Download Level 2 Economics (90795) 2011 Assessment Schedule

NCEA Level 2 Economics (90795) 2011 — page 1 of 5
Assessment Schedule – 2011
Economics: Describe international trade and its causes and effects using economic models (90795)
Evidence Statement
Question
ONE
(a)
(b)
(c)
Evidence
Achievement
TWO of:
See Appendix One
The WTO ruling will result in
imports into Australia of New
Zealand apples. This will
reduce the price of apples in
Australia from PA to PT. The
imports and lower price will
result in a lower quantity
supplied by Australian
growers and lower incomes.
The ruling will result in
increased exports of apples
from New Zealand. This will
increase the price of apples
in New Zealand from PNZ to
PT. The exports and higher
price will result in greater
quantity supplied by New
Zealand growers and greater
incomes. The higher price
(PT) that results from the
trade will mean that New
Zealand consumers will need
to pay that higher price to
compete with Australian
consumers for the same
apples. This results in a
decrease in quantity
demanded by New Zealand
consumers.

PT, X and M
correctly
identified

Price / Quantity
supplied /
income falls in
Australia

Price / Quantity
supplied /
income rises in
New Zealand.
Merit
Excellence
General explanation
of TWO of:
In-depth explanation
of BOTH of:
 the impact on
Australian apple
growers
 the impact on
New Zealand
apple growers
 the impact on
New Zealand
apple growers
 the impact on
New Zealand
consumers
AND
 the impact on
New Zealand
consumers.

a direct and
accurate
reference to the
two-country
model.
NCEA Level 2 Economics (90795) 2011 — page 2 of 5
Question
TWO
(a)
(b)
(c)
Evidence
Achievement
TWO of:
See Appendix Two
New Zealand has a
comparative advantage in
food production as each food
unit has a lower opportunity
cost of 0.4 car units than
India where each food unit
has an opportunity cost of
0.87 car units.
When overseas investment
funds come into New
Zealand this has the impact
of putting the Financial
Account into surplus to offset
the Current Account deficit.
These funds will be supplied
in return for interest or profit /
dividends. The increase in
overseas investment funds
will most likely result in an
increase in the outflow of
interest / profit / dividends
which is a Balance on
Income outflow. This
increased outflow is likely to
increase any Current
Account deficit.



X and M
correctly
illustrated for
India and New
Zealand
New Zealand
has a
comparative
advantage in
food production
the financial
account is
directly affected
by overseas
investment
funds.
Merit
Excellence
General explanation
of TWO of:
In-depth explanation
of BOTH:




why New
Zealand has a
comparative
advantage in
food production
the effect of
overseas
investment on
the financial
account
the effect of
overseas
investment
funds on the
Current
Account.
the impact on
the financial
account

the impact on
the Current
Account
AND

explains the link
between
financial and
the current
account.
NCEA Level 2 Economics (90795) 2011 — page 3 of 5
Question
THREE
(a)
(b)
(c)
Evidence
Achievement
TWO of:
See Appendix Three
If there is a negative impact
on the reputation of New
Zealand grown kiwifruit, then
there would likely be a
decrease in the world
demand for New Zealand
kiwifruit. The decrease in
demand will result in a
decrease in the price New
Zealand gold kiwifruit
exporters will receive.
The loss of gold kiwifruit
production will shift the S
curve to the left. As there is
no change in New Zealand
demand or the world price,
the decrease in S will result
in a decrease in exports and
export income. The fall in
exports and production will
mean that BOP gold kiwifruit
growers will earn less
income, although this will
only be the case for those
growers whose vines are
affected. The loss of income
for the growers will mean that
they have less money to
spend on consumption and
investment. Therefore other
BOP businesses that supply
the industry, or earn part of
their income from the
consumption of growers and
their workers, will face lower
sales and income. Hence
less will be produced due to
the lower demand for their
goods and services. The
overall impact will be a
reduction in the GDP of the
BOP region.



S curve is
shifted to the
left and
labelled, and X
is correctly
shown
Decrease in the
price New
Zealand gold
kiwifruit
exporters will
receive
Merit
Excellence
General explanation
of TWO of:
In-depth explanation
of ALL of:

the decrease in
the price New
Zealand gold
kiwifruit
exporters will
receive

the impact on
BOP gold
kiwifruit growers
of decreased
exports


the impact on
BOP gold
kiwifruit growers
the impact on
other BOP
businesses


the impact on
other BOP
businesses.
the impact on
the region’s
GDP.
Exports will
decrease and
BOP gold
kiwifruit growers
and other BOP
business will
lose income.
Judgement Statement
Achievement
Achievement with Merit
Achievement with Excellence
Minimum of:
2A
Minimum of:
2M
Minimum of:
2E
NCEA Level 2 Economics (90795) 2011 — page 4 of 5
Appendix One
The two-country model
New Zealand apple market
Price
Price
Australian apple market
S
PA
S
X
PT
M
PNZ
D
D
QA
Appendix Two
Quantity
QNZ
Quantity
NCEA Level 2 Economics (90795) 2011 — page 5 of 5
Appendix Three