analyse the impact on British cars of using labour intensive production (( 12 MARKKS))
Answers
Answer:
1 (a) Using information from the extract, identify two characteristics of monopoly. [2]
• High barriers to entry and exit (1)
• A sole producer (1)
• Gain total control of the market (1)
(b) Calculate the total output of car parts in US$ in 2013. [3]
• US$396.8 bn Accept US $396 bn or US $397 bn or US $3.968253968x1011 (3)
• Correct working i.e. US $250 bn x 100/63 (2)
• US$250 bn is 63% of the total (1)
(c) Explain, using information from the extract, why wages in the UK car industry fell in
2008. [2]
• A recession occurred in the UK in 2008 (1). Falling GDP may reduce demand for cars
(1). Demand for labour falls (1)
(d) Using information from the extract, explain two merits of a market system. [4]
• Consumer sovereignty (1) consumers having the power to decide what is produced /
firms allocate resources according to consumer demand (1) results in greater choice for
consumers (1)
• Firms respond to price changes (1) bring in new methods of production (1) may lower
costs / are more efficient / competitive (1)
• May encourage innovation (1) improve quality (1) due to the profit motive (1)
(e) Analyse two reasons, referred to in the extract, why a decrease in employment may
increase labour productivity. [4]
• Less skilled workers may lose their jobs (1) they may have relatively low productivity
(1).
• The industry may become more capital intensive (1) machines replacing workers / more
capital equipment per worker enables workers to produce more output (1).