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O-LevelEconomicsThe basic economic problem2281/22 · Oct/Nov 2021 · Q220 Marks

A number of countries, including Morocco, capture water from fog. Water is used in the primary, secondary and tertiary sectors. In recent years, Morocco has increased the quantity and quality of its resources and has moved more of them into the tertiary sector. The quantity, quality and composition of a country's resources are influenced by a number of factors, including its birth rate. Morocco's birth rate fell from 19.9 in 2016 to 18.7 in 2018.

  1. (a)Define a free good.[2]
  2. (b)Explain, with examples, the difference between the secondary sector and the tertiary sector.[4]
  3. (c)Analyse, using a production possibility curve (PPC), the effect of an increase in the quality of its resources on an economy. [Figure 2.1][6]
  4. (d)Discuss whether or not a fall in a country's birth rate will benefit an economy.[8]

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Mark scheme

Marking points from the official mark scheme (Oct/Nov 2021). The mark or mark type is shown in brackets.

  1. [2] (a) No opportunity cost (1) a good that takes no resources/factors of production to produce / naturally abundant in supply / does not use scarce resources (1).
  2. [4] (b) Logical explanation which might include: Secondary sector covers manufacturing (and construction) / converts primary products into finished goods (1) e.g. car industry (1). Tertiary sector covers services / final stage of production (1) e.g. insurance (1). For tertiary sector, it is not sufficient to just have the sector which sells products as this is only part of the sector. But for the tertiary sector example accept the sale of a product e.g. the sale of jewellery.
  3. [6] (c) Up to 4 marks for the diagram: Axes correctly labelled with different outputs (1). Initial curve drawn as a curve / line sloping downward to the axes (1). New curve drawn as a curve / line sloping downward to the axes (1). Shift indicated by arrow or letter (1). Up to 2 marks for coherent analysis which might include: Better quality resources will increase productivity (1) enable more of both types of goods to be produced (1) with a given quantity of resources (1) increase productive potential / productive capacity / total supply (1) cause economic growth (1).
  4. [8] (d) Why it might: reduce the number of dependents; fewer workers away from work to bring up children; enable resources to be used to increase economic growth / raise living standards; reduce pressure on the environment; move towards the optimum population. Why it might not: reduce the size of the labour force in the longer term; reduce labour mobility; create an ageing population; reduce size of markets.

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About this question

Topic
The basic economic problem, O-Level Economics (syllabus 2281). Structured question, 20 marks.
Source
O-Level Economics, Oct/Nov 2021 Paper 2 Variant 2, question 2.

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