In 2021, the production point on the UK's production possibility curve (PPC) changed. Average wages increased. The average annual wage of a waiter was $23,580 while that of a chief executive of a large commercial bank was $1,617,000. A rise in wages enables people to eat in restaurants more often. Some of the food sold in UK restaurants is imported. In 2021, the UK government signed free trade agreements, removing import restrictions, with a number of countries.

Mark scheme

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

1. [1] point inside the curve / left of the curve;
2. [1] point on the curve / along the curve;
3. [1] point outside the curve / right of the curve.
4. [1] (Change in) prices; [1] lower price making it more affordable / substitutes / save money.
5. [1] (Change in) quality; [1] better ingredients / better cleanliness / quicker service / new menu / more satisfaction / better taste / change in staff.
6. [1] (Change in) convenience; [1] e.g. longer opening hours / better location.
7. [1] (Change in) facilities; [1] e.g. better restrooms.
8. [1] (Change in) income; [1] enabling some to eat in more expensive restaurants.
9. [1] (Change in) consumer tastes; [1] switch to e.g. vegan restaurant.
10. [1] Advertising; [1] may attract/persuade customers / increase attractiveness.
11. [1] (Change in) quantity provided; [1] lower quantity may represent lower value for money.
12. [1] Chief executive may be more qualified / more educated / received more training / more skilled / talented / more productive / more experienced.
13. [1] Higher level of responsibility / higher level of stress / more demanding job.
14. [1] In shorter supply / harder to replace / more inelastic supply.
15. [1] Chief executive may be in higher demand / more inelastic demand.
16. [1] Chief executive may have stronger bargaining power / more likely to be in a trade union / professional body.
17. [1] May be less likely to be in a group that is discriminated against / e.g. migrant workers.
18. [1] Chief executive may work longer hours.
19. [1] May enable countries to specialise on what they are best at producing.
20. [1] Higher competition may increase productivity and lower costs of production, increasing demand for their products.
21. [1] May enable firms to buy raw materials and capital goods at a lower price.
22. [1] May give firms access to larger markets, enabling them to expand output.
23. [1] May prevent infant industry from growing.
24. [1] May speed up the closure of declining industries.
25. [1] May replace domestic output with imports.
26. [1] May reduce tax revenue.
27. [1] Firms may gain monopoly power and may restrict output.
28. [1] Firms may engage in unfair competition e.g. dumping.