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90983
1111111111111111111
909830
SUPERVISOR 'S USE ONLY
Level 1 Economics, 2013
90983 Demonstrate understanding of consumer choices,
using scarcity and I or demand
9.30 am Tuesday 26 November 2013
Credits: Four
Achievement
Demonstrate understanding of
consumer choices, using scarcity
and/or demand .
Achievement with Merit
Demonstrate in-depth understanding
of consumer choices, using scarcity
and/or demand .
Achievement with Excellence
Demonstrate comprehensive
understanding of consumer choices,
using scarcity and/or demand.
Check that the National Student Number (NSN) on your admission slip is the same as the number at the
top of this page.
You should attempt ALL the questions in this booklet.
If you need more space for any answer, use the page(s) provided at the back of this booklet and clearly
number the question .
Check that this booklet has pages 2-11 in the correct order and that none of these pages is blank.
YOU MUST HAND THIS BOOKLET TO THE SUPERVISOR AT THE END OF THE EXAMINATION.
Not
Achieved
TOTAL
7
ASSESSOR 'S USE ONLY
© New Zealand Qualifications Authority, 201 3. All rights reserved .
No part of this publication may be reproduced by any means without the prior permission of the New Zealand Qualifications Authority.
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2
You are advised to spend one hour answering the questions in this booklet.
QUESTION ONE: CONSUMER CHOICE
Taylor is a 16-year-old student who sings in the school choir and plays football. When she
is not rehearsing or training, she helps her parents in the family business. To relax in her
spare time, Taylor enjoys having friends around to play computer games. .
Complete (a) and (b) to fully explain how scarcity and values affect Taylor's consumer choice.
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(a)
Discuss how Taylor's decisions about her use of time and money will involve an opportunity
cost. In your answer, you should refer to the resource material above, and link the following:
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Economics 90983, 2013
ASSesSo_R'S
'::usEON~Y
3
Taylor's parents want Taylor to do extra shifts in the family business and spend more time
on homework, rather than playing computer games with her friends,
(b)
ASSESSOR'S
USE ONLY
Discuss how Taylor's values may differ from that of her parents. In your answer, you should
explain:
•
ONE value Taylor may hold when she decides to have friends around to play computer
games
ONE value Taylor's parents may hold when they want Taylor to spend more time
working in the family business and doing homework
•
how Taylor's values could conflict with those of her parents
TWO possible compromises Taylor and her parents might make to resolve this conflict.
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Economics 90983, 2013
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4
QUESTION TWO: LAW OF DEMAND
ASSESSOR'S
USE ONLY
Taylor uses income earned from working in her parents' business to buy computer games.
The following graph shows Taylor's annual demand for computer games.
Complete (a)- (c) to fully explain the law of demand in the context of Taylor's demand for
computer games.
(a)
Using the demand curve provided below, complete Taylor's annual demand schedule for
computer games.
Price
($)
120
;)
100
'
Taylor's annual demand for computer games
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10
12
Quantity (games)
Taylor's annual demand schedule for computer games
Price($)
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(b)
Quantity (games)
2--
\\)(\
3
~0
~0
5
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On the graph above, show the effect on the quantity of computer games demanded, if he
price per game falls from $100 to $60. Fully label all qhanges.
Economics 90983, 2013
5
(c)
Discuss the law of demand by referring to Taylor's demand for computer games.
ASSESSOR'S
USE ONLY
In your answer:
•
describe the law of demand by referring to relevant data from the graph or your
demand schedule on page 4
fully explain, with TWO reasons, why the quantity of computer games demanded by
Taylor changes when the price of computer games falls
0
name a complementary good Taylor may buy, and fully explain how the fall in the
price of computer games may have a flow-on effect on Taylor's demand for the
complementary good.
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Economics 90983 2013
6
QUESTION THREE: CHANGES IN DEMAND
ASSESSOR'S
USE ONLY
Instead of computer games, Taylor sometimes spends her income on football magazines,
which she reads to help with her training.
Complete (a)- (b) to fully explain the economic relationship between football magazines and
computer games in the context of Taylor's demand.
(a)
On the graph below, show how the reduced price of computer games may affect Taylor's
demand for football magazines.
Taylor's demand for football magazines
Price
($)
f -
Of(
'0'
D
Quantity (magazines)
Economics 90983, 2013
7
(b)
Discuss how the reduced price of computer games might affect Taylor's demand for football
magazines.
ASSESSOR'S
USE ONLY
In your answer:
•
explain the economic relationship between the football magazines and computer
games
explain the effect on Taylor's demand for football magazines when the price of
computer games falls
a_:lV\€
•
Cc<c<?L(flc1e"f;t•<:6fton
refer to the graph on page 6
effect~ that this change may have for Taylor.,
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Economics 90983, 2013
4
8
QUESTION FOUR: INCOME CHANGES
Taylor mainly uses her skipping rope to help with her football training, and she
occasionally pays for fitness sessions at a gym. Taylor's parents have increased the income
she earns from working in the family business.
Complete (a)- (b) to fully explain inferior and luxury goods in the context ofTaylor's demand t r
gym sessions.
(a)
Complete the sketch graph below to show the effect a rise in income would have on 11. ylor's
demand for gym sessions.
Taylor's demand for gym sessions
Price
($)
!llo lore\
D
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Quantity (sessions)
Economics 90983, 2013
on curve
9
(b)
Discuss how Taylor's increased income_ would affect her demand for gym sessions.
ASSESSOR'S
USE ONLY
In your answer:
•
explain inferior goods and luxury goo s in Taylor's context
refer to the graph on page 8
fully explain TWO flow-on effects this change may have for Taylor.
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