Fig. 1.1 shows the percentage of output produced by different activities in country A. Agriculture: 27% Manufacturing: 10% Services: 63% [Figure 1.1 Country A's industrial activities] Use Fig. 1.1 to help you answer the following questions.

Mark scheme

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

1. [3] (a) Services: Tertiary; Manufacturing: Secondary; Agriculture: Primary
2. [2] (b) Yes - Allows more services available to local people (1) increases their standard of living (1) increases efficiency (1) leading to greater output (1) lower/reduced costs (1) better quality/fewer mistakes (1) leads to economies of scale (1) increases employment (1) more services, such as tourism are attracted (1) as more services are exported (1) to new markets (1) improved balance of payments (1) leads to greater development of country (1) more income/revenue (1) increases foreign currency (1) greater GDP (1). No - It may be too dependent on services (1) lack of agriculture to feed the population (1) lack of industry to produce goods (1) which means more imports (1) imports likely to be more expensive (1) if world demand for services falls / if services can be bought more cheaply abroad (1) workers risk losing jobs (1)
3. [2] (c)(i) A business with its head office/mother branch in one country (1) that has operations (factories/shops/branches) in other countries/in more than one country (1)
4. [4] (c)(ii) Air pollution/pollute the air (1) gases/carbon dioxide/exhaust fumes (1) resulting in health issues (1) causing e.g. respiratory problems (1). Climate change (1) pollutes the environment (1) global warming (1). Noise/sound pollution (1) increasing noise levels (1) e.g. engine noise/car horns (1) traffic congestion (1). Visual/land pollution (1) litter on roads (1) e.g. abandoned vehicles (1) causing nuisance (1)
5. [2] (d) An important factor affecting the location of mining companies is a good transport network. A fixed asset of a mining company is land
6. [6] (e) Advantages: Provide jobs – so reduce country's unemployment; Offer training to local workers – increase skills; Multiplier effect on economy – opportunities for new businesses to set up; Provide goods e.g. oil – not available in the country; Improve infrastructure - such as better roads; Attract investment – pays for imports; Increase competition – lower prices for consumers / impact on local businesses; Nearness to local markets – lower transport costs; Can increase sales - to new markets; Higher profile – greater recognition; Low labour costs – lower wage rates; Government incentives – e.g. subsidies; Lower taxes - e.g. zero tax rates; Avoid trade barriers – e.g. customs duties.
7. Disadvantages: MNC may exploit natural resources of a country - once resources are dried up the MNC may move on leaving the country without these resources, and sometimes pollution is left behind; MNC may pay higher wages than local businesses so it might attract the best of the local labour – entice people away from primary occupations so that there is less production for local needs; MNCs often bring in employees from other parts of the world, usually managers - and the local people can be left with the lower paid jobs; Profits often leave the host country going back to the MNC's home country - thereby reducing foreign currency reserves; Local firms can go out of business as they cannot compete with the economies of scale MNCs can achieve; Poor communication; Control/coordination - increases costs; Supply chain issues – increased risks of delivery; Extra costs – e.g. language, training local workers.
8. Evaluation: Some criticisms of MNCs may be due to other issues, such as governments failing to regulate pollution, and local firms may also be causing pollution. MNCs may pay low wages but, that may be better for the economy than high unemployment. Some MNCs respond to concerns about working conditions and levels of pollution and improve them, even set standards that local firms might struggle to achieve. It may be that a country's government has to decide whether the advantages of a MNC are greater than the disadvantages specific to that country's needs. Generally, MNCs tend to provide work for local people which helps to improve their standard of living which is a definite advantage.