Driverless cars and advances in technology It is predicted that driverless cars, powered by electricity, will be on the roads by 2030. Driverless cars have already been tried out on the roads in some cities, including Pittsburgh in the USA. It is thought that driverless cars will reduce accidents, will have lower repair costs and will create less pollution. At first, the supply of driverless cars may exceed the demand, but it is expected that they will soon grow in popularity. As more driverless cars come into use, the demand for bus travel and petrol stations may decline, and some taxi drivers may be made redundant. In contrast, the increased access to transport that driverless cars will give to people, including the elderly, is likely to increase demand for out of town restaurants and places of entertainment. It has been forecast that the technology being developed in connection with driverless cars will make the supply of them elastic. It is predicted that an 8% rise in the price of driverless cars would cause a 20% rise in the quantity supplied. Advances in technology and the replacement of workers by machines are forecast to destroy 80 million jobs in the USA. Job losses are also forecast in other countries and trade unions are likely to be less able to resist these due to a fall in membership and governments reducing the power of trade unions. Among the jobs thought to be at risk are accountants, train drivers and financial advisers. Demand for workers in other occupations, including doctors and dentists, may increase but there is a risk that unemployment may rise. The more educated workers are, the more easily they can move from one occupation to another. Table 1.1 shows education spending as a percentage (%) of GDP and the unemployment rate in selected countries. Table 1.1 Education spending and the unemployment rate in selected countries Country | Education spending as a % of GDP | Unemployment rate (%) ---|---|--- Argentina | 5.3 | 8.0 Brazil | 5.8 | 13.5 Ghana | 6.5 | 12.0 New Zealand | 7.3 | 4.8 South Africa | 6.0 | 26.0 USA | 8.2 | 4.7 Jobs selling houses and flats may decline but it is expected that the demand for building workers may increase. Some people welcome house building in their area but others oppose it.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2019). The mark or mark type is shown in brackets.

1. [2] (a) Driverless cars and bus travel
2. [2] (a) Driverless cars and taxi travel
3. [2] (a) Bus travel and taxi travel
4. [2] (a) Machines / advanced technology and workers
5. [1] (b) No
6. [1] (b) supply is expected to exceed demand
7. [2] (c) 2.5
8. [1] (c) Correct working: 20% / 8% OR 20 / 8
9. [1] (d) accidents
10. [1] (d) people are injured and killed as a result of other people's driving / accidents impose costs on hospitals and healthcare / less human error / driverless cars reduce the death rate / accidents can cause traffic congestion / fewer accidents may reduce cost of repairs
11. [1] (d) pollution
12. [1] (d) cars emit carbon dioxide / pollution causes health problems / driverless cars are more environmentally friendly / use electricity which causes less pollution
13. [1] (d) lower cost of insurance to (other) drivers
14. [1] (d) as a result of less accidents / lower cost of repairs
15. [1] (e) Expected relationship – a country that spends more (a high proportion) of their GDP on education would have a low unemployment rate / a country with a higher unemployment rate is likely to spend less on education / it is an inverse relationship.
16. [1] (e) Reasons for expected relationship – workers would be likely to be more skilled and productive / higher unemployment may result in less tax revenue to spend on education.
17. [1] (e) Evidence in support of expected relationship – e.g. New Zealand or US
18. [1] (e) highest spenders and lowest unemployment rates.
19. [1] (e) Evidence against expected relationship - e.g. Argentina or South Africa
20. [1] (e) Argentina spends a lower proportion than Ghana and Brazil but has a lower unemployment rate / South Africa spends more a higher proportion than Argentina and Brazil but has a higher unemployment rate.
21. [1] (f) House building may create jobs
22. [1] (f) lower unemployment
23. [1] (f) generate income / raise wages / raise living standards
24. [1] (f) House building will increase the supply of housing
25. [1] (f) the lower price of housing
26. [1] (f) makes houses more affordable
27. [1] (f) fewer homeless
28. [1] (f) May attract more firms to set up in the area
29. [1] (f) more services may be provided
30. [1] (f) due to more people living in the area / larger labour force
31. [1] (f) May save travel time for those working nearby
32. [1] (f) reduce pollution / congestion
33. [1] (f) House building may cause external costs
34. [2] (f) examples (e.g. noise, disruption, visual pollution)
35. [1] (f) More houses may reduce the value of people's homes
36. [1] (f) reduce their wealth
37. [1] (f) There is an opportunity cost
38. [1] (f) the area used could have been used for e.g. school buildings
39. [1] (f) Demand for extra services may not be met
40. [1] (f) Jobs may only be temporary / seasonal unemployment
41. [1] (f) More housing may create overcrowding in the area.
42. [1] (g) Fall in membership
43. [1] (g) lower funds / less bargaining power
44. [1] (g) Rise in unemployment / workers being replaced by machines
45. [1] (g) trade unions may be reluctant to take industrial action for fear that members will be replaced by unemployed / non-member workers
46. [1] (g) Government may reduce the power of trade unions
47. [1] (g) making it harder for trade unions to protect workers' rights
48. [1] (g) Movement from primary to tertiary sector
49. [1] (g) which may be less unionised / better working conditions
50. [1] (h) Output is likely to fall
51. [1] (h) incomes will decline / poverty increase
52. [1] (h) living standards will fall
53. [1] (h) lower total (aggregate) demand
54. [1] (h) Tax revenue will fall
55. [1] (h) government may have to cut spending on e.g. education and healthcare
56. [1] (h) Government may increase tax rates
57. [1] (h) which may create disincentive effect
58. [1] (h) The government will have to spend more on unemployment benefit
59. [1] (h) this will involve an opportunity cost
60. [1] (h) may result in a budget deficit
61. [1] (h) Unemployed workers may lose skills / become out of date
62. [1] (h) may need retraining
63. [1] (h) May increase emigration
64. [1] (h) lose skilled workers
65. [1] (h) May cause social problems e.g. crime / mental health problems
66. [1] (h) Inflation may fall
67. [1] (h) due to lower total (aggregate) demand
68. [1] (h) Firms may find it easier to recruit new workers
69. [1] (h) this will make it easier to expand
70. [1] (h) at lower wage costs
71. [1] (h) Productivity may be higher
72. [1] (h) more skilled workers kept
73. [1] (h) Unemployment may give the unemployed time to search for a better job
74. [1] (h) eventually raises their incomes
75. [1] (h) Rise may only be temporary
76. [1] (h) May reduce demand for imports
77. [1] (h) improve current account of the balance of payments
78. [1] (h) May be less pollution with lower output