A2 Economics Micro technique spot 3 – when to use real-world examples

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May 27, 2014 by Paul Goldsmith

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Another question pupils have is about the use of real-world examples in their essays. This becomes a particularly important issue in A2, where in some of the exams there are what I would call “free essays” as opposed to “data response essays”. These free essays aren’t attached to any data – which means that you will not find examples to apply your theories and analysis to unless you have learned some.

For instance – if you have a question such as “Collusion is always good for producers and bad for consumers, Discuss” you need to have a ‘bank’ of real-world examples of where companies have been caught colluding to show how what they did might fit with the question in the essay.

You can also use industries as an example, and companies within them – just to make a hypothetical point. If you want to argue that collusion is far more serious for consumers in industries dominated by very few firms you might use the credit card operations industry which is dominated by Mastercard and Visa as your example, explaining what would happen if they started colluding on prices (although Sotheby’s and Christie’s does provide with a nice real life one where the collusion was caught).

If you don’t use real-world examples at all in these free essays you can miss out on marks for application – because the selection of appropriate examples shows that you understand the theory well.

Should you be answering a data response question – the question might say – ‘using the data and your economic knowledge…..’. This is prompting you not just to rely on the data – but to also show your engagement with the subject and your understanding of the theory with your use of real-world examples you can apply to the theory you are talking about. This is very useful for example where the data proves one point (e.g. collusion is always bad for the consumer), but you know of examples where it can be good for the consumer in the long run. You should still focus more on the data than on your outside economic knowledge in my view – but it is still important to have those real-world examples at hand.

This is why, when your teacher is going off on what seems like a tangent, telling a story about some companies and their behaviour – it is worth writing down the names of those companies – because you never know – your teacher might be giving you something useful to learn and use!

As far as revision is concerned – it is not a bad thing to, when you are revising a theory – try and ‘attach’ a real world example to that theory that you can remember, and use when appropriate. Easy marks.

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