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Bananas are the most popular fruit in New Zealand. ...
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New Zealand is considered to be a price taker in the banana market.
Source of data (adapted): https://trendeconomy.com/data/h2/NewZealand/0803
Explain why New Zealand imports bananas.
The world price of bananas has increased over the last two years due to labour shortages, supply chain issues, and disease affecting some banana plantations.
On Graph One below, show the impact of a higher world price for bananas on imports. Label the new level of imports as M1.
Referring to Graph One, explain the impact of the higher world price for bananas on the level of imports and the revenue gained by New Zealand banana growers.
Due to changes in the climate, some growers say that in the future it might be possible for New Zealand to be an exporter of bananas. One suggestion is that the Government could encourage domestic production through protecting local producers.
Give an example of a method the Government could use to protect local banana growers, and explain how it would encourage the domestic production of bananas.
Method of protecting local producers:
How it would encourage the domestic production of bananas:
Explain one reason why the New Zealand Government is unlikely to protect local banana growers.
New Zealand and the United States both produce beef. Nearly all New Zealand production is grass-fed beef, whereas most of the United States production is grain fed.
The trade price for grass-fed beef is shown as Pt on Graph Two, below.
The demand for grass-fed beef is growing strongly in the United States due to the perceived health and environmental benefits.
On Graph Two above, show the impact of increased demand in the United States market for grass-fed beef. Label the new level of exports as X1 and imports as M1.
Referring to Graph Two above, explain the impact of the increased demand in the United States market for grass-fed beef on the level of exports and export receipts for New Zealand grass-fed beef.
Compare and contrast the impact of the higher demand in the United States market on New Zealand households that are consumers of beef and New Zealand households that have workers involved in beef production.
Apart from machinery, identify one of New Zealand’s top five imported goods
On Graph Three below, show the impact on the exchange rate of a large increase in New Zealand imports of machinery from the United States.
Explain the impact on the exchange rate of a large increase in New Zealand’s imports. Refer to Graph 3 in your answer.
Compare and contrast the impact of the change in the exchange rate shown on Graph Three on:
New Zealand businesses in the tourism industry and New Zealand businesses that import consumer goods from the United States.
New Zealand households with workers in the dairy farming industry and New Zealand households who intend to purchase a new car from the United States.