Transcript 90198 AssSch.pps

90198 Describe the market
Achievement Criteria
Achievement
Describe the market
and market
equilibrium.
Achievement with
Merit
Describe the market
and explain market
equilibrium.
Achievement with
Excellence
Describe the market
and fully explain
market equilibrium.
90198 The Market
(a) Describe what a market is.
M
E
(b) Describe why the work that Steven and Rachel do on their
bathroom is considered to be non-market.
A
M
E
A place or situation where buyers and
sellers meet to exchange goods and
services.
The work Steven and Rachel do is nonmarket because there is no payment
involved for their time and skills/no
exchange is taking place. This is DIY (Do it
yourself)
A
Correct
definition.
Correct
description
including
no payment
OR no
exchange.
90198 The Market
(c) Explain why there is still a cost involved even when it is a non-market
activity.
There is an opportunity cost involved in DIY
activities. For example the time that Steven
and Rachel at working on their bathroom they
could have been earning money in their jobs;
or they could have spent the time doing a
leisure activity.
A
M
Opportunity
cost
explained
E
90198 The Market
(a) Describe the form of exchange which is taking place between
Steven and Henare.
A
M
Barter
E
Correct
term
(b) Explain TWO disadvantages of this form of exchange.
A
Barter requires a double coincidence of
wants which means that when each person
must have what the other person wants.
There is not a common measure of value
so it is difficult to price goods or services in
terms of other goods or services.
M
Explains
two valid
disadvantag
es of barter
E
90198 The Market
(c) Describe TWO types of markets from which Steven and Rachel
could purchase bathroom products.
A
Retail store, Trademe, second
hand goods from recycling
depot, garage sale.
M
E
M
E
Any two
(d) Identify the FOUR Functions of Money.
A
Medium of exchange
Standard of value
Store of value
Means of deferred payment
3 correct
90198 The Market
(e) Explain TWO of the Functions of Money
A
Medium of exchange: enables goods and
services to be traded without the need to
establish a double coincidence of wants.
Standard of value: enabling different
goods and services to be valued in a
common currency e.g dollars and cents.
Store of value: money holds its value over
time so people can hold some of their
wealth in the form of money.
Means of deferred payment: enables
debts to be settled at a later date.
M
Explains
two
functions of
money.
E
90198 The Market
(a) Complete the diagram
A
Offer and Acceptance
Consideration
Intention
No duress
Two
required
M
E
90198 The Market
(b) Refer to the contract Steven and Rachel have made with Perfect
Plumbing Ltd to explain TWO elements of a valid contract.
Steven and Rachel accepted the offer by
Perfect Plumbing Ltd to supply plumbing
services. There was an intention to create
a legal relationship.
The consideration of $55 per hour was
acceptable to Steven and Rachel and
Perfect Plumbing Ltd so something of
value was exchanged.
Steven and Rachel and the manager from
Perfect Plumbing Ltd were capable of
making a contract – they were not drunk,
bankrupt, insane, and they were old
enough. There was no duress and
consent was given by signing the
document.
The provision of plumbing services is a
legal activity.
A
M
Two elements
explained. (Some
variation from the
evidence provided
may occur).
Reference must be
made to the
contract in the
resource material.
E
90198 The Market
(c) Identify TWO guarantees the Consumer Guarantees Act 1993
provides for services.
Services are carried out with reasonable skill
and care and no damage is caused.
They will provide what the consumer wants
and that they are fit for the purpose.
The job will be completed within a reasonable
time.
If the price has not been agreed to
beforehand, buyers need only pay what is
reasonable.
A
M
E
Two
guarantees
identified.
(d) The shower mixer unit purchased from Plumbing Suppliers did not
work properly once it was installed. Describe THREE rights Steven
and Rachel have.
A
M
E
The mixer unit should be
Repaired
Replaced
Or a refund provided.
2/3 rights
described.
90198 The Market
(a) Identify the type of competition indicated in the advertisement.
A
Non-price competition
M
E
Correct form
of
competition
(b) Identify TWO advantages and ONE disadvantage of this type of
competition for producers.
Advantages of non-price competition for a
supplier:
Increase the demand for the product/
Increase in sales and profits
Increase in market share
without reducing the price of the product to
compete.
Disadvantages:
Higher selling costs due to increased
advertising.
A
One
advantage
and one
disadvantage
identified.
M
E
90198 The Market
(a) (i) Equilibrium Price
(ii) Equilibrium Quantity
A2
(i) $3000
(ii) 15 spa baths
M
E
Both
correct
(b) (i) Show the change that would occur if Spa Baths were no longer
desirable in a bathroom.
P
A
S
P1
D
D’
Q1
Q
(ii) Label the new equilibrium price (P1)
and (Q1).
M
E
M
E
Demand
curve
shifted left
and labelled
A
correctly
identified
and labelled
90198 The Market
(c) (i) As a result of the change there is now an excess . . .
A1
M1
Supply
E
Correct
term
(ii) Fully explain how the market will react in the situation
identified in (c)(i), to restore equilibrium.
A1
 The decrease in demand will result in an
excess of supply.
 Producers will lower their prices and supply
less.
 As price decreases quantity demanded will
increase.
 Equilibrium will eventually be restored at a
lower price.
M1
Three valid
points.
E
All four
points
90198 The Market
(a) Show the effect of the $1000 subsidy on the market for solar water
heating installation. Indicate the new equilibrium price (P2) and
quantity (Q2) using dotted lines.
A2
Price $
Supply
curve
shifted
down by
$1000
S
5000
4000
S’
3000
P2
2000
D
1000
0
100
200
300
Q2400
500
600
Quantity
M2
Supply
curve
shifted to
down. New
price and
quantity
labelled.
E
90198 The Market
(b) Calculate the change in total revenue as a result of the subsidy.
(Show your working)
Revenue before the subsidy:
$3000 x 300 = $900,000
Revenue after the subsidy:
$3500 x 350 = $1,225,000
A2
M2
E
Correct
calculation
with
working.
Therefore the change is $325,000
(c) State the total amount of subsidy paid by the government?
A
$1000 x 350 = $350,000
Correct
calculation
M
E
90198 The Market
A
M
E
M for 6(a) &
(b), A for 6(c)
90198 The Market
(d) Fully explain why the government provides a subsidy on the
installation of solar water heating.
The government provides a subsidy to
 decrease the costs of production and to
reduce the price to consumers.
 this is to encourage consumers to
purchase more of the good.
 in the case of the installation of solar
water heating, the subsidy is to
encourage more consumers to be less
reliant on other forms of energy to heat
water.
A2
M2
E
A subsidy is
provided to
decrease the
costs of
production
A subsidy is
provided to
decrease the
costs of
production
and reduce
price to
consumers.
As for
Merit plus
relating to
solar water
heating
installation.
90198 Describe the market
JUDGEMENT
Achievement
10 x A or better
Achievement with
Merit
4 x M, and
10 more A, M, E
Achievement with
Excellence
1xE
5 x M, and
10 more A, M, E