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O-LevelCommerceGlobal trade7100/22 · May/June 2024 · Q413 Marks

Fig. 4.1 shows a map of two countries, country X and country Y, and their two ports. Ferries operate between the two ports. [Figure 4.1] Use Fig. 4.1 to help you answer the following questions.

  1. (a)State one benefit of using ferries to transport freight between ports.[1]
  2. (b)Describe one service provided at ports for shipping companies.[2]
  3. (c)(i)Define quota.[1]
  4. (c)(ii)Do you think it is a good idea for a country to impose trade restrictions, such as quotas? Give reasons for your answer.[3]
  5. (d)Evaluate the benefits to country Y of joining a trading bloc.[6]

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Mark scheme

Marking points from the official mark scheme (May/June 2024). The mark or mark type is shown in brackets.

  1. [1] (a) Speed/efficient/quick turnaround of vehicles/cargoes
  2. [1] (a) Ease of loading/unloading
  3. [1] (a) Can carry bulky goods/large quantities/heavy goods
  4. [1] (a) Can carry a variety of cargo
  5. [1] (a) Less handling / protects against theft / damage
  6. [1] (a) Cheap/fewer costs
  7. [2] (b) 1 mark for service and 1 mark for linked description
  8. [1] (b) Clear waterways/marked channels (1) providing safe access
  9. [1] (b) Tugs/pilots (1) to move ships
  10. [1] (b) Wharves/cranes (1) to load/unload cargo
  11. [1] (b) Container terminals (1) to handle containers coming into port
  12. [1] (b) Loading/unloading containers (1) to be taken off / put on ship
  13. [1] (b) Warehousing (1) for storage / safekeeping
  14. [1] (b) Bonded warehouses (1) controlled by customs / storage of dutiable goods
  15. [1] (b) Repair facilities (1) with wet/dry docks
  16. [1] (b) Fuel (1) to service vessels
  17. [1] (b) Transport infrastructure (1) for connections to road/rail links
  18. [1] (b) Parking area (1) for cars/trucks
  19. [1] (b) Security (1) e.g. dock police/fire service
  20. [1] (b) Customs (1) to collect duties / to prevent smuggling
  21. [1] (c)(i) A limit on the number of goods that are allowed to be imported into a country or exported out of a country / limit on imports / limit on exports
  22. [3] (c)(ii) Up to 3 marks for justified reasoning of yes and/or no responses.
  23. [1] (c)(ii) Yes - to prevent dumping of goods
  24. [1] (c)(ii) selling goods below cost in home market
  25. [1] (c)(ii) creating unfair competition
  26. [1] (c)(ii) To protect against unemployment
  27. [1] (c)(ii) from cheap imports
  28. [1] (c)(ii) To protect infant industries / local businesses
  29. [1] (c)(ii) which are not yet established
  30. [1] (c)(ii) so that they can grow / compete in the world market
  31. [1] (c)(ii) To gain revenue from tariffs
  32. [1] (c)(ii) which can be spent on infrastructure
  33. [1] (c)(ii) e.g. new roads/healthcare
  34. [1] (c)(ii) Can use embargoes
  35. [1] (c)(ii) to prevent the entry of harmful/dangerous/demerit goods
  36. [1] (c)(ii) such as guns
  37. [1] (c)(ii) Trade restrictions have a favourable effect on the balance of payments of the importing country
  38. [1] (c)(ii) they reduce imports and increase the export surplus
  39. [1] (c)(ii) so can improve a deficit in the balance of payments
  40. [1] (c)(ii) putting a country in a stronger financial position better economic growth
  41. [1] (c)(ii) No – Some countries without resources are unable to produce goods and services
  42. [1] (c)(ii) e.g. due to climate / lack of raw materials
  43. [1] (c)(ii) so have to depend entirely on imports
  44. [1] (c)(ii) International trade provides a wider variety of goods/services
  45. [1] (c)(ii) leading to more choice for consumers
  46. [1] (c)(ii) thereby improving their standard of living
  47. [1] (c)(ii) Helps to develop the economy
  48. [1] (c)(ii) with more jobs
  49. [1] (c)(ii) less unemployed
  50. [1] (c)(ii) May lead to retaliation
  51. [1] (c)(ii) bad relations
  52. [1] (c)(ii) by a country imposing taxes on another country's exports
  53. [6] (d) Up to 2 marks for describing benefits to Country Y of joining a trading bloc
  54. [6] (d) Up to a further 2 marks for analysing benefits to Country Y of joining a trading bloc
  55. [6] (d) Up to a final 2 marks for evaluating benefits to Country Y of joining a trading bloc
  56. [6] (d) A trade bloc is a group of countries joined together through a trade agreement.
  57. [6] (d) Increased trade / economic growth with access to larger markets
  58. [6] (d) Wider choice / better quality of goods for consumers by obtaining goods not locally available / goods move freely between member countries
  59. [6] (d) No tariffs so there is free trade
  60. [6] (d) Competitive/cheaper prices as Country Y can take advantage of cheaper raw materials
  61. [6] (d) Economies of scale with mass production / free movement of goods
  62. [6] (d) More jobs with free movement of labour / increased GDP / opportunity to set up factories in other member countries
  63. [6] (d) Standardisation of measures/documents (possibly currency) making it easier to sell to other countries
  64. [6] (d) Travel costs may be reduced with less bureaucracy / same currency
  65. [6] (d) Financial aid e.g. for infrastructure projects / areas of poverty
  66. [6] (d) Improves political relationships leading to peace between nations
  67. [6] (d) Foreign investment may increase standard of living / level of employment
  68. [6] (d) Evaluation: Trading blocs have many advantages in enabling free trade between geographically close countries. This can lead to lower prices, increased export potential, higher growth, economies of scale and greater competition. However, these advantages can be outweighed by losing some political sovereignty. Also, the move to free trade tends to create winners and losers, with some domestic industries losing out to lower-cost imports. Country Y will have to decide if the advantages outweigh the disadvantages.

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About this question

Topic
Global trade, O-Level Commerce (syllabus 7100). Structured question, 13 marks.
Source
O-Level Commerce, May/June 2024 Paper 2 Variant 2, question 4.

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