In recent years productivity growth has been low in Brazil, which has kept average costs relatively high. Some economists claim this low growth in productivity is due to protectionism. The Brazilian Government imposes high tariffs on a range of imports, including smartphones; it argues that such protectionism saves Brazilian jobs.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2016). The mark or mark type is shown in brackets.

1. [2] (a) Output per worker/factor (1) hour/time period (1). Note: second mark is dependent on the candidate gaining the first mark. A measure of efficiency (1).
2. [4] (b) Average fixed cost is total fixed cost divided by output/fixed cost per unit (1) costs that fall with output/may be illustrated on a diagram/example of a fixed cost (1). Average variable cost is total variable cost divided by output/variable cost per unit (1) costs that may fall or rise with output/may be illustrated on a diagram/example of a variable cost (1).
3. [6] (c) Output/GDP/GDP per head may be higher (1) resulting in higher living standards (1) as a country can concentrate on what it is best at producing (1) make best use of resources (1). Providing a product in a large quantity (1) may lower average cost/ enable advantage to be taken of economies of scale (1) example of an economy of scale (1). World demand for smartphones is high/increasing (1) smartphones are increasing in popularity/becoming more of a necessity (1). May gain a good reputation for producing the product (1) which will increase demand (1). Specialising encourages countries to trade (1) providing consumers with more variety/cheaper products (1). Reward but do not expect analysis of comparative advantage.
4. [8] (d) Up to 5 marks for why it might: Tariffs raise the price of imports (1) quotas places a limit on imports/other method of protectionism described (1) higher price of imports/lower quantity (1) may make imports less competitive (1) consumers may switch from imports to domestic products/reduce quantity of imports produced (1) maintain domestic production (1) stop unemployment occurring in domestic firms (1). Protectionism may stop declining (sunset) industries closing quickly (1) causing structural unemployment (1). Up to 5 marks for why it might not: Foreign products might still be cheaper (1) better quality (1). There may be retaliation (1) with governments of other countries imposing trade restrictions (1) which may reduce exports (1) causing unemployment in the export industries (1). Tariffs may increase raw material costs (1) domestic firms may have to switch to more lower quality imported raw materials (1) domestic firms' international competitiveness could fall (1) causing unemployment in, e.g. car industry dependent on imported steel (1). Demand for labour may fall for other reasons (1), e.g. introduction of new technology by domestic firms may result in structural unemployment (1). May protect jobs in the home country but create unemployment in other countries (1) by making their products less price competitive (1). Note. if a candidate refers to two or more methods of protection, e.g. tariffs and quotas but does not explain how they work, award only one mark. Note. maximum mark of 4 if there is not an explicit link to jobs.