Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
NCEA Level 3 Economics (90630) 2011 — page 1 of 11 Assessment Schedule – 2011 Economics: Describe an economic problem, allocative efficiency, and market responses to change (90630) Evidence Statement The following Economics-specific marking conventions are used in this assessment schedule: (I) (E) means identify means explain (Q) means refer to the question Code Question Evidence A1 ONE See Appendix One for (a) and (b). (a) (b) TWO (e) (f) THREE (e) The law of diminishing returns. As variable resources are shifted from dairy to forestry, the output of forestry increases, but at a diminishing rate – meaning the curve is concave to the origin. Achievement Merit Excellence TWO of: • Increase in dairy production shown on graph (upward arrow on y-axis or 2010 identified and labelled on curve) • Opportunity cost clearly labelled with arrow • Law of diminishing returns OR principle of increasing costs OR resources not equally suited to the production of dairy and forestry described. • Decreased demand for labour in Graph Three of Question Two (e) DL1 OR arrow. • Derived demand idea described in relation to teachers in Question Two (f). • Derived demand idea described in relation to farmland in Question Three (e). NCEA Level 3 Economics (90630) 2011 — page 2 of 11 Code Question A2 / TWO M2 (b) (c) Evidence Achievement Merit ONE of: Producer Surplus occurs in the market for early childhood education as suppliers are willing to supply each ‘unit’ for a lower price than they receive in the market. With the removal of subsidy, an excess demand (shortage) will now exist at the current price of $100. Consumers will bid the price up. As the price rises, the quantity demanded will fall, and the quantity supplied will increase until equilibrium is reached. (b) Correct description of what Producer Surplus means (in the early childhood education market). (c) Full description of market forces given – excess demand (shortage) and price rises, and: QS increases OR (c) Partial description of market forces given – Price rises and one of: • Shortage (excess demand) • QD falls • QS increases. QD falls. NCEA Level 3 Economics (90630) 2011 — page 3 of 11 Code Question A3 TWO M3 (a) Evidence See Appendix Two. E3 (d) (e) • Real wages measure the purchasing power of the wage • The (nominal) wage adjusted for inflation • The wage measured in constant dollars. See Appendix Three NB answer to this may provide A1 evidence (f) • I with the removal of the subsidy, the ECE centres will receive $25 less per child • E this will mean supply will decrease, as supplying at each price is less profitable. With the decrease in supply to S1 in Graph Two, the price of childcare will increase to P1, and less childcare places will be filled • I since less childcare places are filled due to the higher price, the demand for qualified ECT to provide the childcare service in the centres will decrease (as shown in Graph Three) • E as the demand for Achievement TWO of: • Supply curve shifted up by $25, new price and quantity correct in Graph Two • Correct definition of real wage • Demand for qualified ECT decreased in Graph Three • Correct quantity employed in Graph Three OR Q1 labelled OR involuntary unemployment labelled. Merit TWO of: • Explanation of why Graph Two changed • Explanation of why Graph Three changed (derived demand idea) • Explanation of involuntary unemployment in this labour market • Explanation of effect on the allocation of teachers in ECE sector • Explanation of effect on other labour markets – recognition of childcare as cost of supplying labour for some people. Excellence The effects on all markets are fully explained by THREE of: • Effect of the subsidy on the market for childcare fully explained with reference to Graph Two • Effect of the subsidy on the market for qualified ECT fully explained with reference to Graph Three • Effect on the allocation of teachers in ECE sector fully explained • Effect on other labour markets fully explained. NCEA Level 3 Economics (90630) 2011 — page 4 of 11 • • • • • • the qualified ECT comes from the demand for the service (derived demand idea) NB answer to this bullet point may provide A1 evidence I with the real wage unchanged due to qualified ECT being under collective employment contracts, and fewer qualified ECT demanded, Q0 to Q1 in Graph Three – and qualified ECT – will become involuntarily unemployed from these centres E as centres switch to the relatively cheaper ECT, fewer qualified ECT will be employed I since demand for workers in early childhood centres with over 80% qualified staff falls, this will mean more qualified ECT are available E this will mean that more qualified teachers will be available for other centres in the sector that currently cannot get qualified teachers OR E this will not affect teacher allocation in the ECE sector because if the market was in equilibrium before the change, then other centres will not want any more expensive fullyqualified ECT, as they already have the resource mix that maximises their profit Other labour markets may be affected, as the NCEA Level 3 Economics (90630) 2011 — page 5 of 11 higher cost of childcare may mean that some workers will supply less to other labour markets because it isn’t worth working many hours, due to the higher cost of childcare (cost of supplying to those markets). OR The surplus of labour in ECE may create a surplus in other labour markets (as they look for work somewhere else). Code Question A3 M3 THREE Part A E3 (a) (b) Evidence THREE of: See Appendix Four • I with higher incomes in China and India, world demand for dairy products will increase • E with higher incomes these countries are able to demand more so world price will rise. (c) See Appendix Four (d) 0.32 (e) Achievement • I PES will be more elastic next year • E as over time farmers can adjust all resources. This year they can only adjust variable resources (labour – cow numbers), but in the future they can also adjust fixed resources – convert more farms to dairy, expand factory • Increase demand for dairy in Graph Five means higher price • Partial answer to (b) I or E – may have slight economic error • Higher price in Graph Four • X correct • PES correct. Merit TWO of: • Full answer to (b) I and E • Explanation of why PES is more elastic next year • Explanation that price in New Zealand equals the world price • Explanation of the effect on price of farmland • Explanation of how other producers may benefit – at least one example. Excellence The effect on all markets is fully explained by THREE of: • Effect on supply over time using PES fully explained (must include the idea of LR all inputs can vary and QS changes proportionally more (more responsive) than price • Effect of New Zealand being a price taker fully explained • Effect on the market for farmland fully explained • Effect on other producers fully explained. NCEA Level 3 Economics (90630) 2011 — page 6 of 11 • • • • • • • • • • • capacity Q next year the quantity supplied can be more responsive to price changes I New Zealand is a price taker: so the world will buy all New Zealand output at the one price OR because NZ is small relative to the rest of world so we cannot influence the price E dairy supply in New Zealand will increase next year, but the world will buy it without any change in the world price of P1 Q so the price of dairy in New Zealand will match that of the world price (P1) I demand for farmland in New Zealand will increase (derived demand idea) NB: answer to this bullet point may provide A1 evidence E with higher profits to be made in dairy, more farmland will be wanted to convert to dairy Q the price of farmland in New Zealand will increase I producers who are involved in supporting the dairy industry will benefit (e.g. farm advisors) E with more demand for dairy, more of their services will be demanded Q they will receive higher prices and make more sales, thus being more profitable Other suitable NCEA Level 3 Economics (90630) 2011 — page 7 of 11 examples could be producers in service towns like petrol stations or supermarkets. NCEA Level 3 Economics (90630) 2011 — page 8 of 11 Code Question A2 Part B M2 (f) Evidence Achievement ONE of: Allocative efficiency occurs when: • A situation where the total Consumer + Producer surplus is maximised • A situation where production is at full capacity (best technical use) and consumers’ / society’s demand is met • A situation where no one can be made better off without someone else being worse off. • Correct definition of allocative efficiency • Correct shaded area of deadweight loss • Description of why DWL occurs – loss of PS/CS not gained by another party (loss of PS greater than gain in CS). Merit TWO of: • Correct definition of allocative efficiency • Correct shaded area of deadweight loss • Description of why DWL occurs – loss of PS/CS not gained by another party (loss of PS greater than gain in CS). (g) (i) See Appendix Five (ii) The deadweight loss occurs because: the loss of surplus to the producer (by the price falling below P0) is greater than the gain in surplus that the consumer makes. OR Loss of welfare by producers (and/or consumers) not gained by another party. Judgement Statement Achievement Achievement with Merit Achievement with Excellence Minimum of: Minimum of: Minimum of: 1 A1 1 A1 1 A1 1 A2 1 M2 1 M2 1 A3 1 M3 1 E3 Codes: A1 refers to the first criterion. A2 and M2 refer to the second criterion. A3, M3, and E3 refer to the third criterion. NCEA Level 3 Economics (90630) 2011 — page 9 of 11 Appendix One – Question One (a) and (b) Graph One: Production Possibility Frontier for Land Use Appendix Two – Question Two (a) Graph Two: The Market for Fulltime Childcare per week in Early Childhood Education Centres Affected by the Decrease in the Subsidy NCEA Level 3 Economics (90630) 2011 — page 10 of 11 Appendix Three – Question Two (e) Graph Three: The Labour Market for Qualified Early Childhood Teachers in Centres Affected by the Decrease the in Subsidy Appendix Four – Question Three (a) and (c) Graph Four: NZ Market for Dairy Products Graph Five: World Market for Dairy Products NCEA Level 3 Economics (90630) 2011 — page 11 of 11 Appendix Five – Question Three (g) (i) Graph Six: New Zealand Domestic Market for 2-litre Bottles of Milk