Economics · May / June 2021 · Paper 22 · Question 2
0455
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The question as text
Nearly one million people in Cairo, the capital city of Egypt, live in crowded, unhealthy housing. One reason why people lack basic necessities, including adequate housing, is unemployment. In 2019, nearly 10% of Cairo’s workers did not have a job. Other citizens of Cairo live in luxury, in houses costing more than $1 million. Many of Cairo’s rich adults grew up in rich families.
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2(a)[2]
Identify two basic necessities, other than housing. Two from e.g.: Food, water, clothing, healthcare and education. 2 Accept any relevant basic necessity e.g. heating or electricty. If more than two examples given, only consider the first three.
2(b)[4]
Explain how frictional unemployment differs from cyclical unemployment. Logical explanation which might include: Frictional unemployment arises from people being in between jobs (1)
may be waiting for a better paid job / may be seasonally unemployed / may have worked on a short-term contract / may lack information about vacancies (1)
may exist even when there is full employment / may be self-correcting (1). Cyclical unemployment is caused by a lack of total (aggregate) demand (1)
more people unemployed than there are job vacancies (1)
may arise from a recession / economic downturn (1)
may need government action to reduce it (1). Frictional unemployment would be reduced by a rise in labour mobility (1)
cyclical unemployment would not be (1). Frictional unemployment may be short term (1)
cyclical unemployment may be long term (1). 4 Up to 2 marks for each type of unemployment.
2(c)[6]
Analyse why the children of the rich tend to become rich adults. Coherent analysis which might include: The children of the rich tend to receive a good education (1)
may not have to take part-time jobs / not have to help in family business when studying / not have to leave school early (1)
become well qualified / well educated / gain high level of knowledge (1)
become highly skilled / productive / efficient (1)
find it is relatively easy to find employment / get a good job (1)
well-paid (1). The children of the rich tend to receive good health care (1)
good nutrition (1)
have good housing (1)
unlikely to miss time at school (1)
unlikely to miss time at work (1)
income will be high (1). The children of the rich tend to have high expectations (1)
apply for better jobs (1). The children of the rich may inherit e.g. property (1)
may gain income from e.g. inherited property / business / savings (1). Rich parents may have connections with e.g. bosses of major employers (1)
more likely to gain high paid work (1). 6 Note the focus here is on the children of the rich so no marks for e.g. the children of the poor may lack education. Reference to highly skilled / productive or efficient may be linked to education, healthcare or nutrition but can only be credited once.
2(d)[8]
Discuss whether a government should provide subsidies to families to spend on housing. In assessing each answer, use the table opposite. Why it might:
will increase the spending power of families who receive itmay increase quantity suppliedmay give low-income families access to a basic necessity, reducing povertymay enable families to spend more on e.g. educationmay increase employment / reduce unemployment, creating jobs building housing / increase labour mobilitymay increase quality of housing and so improve health Why it might not:rich can already afford housingsome families may not spend it on housingmay be inflationary, demand increasing for housing and e.g. furniture, carpetsopportunity costtaxes may be raised to finance subsidybuilding more houses may result in environmental damage Level Description A reasoned discussion which accurately examines both sides of the economic argument, making use of economic information and clear and logical analysis to evaluate economic issues and situations. One side of the argument may have more depth than the other, but overall both sided of the argument are considered and developed. There is thoughtful evaluation of economic concepts, terminology, information and/or data appropriate to the question. The discussion may also point out the possible uncertainties of alternative decisions and outcomes. 6–8 A reasoned discussion which makes use of economic information and clear analysis to evaluate economic issues and situations. The answer may lack some depth and development may be one-sided. There is relevant use of economic concepts, terminology, information and data appropriate to the question. 3–5 There is a simple attempt at u sing economic definitions and terminology. Some reference may be made to economic theory, with occasional understanding. 1–2 A mark of zero should be awarded for no creditable content.
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