Saturday, March 28, 2009

Factors that influence the demand for and supply of a product or service (10)

List of products/services:
  1. polytechnic education
  2. fast food
  3. restaurant meal
  4. iphone/pda phones
  5. holiday trips
  6. foreign maid
  7. private tuition
  8. [a fashionable product]
  9. [a fashionable service]
  10. steel
  11. spa treatment
  12. air travel
  13. loans from banks
  14. soft drinks
  15. computer games
  16. internet services/broadband service
  17. health supplements
  18. oil
  19. taxi service
  20. LCD TVs
  21. rice
  22. laptop
  23. public transport
Common mistakes
  • APPLICATION: Failure to apply to real life - The MOST RELEVANT FACTORS need to be identified and then RANKED IN TERMS OF IMPORTANCE, e.g. Think! Is the factor of changes in interest rate, or taxes, or government policies, or weather/climate, or even technology always relevant??
  • APPLICATION: Fail to show evidence of research and knowledge of context in terms of good/service; specific place, e.g. Singapore, worldwide; or time, e.g. last year, this year, recent years - Go beyond theory, do not just show theoretical possibilities, e.g. If income rises, then dd rises; however if income falls, then dd falls - Instead, consider "Current recession in US leads to falling income due to rising unemployment, pay cuts. Hence purchasing power would have fallen, leading to fall in dd for normal goods such as ....., ceteris paribus." Need to ELABORATE sufficiently - do not expect examiner to READ YOUR MIND!
  • ANALYSIS: Lacks elaboration and detail (as mentioned above) - e.g. NOT ENOUGH to say that "Since the price has been falling, according to law of demand, quantity demanded will rise" - you need to explain WHY price could have fallen, e.g. due to rising competition, or technology etc.. ; or "Technological advancement leads to rising supply" - you need to explain WHAT kind of technology is relevant for the good/service mentioned (requires some knowledge of product/service).. HOWEVER, DO NOT RAMBLE, i.e. repeat the same point again and again in different ways - WASTE of TIME!
  • ANALYSIS: Lacks accuracy, i.e. showing conceptual errors or errors of theory, e.g. unable to distinguish Dd and Qty Dd, Ss and Qty Ss - usually reflect as a "X" in the feedback or for really serious errors: "??"
  • ANALYSIS: Unclear writing, vague expressions - usually will be reflected as "?" or "What do you mean?", or "How so?" in the remarks/feedback given
  • ANALYSIS: Too informal - explanation does not use economics terms and expressions, e.g. "Because people have more money so they buy more", instead write "With higher income, consumers have higher purchasing power hence they are able to afford..."
  • STRUCTURE: Overall essay is hard to follow, for e.g. due to essay moving from demand to supply and then back to demand factors, or unimportant factors put first followed by more important factors (as mentioned earlier); or candidate repeating one demand factor repeatedly, e.g. Income rises and falls, then next paragraph talks about recession as a factor, and then another paragraph considers the impact of a change in income tax (which also affects the consumer income level!) - put all the points together!