In 2019, France produced inside its production possibility curve (PPC). France exports a wide range of its products. It is the world's top exporter of luxury perfume and the 7th largest exporter of soap. Changes in technology affect the products people produce and buy. The French government plans to upgrade its infrastructure for all households to have internet access. Each question is introduced by stimulus material. In your answer you may refer to this material and/or to other examples that you have studied.

Mark scheme

Marking points from the official mark scheme (May/June 2022). The mark or mark type is shown in brackets.

1. [1] A diagram showing maximum output / possible combinations
2. [1] of two types of products / of capital and consumer goods
3. [1] with given resources / given technology / in a given time period
4. [1] shows opportunity cost.
5. [2] Soap is more essential / necessary than a luxury brand of perfume (or [1] for necessity, [1] for luxury not essential/want).
6. [2] Soap has fewer substitutes than a luxury brand of perfume (or [1] for fewer substitutes, [1] for many substitutes for luxury perfume).
7. [2] Soap is likely to take up a smaller proportion of income than a luxury brand of soap (or [1] for small proportion, [1] for large proportion of income for luxury perfume).
8. [1] It is harder to delay the purchase of soap than the purchase of a luxury brand of perfume (or [1] for cannot be delayed, [1] for can be delayed).
9. Diagram marks (up to 4):
10. [1] Axes correctly labelled (price and quantity or p and q).
11. [1] Original demand and supply curves correctly labelled (D1, S1).
12. [1] New demand curve shifted to the right (D2).
13. [1] Equilibriums shown by lines or equilibrium points (P1, Q1 and P2, Q2).
14. Written analysis marks (up to 2):
15. [1] Luxury perfume will be more affordable / greater purchasing power / will take a smaller proportion of income / more will be demanded at the same price.
16. [1] Price will rise / quantity traded will increase.
17. Why the public sector might be responsible:
18. • [1] government may charge a low price
19. • [1] enable poor to gain access to the internet, help children with education
20. • [1] government may base decisions on social costs and benefits
21. • [1] government can control what is on the internet
22. • [1] may be more able to take advantage of economies of scale
23. • [1] avoidance of wasteful duplication
24. • [1] government may take a longer-term view on investing.
25. Why the public sector might not be responsible:
26. • [1] opportunity cost – could have spent the money on e.g. healthcare
27. • [1] private sector may invest more
28. • [1] private sector may be more efficient / have lower costs of production
29. • [1] profit incentive may encourage private sector to raise quality
30. • [1] private sector may make decisions quicker.