Economics: Demonstrate understanding of how consumer, producer and / or government choices affect society, using market equilibrium (90986)

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1 Assessment Schedule 2013 NCEA Level 1 Economics (90986) 2013 page 1 of 9 Economics: Demonstrate of how, producer and / or government choices affect society, using (90986) Evidence Statement Evidence ONE (a) (b)

2 NCEA Level 1 Economics (90986) 2013 page 2 of 9 Evidence statement ONE (c) At $100 there is a of pairs of boots, as there are boots ed but only boots supplied. Boot buyers will bid up the price of boots, as they fear missing out. As the price rises, quantity ed will fall (from pairs to pairs) as some players can no longer afford to buy the now more expensive boots. This is the law of. Meanwhile, the sellers of boots will increase the quantity supplied (from to pairs), as boots will now be more profitable. This is the law of. The price of boots will stop rising when the price reaches $150, at which the quantity ed will equal quantity supplied of pairs. N1 N2 A3 A4 M5 M6 E7 E8 with only ONE correct plotting of most points describes a price. with TWO correct plotting of most points describes a price. with correct plotting of 9 points, with point identified and ONE describes a price. breadth of with correct plotting of all points, with point identified and TWO describes a price. how is restored. Any THREE uses data to identify a the ie Q d > Q s why price will increase (ie. will bid up price) applies law of (ie Pá Q s á ) applies law of (ie Pá Q d â ) how is restored. Any FOUR uses data to identify a the ie Q d > Q s why price will increase (ie will bid up price) applies law of (ie Pá Q s á ) applies law of (ie Pá Q d â ) how is restored with some reference to data / graph. Only minor errors in use of terms. using data calculates size of why price will increase (ie will bid up price) why Q s rises as P (ie: more profitable) why Q dfalls as P (ie: less affordable) how is restored with specific reference to data / graph. Uses appropriate terms. using data calculates size of will bid up obtain available boots why Q srises as P (ie: more profitable) why Q d falls as P (ie: less affordable until clears, Q s = Q d, restored figures not stated. restored at $150 & Q e = pairs. N0/ = No response; no relevant evidence.

3 NCEA Level 1 Economics (90986) 2013 page 3 of 9 Evidence statement TWO With more football boots entering New Zealand, the of boots will rise. This is shown as a shift of the from S S 1. There are more boots being supplied at each and every price. This will create a of boots at the existing price. As a result, the stores will reduce their prices in order to get rid of unsold stocks. With cheaper boots available, the quantity of boots ed will rise as grab cheap boots. As the price of football boots fall, more boots will be sold. Football boot will be better off as they now have access to cheaper boots. This may also entice: some to buy a spare pair of boots those who do not play soccer may now wish to take it up as the boots are cheaper football club memberships will possibly grow. Football will have greater choice, as more variety of boots enter the. With cheaper boots, may now spend more on other items. Some may switch away from more expensive activities.

4 NCEA Level 1 Economics (90986) 2013 page 4 of 9 N1 N2 A3 A4 M5 M6 E7 E8 with only ONE shifts curve to will rise fall in price quantity sold. with TWO shifts curve to will rise fall in price quantity sold. understandi ng with THREE shifts curve to states that will rise a fall in price a quantity sold. breadth of understan ding with FOUR shifts curve to states that will rise identifi es a fall in price identifi es a quantit y sold. the change in : shifts S to the, new identified explains THREE rising due to more boots being imported fall in price due to excess producers lower price to clear / excess goods As price decreases - Q d (not D) benefit to. the change in : shifts S to the, new identified explains FOUR rising due to more boots being imported fall in price due to excess producers lower clear / excess goods Q d (not D) benefit to. the effect of a change in on and. Only minor errors in use of terms, : links reasons for increased to shift of S to or S- S 1 links fall in excess / and producers reasons for decreasing prices links decrease in increase in Q d OR benefit for the. Ref P e to P 1, Q e to Q 1, S to S 1 are used and consistent with changes shown on graph Comprehensiv e explanation of the effect of a change in on and in context. Uses appropriate terms eg quantity ed not, : links reasons for increased to shift of S to or S- S 1 links fall in excess and producers reasons for decreasing prices links decrease in increase in Q d benefit for the. Ref P e to P 1, Q e to Q 1, S to S 1 are correct and consistent with changes shown on graph N0/ = No response; no relevant evidence.

5 NCEA Level 1 Economics (90986) 2013 page 5 of 9 Evidence statement THREE Non-price s firms can use to increase for football boots: to make a complementary good cheaper, eg shirts to offer a giveaway, eg spare laces to advertise the boots this will make aware of the boots have a celebrity endorse the boots may trust the brand if a celebrity endorses it firms may sponsor a sports team, therefore may identify with the brand and be loyal customers offer a loyalty scheme where buying boots may make eligible for other benefits have a competition all buyers of boots go into a draw for a prize. This would entice to buy the boots at the higher price, P 1 and therefore shift the curve from D D 1. The increase in sales will reduce the unsold stocks. Once the curve shifts to D 1, there will no longer be a as all the leftover boots will be sold. The sellers would increase their s because they are selling more boots (Q e to Q 1 ) at the higher price of P 1. Profits would rise since the difference between and costs would grow (as long as the cost of the promotion did not outweigh the increase in ).

6 NCEA Level 1 Economics (90986) 2013 page 6 of 9 N1 N2 A3 A4 M5 M6 E7 E8 with only ONE P 1 as a price with a labels the of boots at P 1 ONE nonprice football boot sellers will with TWO P 1 as a price with a labels the of boots at P 1 ONE nonprice football boot sellers will with THREE of P 1 as a price with a labels the of boots at P 1 ONE nonprice football boot sellers will breadth of with FOUR P 1 as a price with a labels the of boots at P 1 ONE nonprice football boot sellers will the effect on : graph correct & shifts D to the to the ONE of Explains how a nonprice how shifts to the effect the effect profit the effect on : graph correct & shifts D to the to the TWO of Explains: how a nonprice how shifts to the effect the effect profit the effect of the non-price. Mostly in context. Only minor errors in use of terms. THREE of Explains: how a nonprice how shifts to the effect on sellers the effect on sellers profit Ref P e to P 1, Q e to Q 1, D to D 1 are used and consistent with changes shown on graph. the effect of the non-price, in context. Uses appropriate terms eg quantity supplied not. how a nonprice how shifts to the effect on sellers that needs to outweigh the cost for profits to Ref P e to P 1, Q e to Q 1, D to D 1 are correct and consistent with changes shown on graph. N0/ = No response; no relevant evidence.

7 NCEA Level 1 Economics (90986) 2013 page 7 of 9 Evidence FOUR (a) (b) Referring to the graph above, identify and calculate the: i. Quantity buy Before: games After: games ii. Price pay Before: $80 per game After: $90 per game iii. Price sellers Before: $80 per game After: $70 per game iv. Total per month to the government of this tax: $ (c) The price paid by will rise as computer game sellers pass some of the tax onto the ($10). Gaming will be worse off because they must now pay $10 more for each game and there are fewer games being purchased / ed. Consumer spending on computer games decreases by $ ($ to $ ). The seller s price will fall as tax is paid to the government. Sellers are worse off. Their s fall as they sell fewer games and $10 less per game. Sellers decreases by $ ($ to $ ). The government will gain tax of $20 per game sold and now that games are sold per month they will get of $ per month. In the long term, this is money that can be used to help reduce the health costs related to people who get addicted to computer games, but also be used to fund programmes that get young people active, eg sports, dance or the Government may decide to put this tax into other areas of spending that benefits others, eg welfare payments, so society will benefit. OR Consumers may reduce their computer game time and become more active, so long-term health improves with lower costs to society.

8 NCEA Level 1 Economics (90986) 2013 page 8 of 9 N1 N2 A3 A4 M5 M6 E7 E8 with only ONE left higher price lower quantity. with TWO left higher price lower quantity. with ALL left higher price lower quantity. breadth of with ALL shifts S to the left higher price lower quantity TWO. effect of sales tax. shifts S to the left stating THREE. effect of sales tax. shifts S to the left stating FOUR. the effect of sales tax by stating: explaining THREE change in and effects on spending change in producer and effects the benefit to society of the tax. Figures correct but not required to be repeated in the explanation; minor error in terms or specific terminology omitted. the effect of sales tax by stating: explaining ALL uses data to explain change in and effects on spending uses data to explain changes in producer and effects the benefit to society of the tax. Figures and terms are correct and at least two figures cited in paragraph one of which needs to be a calculation of spending OR producer. N0/ = No response; no relevant evidence.

9 NCEA Level 1 Economics (90986) 2013 page 9 of 9 Judgement Statement Not Achieved Achievement Achievement with Merit Achievement with Excellence Score range

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