Readers Question: What are the key economice diagrams for 2882 and 2881 and what does COBA stand for in Economics 2882?
The key diagrams for Markets and market failure are the basic supply and demand diagrams
More complicated are the diagrams for externalities.
- Negative externality diagram - showing deadweight welfare loss
- Positive Externality diagram
Then you need to know who to deal with the externalities through taxes and subsidies.
There are other diagrams such as for Monopoly. But, at AS level a basic supply and demand diagram showing an inelastic demand and rising price is fine.
See also Economics AS Revision Guide
What Does COBA stand for in Economics 2882?
COBA I assume means Cost benefit Analaysis
1 comment so far ↓
Hi, thanks for this, it helped.
But just a quick question, isn’t the subsidy on negative externalities actually for postive externalities? Because you do not tend to subsides a bad product, you tend to tax them?
Sorry Im just a little confused, thanks
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