Fig. 1.1 is a table of annual insurance premiums for motor cars based on occupation. Occupation Motor racing driver Footballer Student Machinist Farmer Lawyer Teacher Annual premium $2000 $1900 $1300 $1000 $800 $600 $400 [Figure 1.1] Use Fig. 1.1 to help you answer the following questions.

Mark scheme

Marking points from the official mark scheme (May/June 2022). The mark or mark type is shown in brackets.

1. [1] Payment for insurance cover/used to buy insurance/used to buy a policy/cover against risk/amount given by insured to insurer
2. [1] Machinist
3. [2] Inexperience (1) younger drivers less able to judge speeds / road conditions (1)
4. [2] Age (1) younger drivers more likely to be involved in an accident compared to older drivers (1)
5. [2] More likely to take risks/driving at night (1) e.g. cutting in and out of traffic / driving too fast / use of drink/drugs / more likely to get into accidents (1)
6. [2] More easily distracted while driving (1) e.g. use of mobile phone / friends in car / selecting music to play (1)
7. [2] Value/type/model of motor (student may only afford low value) (1) the greater the value, the higher the premium (1)
8. [2] Age of motor (student may only afford older/cheaper) (1) the newer the motor, the higher the premium (1)
9. [2] Size of car (1) bigger the engine, the higher the premium (1)
10. [2] Cost of repairs (1) a more valuable motor is more expensive to repair (1)
11. [2] District where motor is driven/stored (1) e.g. an accident 'blackspot' / high crime area would increase the premium (1)
12. [2] Past record of driver (1) e.g. previous accidents or driving offences would increase the premium (1)
13. [2] Previous claims made (1) the more claims, the higher the premium (1)
14. [1] Yes – become more skilled/greater knowledge/more experience (1) perform better/at what they are good at (1) becomes an expert (1) less chance of unemployment (1) may get a better job/promotion (1) may receive higher pay (1) increases efficiency/output (1) less time wasted (1) produces higher quality (1) reduces costs/wastage/less errors (1) leads to economies of scale (1) increases economic growth (1)
15. [1] No - can become bored (1) less quality (1) less job satisfaction (1) feel less valued (1) can face being unemployed / less job security if skills are no longer required (1) if worker is absent, affects output (1)
16. [1] An increased number of motor vehicles is a cause of global warming.
17. [1] Imported car parts will often be stored in a manufacturer's warehouse.
18. [1] Direct debit: Saves time and effort as there is no need for Khalid to worry about remembering to pay his premium
19. [1] Direct debit: Loss of personal control over bank account as insurance company might take more than expected in a payment
20. [1] Direct debit: Khalid must have sufficient funds in his account to meet the direct debit payment or he will have to pay bank charges
21. [1] Direct debit: Most insurance companies will offer a discount for paying by direct debit however, some insurers might add an extra fee for monthly payments and charge interest, adding to Khalid’s costs.
22. [1] Credit card: Free credit is obtained by Khalid for at least a month, so he buys the insurance without paying for it immediately
23. [1] Credit card: By paying the credit card in advance, the debt has been cleared
24. [1] Credit card: Interest to be paid if the credit card balance is not paid off in full which can make it more costly if Khalid does not repay on time however, he will control how and when he repays the credit provider
25. [1] Credit card: Some credit cards offer a 0% interest period that effectively lets Khalid borrow for free, providing that he meets his payment at the end of the period
26. [1] Credit card: Can receive reward points on some credit cards, which can be useful to make other purchases
27. [1] Credit card: Credit cards can make life easier, but they can also make overspending easier which can lead to debt
28. [1] Credit card: Credit cards, unlike direct debit, can be stolen and used to steal money from the holder and/or for identity fraud.
29. [1] Evaluation: Khalid will usually pay less for car insurance if he can afford to pay in advance for the entire year, using his credit card, especially with a 0% interest credit card. By doing so he can benefit from the discount most insurers offer to those that pay in full, and then repay the credit card balance before the end of the 0% offer period. But with so many other costs to deal with, he may still prefer to pay for his car insurance in more manageable, monthly direct debit payments, especially from an insurance company who does not charge extra for direct debit.