Question 21M.3.HL.TZ0.1i
| Date | May 2021 | Marks available | [Maximum mark: 2] | Reference code | 21M.3.HL.TZ0.1i |
| Level | HL | Paper | 3 | Time zone | TZ0 |
| Command term | Calculate | Question number | i | Adapted from | N/A |
Figure 2 illustrates Islandia’s demand (D) for and supply (S) of rice.
Figure 2
The government of Islandia wants to reduce the price of rice by 40 % in order to enable low-income households to buy enough rice to meet their needs. The government decides to achieve this by imposing a maximum price.
Calculate the change in consumer expenditure on rice resulting from the imposition of the maximum price.
[2]
Initial consumer spending = 5 × 200 000 = $1 000 000
New consumer spending = 3 × 100 000 = $300 000
Any valid working (initial or final consumer expenditure) is sufficient for [1].
= –$700 000 (i.e. a decrease)
An answer of 700 or 700 000 without any valid working is sufficient for [1].
For full marks to be awarded the response must provide valid working and include correct units.
NB OFR applies where a candidate has identified the maximum price incorrectly in part (g). Examiners should not penalize twice for the absence of a negative sign (i.e. in both parts h and i).
Although most candidates calculated the initial level of consumer expenditure accurately, it was common for candidates to identify 300 000 as the new quantity purchased. While this would be the correct quantity demanded it cannot be purchased as only 100 000kg of rice would be supplied. Many candidates neglected to specify a negative change.
