Assessment Report

Level 1 Economics 2021

Standards 90983  90985 90986

 

Part A: Commentary

Inadequate graph work continues to be an issue for many candidates. Demand, supply, and market equilibrium graphs need accurate and sufficient labelling, and these labels should be specifically referred to when completing written explanations. Relevant economic concepts, especially those that are mentioned in the question, should be defined and applied to the given context.

 

Part B: Report on standards

90983:  Demonstrate understanding of consumer choices, using scarcity and/or demand     

Examinations 

Each standard will consist of questions requiring written answers and / or sketch diagrams and graphs.

The examination consisted of three questions, candidates were required to respond to all three.

Question one required candidates to construct a demand curve, illustrate and explain the reasons for a change in the quantity demanded, and explain the flow-on effects of this change.

Question two required candidates to explain consumer choice by referring to the concepts of limited resources, scarcity, opportunity cost, values, conflict, and compromise.

Question three required candidates to explain and apply the concept of luxury and inferior goods in the context of a change in demand for music apps, and explain relevant flow-on effects.

All three questions required written answers and graph work and were scaffolded by breaking the question down into several parts, which covered the requirements of the assessment specifications. Candidates were expected to incorporate relevant demand and scarcity concepts, resource material and changes made to demand curves in their written answers.

Observations 

A significant number of candidates still do not refer to the graphs when explaining changes in demand. Comments such as "as can be seen on the graph" were common but are not sufficient – a direct reference to the graph is required. Likewise, when shifting the demand curve, a new label, e.g. D1, is required so the movement from D to D1 can be referred to in subsequent questions. Many candidates did not attempt an explanation of the income and substitution effects of a price change.

Grade awarding 

Candidates who were awarded Achievement commonly:

  • defined key terms such as the law of demand, scarcity, opportunity cost
  • constructed accurate graphs and used them to to differentiate between a change in quantity demanded and a change in demand
  • identified flow-on effects and compromises, without fully explaining them.

Candidates whose work was assessed as Not Achieved commonly:

  • did not attempt questions (or parts of questions)
  • did not construct a demand curve from given data
  • did not link the ideas of scarcity and opportunity cost
  • used incomplete definitions of inferior and luxury goods
  • did not identify relevant flow-on effects from a change in price and / or demand.

Candidates who were awarded Achievement with Merit commonly:

  • made specific reference to the data when explaining a change in the quantity demanded
  • explained the income or substitution effect of a price decrease
  • gave a clear example of an opportunity cost, based on the resource material
  • explained inferior and luxury goods in the context of the resource material
  • developed their flow-on effects beyond the initial impact of the price and / or demand change.

Candidates who were awarded Achievement with Excellence commonly:

  • fully explained flow-on effects, developing them at least two steps beyond the impact of the initial change in price / demand
  • used the resource material given to develop full explanations
  • explained the income AND substitution effect of a price decrease
  • fully explained two compromises in terms of the values stated.

 


90985:  Demonstrate understanding of producer choices using supply

Examinations 

Each standard will consist of questions requiring written answers and/or sketch diagrams and graphs. To assist candidates, questions may be scaffolded. This scaffolding could mean that a question is broken into several parts and/or bullet points.

The examination consisted of three questions of which candidates were required to respond to all three.

Question one required candidates to construct a supply curve, illustrate and apply the law of supply and explain the concept of ceteris paribus using relevant examples (in the context of the supply of hand sanitiser).

Question two required candidates to illustrate and explain the impact of technology on the supply of hand sanitiser, and also explain a flow-on effect of this change in supply.

Question three focused on the impact of a change in the price of hand sanitiser on the supply of a related good (liquid soap).

All three questions required written answers and graph work. Questions one and three were scaffolded by breaking the question down into several parts, whereas question two was scaffolded by using bullet points. Both types of scaffolding covered the requirements of the assessment specifications.

Candidates were expected to incorporate relevant supply concepts, resource material, and changes made to supply curves in their written answers.

Observations 

Many candidates included inadequate profitability explanations. Relevant economic terms should be used when explaining increases or decreases in profit, e.g. rise in productivity which reduces the cost of production. Candidates need to carefully read the entire question to ensure all of the requirements are covered in their answer.

Grade awarding 

Candidates who were awarded Achievement commonly:

  • constructed and sketched accurate graphs
  • included some relevant economic concepts and terminology
  • addressed the requirements of the questions.

Candidates whose work was assessed as Not Achieved commonly:

  • did not attempt all the questions and / or the requirements of the question
  • included an inappropriate demand perspective
  • did not provide relevant evidence to meet the requirements of the question.

Candidates who were awarded Achievement with Merit commonly:

  • used correct terminology consistently
  • showed their understanding of links between concepts
  • applied the relevant context.

Candidates who were awarded Achievement with Excellence commonly:

  • provided extensive and complex multi-faceted explanations
  • included relevant examples to explain their points.
  • integrated accurate and relevant economic terminology.

 


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

Examinations 

Each standard will consist of questions requiring written answers and / or sketch diagrams and graphs. To assist candidates, questions may be scaffolded. This scaffolding could mean that a question is broken into several parts and / or bullet points.

The examination consisted of three questions of which candidates were required to respond to all three.

Question one required candidates to complete a market equilibrium graph, illustrating a surplus, and use the concept of market forces to explain how equilibrium would be restored.

Question two required candidates to illustrate and explain the impact of a subsidy, including performing relevant calculations and explaining flow-on effects.

The focus of question three was a maximum price control, requiring candidates to illustrate and explain the impact on the NZ market for routers, including the impact on price, quantity demanded, and consumer spending.

All three questions required written answers and graph work and were scaffolded by breaking down the question into several parts, which covered the requirements of the assessment specification. Candidates were expected to incorporate relevant market equilibrium concepts, calculations, and changes made to market equilibrium graphs in their written answers.

Observations 

Incorrect or insufficient graph labelling was an issue for many candidates. Arrows, dotted lines, and labels should be included where relevant. The labelling of shortages and surpluses should be precise, and candidates need to check the scales and units used in questions to ensure graph references in written explanations are accurate. The use of incorrect terminology (e.g. referring to changes in supply rather than quantity supplied) was common as was inadequate wording for describing changes in economic variables. Words such as increase / greater or decrease / decline should be used to clearly indicate the direction of the change.

Grade awarding 

Candidates who were awarded Achievement commonly: 

  • used correct graphing conventions (e.g. labelling new curves and axes, arrows)
  • gave correct definitions of economic terms (e.g. surplus, shortage) and used accurate economic terminology
  • specified the type of change (e.g. increase or decrease in consumer spending or producer revenue)
  • were able to perform some correct calculations
  • did not reference the graphs and/or include relevant data in their writing
  • lacked detail in their answers.

Candidates whose work was assessed as Not Achieved commonly:

  • did not attempt all the questions
  • misread the question and therefore did not give answers relating to the question (e.g. for Q1 explained how a shortage was formed, rather than how to restore equilibrium)
  • did not use the correct terminology and./.or definition
  • did not perform calculations
  • did not interpret, complete, or explain graphs (including relevant numbers)
  • did not understand basic economic concepts such as surplus, shortage, subsidy, and complements
  • inaccurately drew and / or labelled their graphs.

Candidates who were awarded Achievement with Merit commonly:

  • applied the laws of demand and supply
  • used accurate economic terminology
  • gave accurate flow-on effects in context of the question
  • included graph references in their answer
  • wrote full explanations but often missed out some detail or calculation
  • could explain the market forces that would restore equilibrium, e.g. explaining producers lower the price, leading to increase in QD and decrease in QS
  • correctly calculated changes to price, consumer spending, and producer revenue as a result of a subsidy
  • explained changes on their graph and data as increases and decreases.

Candidates who were awarded Achievement with Excellence commonly:

  • explained reasons relating to consumer / producer behaviour, such as profitability and affordability
  • integrated accurate data and graph references to support their answers
  • provided clear flow-on effects with explanations
  • referenced the graphs and data in explanations
  • answered all aspects of the questions.

Economics subject page

Previous years' reports

2020 (PDF, 339KB)

2019 (PDF, 239KB)

2018 (PDF, 97KB)

2017 (PDF, 46KB)

 
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