Economics · May / June 2016 · Paper 21 · Question 7

2281

As printed in the paper

The question as text

In 2014 Cuban doctors were given pay rises that significantly increased their salaries. This made doctors’ pay more than twice that received by nurses. Cuba is devoting more resources to both medical care and tourism, altering the country’s production possibility curve. Living standards are increasing in the country but at a slower rate than some other nearby countries.

Read automatically from the paper; the printed page above is exact.

Show the answer and mark scheme

7(a)[2]
What is meant by a production possibility curve? [2]
A curve that shows the maximum output of two types of products / combination of two products (1)
that can be made with given resources/technology (1)
it shows opportunity cost (1)
Allow 1 mark for some understanding shown about potential maximum output
Allow up to 2 marks for a diagram which is explained – with correct labelling (1)
and correct curve (1)
7(b)[4]
Explain, giving examples, two factors of production used in the tourism industry. [4]
Labour which is human effort (1)
e.g. tourist guides (1).
Land which is natural resources (1)
e.g. beaches (1).
Capital which is human-made goods and services used in production (1)
e.g. hotels (1)
Enterprise which is risk bearing and decision making (1)
e.g. may be undertaken by the owner of a hotel (1).
7(c)[6]
Analyse why doctors are paid more than nurses. [6]
Doctors need higher qualifications (1)
take longer to train (1)
reduces supply (1)
makes supply more inelastic (1).
Doctors are more skilled (1)
more productive / efficient (1)
in higher demand (1).
Doctors may have a more powerful professional organisation / trade union (1)
giving them greater bargaining power (1).
Doctors maybe a different gender to nurses (1)
discrimination may occur (1)
7(d)[8]
Discuss whether living standards are always lower in developing countries than in developed countries. [8]
Up to 5 marks for why they might be:
Developing countries tend to have lower income per head / greater poverty (1)
reducing the goods and services their people can buy (1).
Developing countries tend to have higher population growth (1)
this can increase the dependency ratio (1)
reducing resources available to e.g. improve housing conditions (1)
Developing countries tend to have lower life expectancy (1)
health care tends to be less readily available / lower quality (1).
Developing countries tend to have a lower standard of education (1)
children likely to have fewer years at school / attend university / gain well paid employment / more productive (1)
Developing countries tend to have more people employed in the primary sector (1)
work in the primary sector tends to be more physically demanding/lower paid (1). NOTE: Accept the reverse argument why living standards are always higher in developed countries. Up to 5 marks for why they might not be:
Some people in developed countries may experience lower living standards (1)
as income may be unevenly distributed / there is relative poverty (1).
Working hours may be lower in developing countries (1)
which increases leisure time (1).
The informal economy may be greater in some developing countries (1)
meaning that output may be higher (1).
Obesity may be more of a problem in developed countries (1)
reducing the health of the population (1).
Some jobs in the primary sector are well paid (1)
e.g. in the oil industry (1).

Practise this paper →

Make a free account to save your answers and see your weak topics and ask the AI why a wrong answer is wrong.