2024 NJC Prelims H1 Econs (A)

© NJC 2024 9570/01/Sep/24 NJC 2024 SH2 H1 Econs P1 Suggested Answers Case Study Question 1 Suggested Answers (a) With reference to Extract 1 and using Price Elasticity of Demand (PED), explain the impact on consumers’ food expenditure as a result of the climate change. [4] • Climate change has destroyed food crops. Thus, the supply of food has decreased. [1] • The decrease in supply of food would cause an increase in the price of food. [1] • Food has high degree of necessity. Therefore, |PED| < 1. [1] • Given |PED| < 1, the increase in price of food would cause an increase in consumer expenditure on food. [1] (b) With reference to Extract 1, explain the reason for the increase in consumption for animal - based proteins in developing countries. [2] • In developing countries, animal-based proteins are considered normal goods. [1] • When there is economic growth, households have higher income thus there is an increase in demand for animal-based proteins. [1] (c) With reference to Extract 2, explain why there is “a downward trend in meat-eating but figures are still high” (Extract 2). [4] • “The recent development of plant -based meat” (Extract 2) led to a decrease in the prices of plant-based meat. [1] • Plant-based meat is considered substitute in consumption to meat. [1] • When prices of plant-based meat decrease, there is a decrease in demand for meat, hence explaining the downward trend. [1] • Nevertheless, “the figures are still high” because there is a lack of / weak public support (Extract 2) due to “cultural habits” (Extract 2), thus the decrease in demand is insignificant. [1] (d) With reference to Extract 3, (i) and using a demand and supply diagram, explain how the Environmental Land Management Schemes (ELMS) boost UK farmers’ income as a result of doing the right thing for the environment. [4] • “Do the right thing for the environment, for example looking after hedgerows, grasslands and soils / large -scale rewilding projects / natural flood management, wetland restoration and enhancing forest (Extract 3), would increase the cost of food production to UK’s farmers. The increase in cost of production would reduce the income of UK’s farmer. [1] • Government payments via the ELMS help lower the cost of food production when the farmers adhere to the higher environmental standards. This would increase the production of food as illustrated by the shift of the