Refer to Appendix 2.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2014). The mark or mark type is shown in brackets.

1. [4] (a)(i) Content: More labour available for other sectors; Less agricultural output and other raw materials e.g. rubber; More import of food products; Rising food prices; Increased demand for higher wages due to rising food prices. The marks available for this question are as follows: 2 marks for knowledge and 6 marks for explanation/analysis. 1 mark for each effect identified – 1 mark for recognising the change in the figures – Up to 2 further marks are available for explaining the effect on businesses in Country Z. 1 knowledge mark + up to 3 explanation marks (4 marks × 2) Effect: More labour available for other sectors (1 mark for knowledge). Developed explanation: More labour available for other sectors (1) because workers leave the farms and move to the cities in search of work (2). ACE could find it easier to recruit workers to work in its factory making ovens (3). Output and exports of manufactured products are likely to increase in Country Z (4).
2. [4] (a)(ii) Content: More manufacturing output; Wages rising in secondary sector jobs; Increased customers from restaurants or hotels; More domestic products available; Increased exports. The marks available for this question are as follows: 2 marks for knowledge and 6 marks for explanation/analysis. 1 mark for each effect identified – 1 mark for recognising the change in the figures – Up to 2 further marks are available for explaining the effect on businesses in Country Z. 1 knowledge mark + up to 3 explanation marks (4 marks × 2) Effect: More manufacturing output (1 mark for knowledge). Developed explanation: More manufacturing output (1) means there is more activity in secondary sector which might be due to increased demand for locally produced goods or increased investment (2). This could lead to a rise in GDP or employment in the secondary sector in Country Z (3). For businesses like ACE, this could mean an increase in the availability of skilled labour if people move from agriculture, but also potentially higher wage costs due to increased competition for workers (4).
3. [12] (b) Content: Unemployment rises in country X – demand lowers in overseas market as incomes fall - sales revenue falls. Subsidies introduced for domestic businesses in country X – prices of domestically produced ovens reduce – may be more competitive with imported ovens decrease sales revenue. Accept – recognising subsidies could be for restaurants, therefore increased demand for ovens. Also accept relocation to country X for ACE to benefit from subsidies. Country X's currency depreciates– imports become more expensive – ACE find it more difficult to sell their ovens sales reduce as less competitive – unless ACE sell higher quality ovens or have no domestic competitors. Level 1: 1 mark for each statement e.g. ACE will sell fewer ovens as they are less competitive (1 mark). Level 2: 5 marks for the first level 2 answer and then one extra mark for each additional level 2 answer up to maximum of 10 marks e.g. the price of ACE ovens increases due to the exchange rate depreciation in country X and so ACE products will be less competitive against domestically produced ovens. (L2) This will mean that sales of ACE ovens will fall and so will profits. This is assuming there are domestically produced ovens otherwise it may not be that important to ACE (L2). 6 marks for 2 × level 2 answers plus one application mark for answering in the context of making ovens. Level 3: Judgement of how important each change is to ACE when increasing its exports. Possible application marks: ovens; components; rubber seals; electrical components; restaurants and hotels; financial information in Appendix 1; country Z. There may be other examples in context which have not been included here. Application Level 2: 2 marks, Well applied to case. At least two examples of reference to, or use of, the case. Level 1: 1 mark, Limited application to the case. At least one example of reference to, or use of, case. Knowledge/Analysis/Evaluation Level 2: 5–10 marks, Good discussion of the effect of each of the changes (1 x L2 can be awarded for each change if not directly referring to the effect on ACE). Good discussion of the effect on ACE of each of the changes. (1 or 2 × L2 can be awarded for each change directly referring to the effect(s) on ACE). Judgement of how important each change is to ACE when increasing its exports. Level 1: 1–4 marks, Effects of each of the changes listed.