This is what is on the Economics syllabus in relation to Demand & Supply

Like all topics in Economics, you need to know your definitions.

Define Demand & Supply (individual and market). You should also be able to define the different elasticity's, PED, YED and CED and explain in simple terms what they mean. 

You should know the assumptions that underlie the law of demand. You must also know the exceptions to the law such as inferior products or snob goods. 

You should also know the law of supply and the exceptions to the law such as minimum price or capacity constraint.  

You must be able to interpret the Supply and Demand graphs. You need to be able to find the market equilibrium, you have to be able to graph shifts of both curves and discuss the reasons for possible movements along the curves or movements of the curves. 

Elasticities

You need to be very comfortable with Elasticities. If you decided to answer Q1 last year (2012), elasticity’s accounted for 66 (16.5%) marks of the 400 available on the whole Exam. None of these questions were asking for a lot. It was basic interpretation of the numbers.

You should know how to calculate all three of the elasticities (PED, YED & CED). You should know what each number means or be able to interpret an elasticity, and you should know what affects or determines the elasticity of a product?

*** Exam analysis ***

Supply, Demand & Elasticities come up every year and it's usually Q1 on the paper.

Some Past mock questions

***Sample Question***

Selling Bord Gais - Privatisation

With all the talk at the moment of Bord Gais's imminent sale, I thought it would be a good idea to look  over what Privatisation is and why the Irish Government are contemplating this action. Privatisation is the selling of state owned companies to the private sector, like the sale of Eircom in  1999. Advantages of Privatisation

- Cash from the Sale of the company (€1 to €1.4 billion for the sale of Bord Gais)

- The Private company will be more efficient as they are looking to maximise profit

- The state don't need to waster time or money looking after the company

- The public may be able to buy shares and part own the company

Disadvantages of Privatisation

- Loss of control of the company

- The Private sector only wants profit. (They may not look after rural projects)

- Jobs can be lost in the search for maximum profits

- A private monopoly is still a monopoly

Ever wondered why you should study economics?

This great article from Andrew Gillespie head of Business at Oxford Brookes sums up what economics is all about and why you should study it.

Why study Economics?

2013 Exam

The Exam has been and gone, I hope you were all happy with it. The exam looked pretty fair, it was looking for pupils to interpret and give their opinion rather than just regurgitate text from the book which is a much better way of examining, even if it is harder for pupils to prepare for.

If you want to see the exam, It's available here.

Countdown to the Exam

So most of you will have started your leaving cert with English yesterday, I hope it went well.

Before the panic sets in, what can you do from here? you are not going to cover the whole Economics course properly whilst also studying for your other exams.

There are a few bankers for the Economics exam, the following topics have come up every year as full long questions.

• Supply, Demand and Elasticities

• Market Structures

• Factors of Production

My predictions

• The public sector pay bill

• The greying population and its consequences

• Emigration (bran drain)

You only need to answer 4 long questions, so I would recommend being as clear as possible on these topics.


I don't like making predictions on possible questions, but I would be surprised if at least one of the following don't make an appearance...

Best of Luck to all sitting the exam.

My recommendations on timing

150 mins Exam.

Section A, 6 questions 25 mins

Section B, 4 Long questions 30 mins

This will leave you with 5 mins to read the exam at the start.

Market Structures - What you need to know for Q2.

I know lots of pupils stumble over the characteristics of the different market structures,  perfect competition, imperfect competition, oligopoly and monopoly. 

I have found that this table can be effective when answering questions as you just need to remember the left column, and then apply your knowledge about each Market type to relevant points 

Most years, you are asked to draw a labelled diagram of one of the market structures and explain the equilibrium position. Below I have put together diagrams with the long run positions for each of the market structures.

In Perfect Competition the firm is a price taker, and is met with a fixed horizontal demand curve.  The firm is selling at its lowest point on the average cost curve (most efficient point) which along with the no barriers to entry ensures that customers are not exploited. 

In Imperfect Competition the firm is met with a regular downward sloping demand curve (AR).

 The firm will usually try to maximise profits and hence produce the quantity where MC=MR. This is not the best point for the consumer as the firm is not getting the full potential benefit from economies of scale (lowest point of ac).

In Oligopoly there are only a few firms. Each firm will react to what others do hence the kinked demand curve. If firm a raises the price above the equilibrium other firms will keep their price stable and hence take some of firm a's market share. If firm a reduces their price below the market equilibrium price, others will follow them down and all of the firms market share will remain constant.

In Monopoly there is only one firm and the firm faces a downward sloping demand curve. The firm can choose the price of the good or the quantity made available for sale but not both. Monopolists will usually produce the quantity where MC =MR as this is the most profitable point.  

**** Exam Analysis ****

Market Structures comes up every year and is usually question 2 in the long questions. There is nearly always a short question as well, so that means it could account for as much as 22% of your exam in June. 

Beware of questions which make a statement such as "European short haul airlines operate under conditions of Imperfect competition or Oligopoly.... as the statement will often be false and you must agree or disagree as appropriate. The best way to answer such a question is to apply the table above and think does the European short haul airline apply to the market structure in the question. 

Sample Mock Questions

Ireland's new debt deal

So Ireland have reshuffled their debt, basically Ireland have spread out their debt over a longer period, we will pay back more in total, but this will free up some cash in the short term. 

Father Ted explains the situation here

Watch the clip

Karl Deeter gives a good synopsis of the new deal and how it will save each household approximately €8,000 over the course of the debt.