Jan 2013 Context 2 AQA Econ1
HEALTH AND DIET IN THE UK
Define the term ‘marginal private costs’ (Extract E, line 9).
a) The marginal private cost is the price a producer or consumer must pay in order to
produce or consume an extra unit of a good or service. The marginal private cost does not
take any account of the third party costs of the production/consumption of the good.
Using Extract D, identify two significant points of comparison, over the period
shown, between the annual percentage changes in the shop prices of fruit and
sugars in the UK.
b) One significant point of comparison between the annual percentage change in the shop
prices of fruit and sugars in the UK over the period shown is that the annual percentage
change in the shop price of fruit peaked in 2001 at 8.6% in comparison with the annual
percentage change in the shop price of sugars which peaked in 2011 at 7.5%.
A second significant point of comparison between the annual percentage change in the
shop prices of fruit and sugars in the UK over the period shown is that the annual
percentage change in the shop price of fruit was lowest in 2004 at -2.8% in comparison
with the annual percentage change in the shop price of sugars which was at its lowest in
2000 at 0.7%.
Extract E (lines 12 to 14) states that in ‘the US, subsidies on corn, soya beans
and rice have made the main ingredients used to make processed food cheap
compared to fruit and vegetables’. With the help of an appropriate diagram, explain
how subsidies on ingredients such as corn, soya beans and rice will affect the
market for processed food.
c)
As can be seen in Fig 1, subsidies on ingredients such as corn, soya beans and rice cause
the supply curve to shift right, from S1 to S2. As a result, the price of these ingredients will
fall, from P1 to P2 and therefore this will also reduce the cost of producing processed food
as they are ‘the main ingredients used to make processed food.’ Due to corn, soya beans
and rice being cheaper to obtain, the cost of production of processed food will fall and thus
HEALTH AND DIET IN THE UK
Define the term ‘marginal private costs’ (Extract E, line 9).
a) The marginal private cost is the price a producer or consumer must pay in order to
produce or consume an extra unit of a good or service. The marginal private cost does not
take any account of the third party costs of the production/consumption of the good.
Using Extract D, identify two significant points of comparison, over the period
shown, between the annual percentage changes in the shop prices of fruit and
sugars in the UK.
b) One significant point of comparison between the annual percentage change in the shop
prices of fruit and sugars in the UK over the period shown is that the annual percentage
change in the shop price of fruit peaked in 2001 at 8.6% in comparison with the annual
percentage change in the shop price of sugars which peaked in 2011 at 7.5%.
A second significant point of comparison between the annual percentage change in the
shop prices of fruit and sugars in the UK over the period shown is that the annual
percentage change in the shop price of fruit was lowest in 2004 at -2.8% in comparison
with the annual percentage change in the shop price of sugars which was at its lowest in
2000 at 0.7%.
Extract E (lines 12 to 14) states that in ‘the US, subsidies on corn, soya beans
and rice have made the main ingredients used to make processed food cheap
compared to fruit and vegetables’. With the help of an appropriate diagram, explain
how subsidies on ingredients such as corn, soya beans and rice will affect the
market for processed food.
c)
As can be seen in Fig 1, subsidies on ingredients such as corn, soya beans and rice cause
the supply curve to shift right, from S1 to S2. As a result, the price of these ingredients will
fall, from P1 to P2 and therefore this will also reduce the cost of producing processed food
as they are ‘the main ingredients used to make processed food.’ Due to corn, soya beans
and rice being cheaper to obtain, the cost of production of processed food will fall and thus
