Qatar has a developing economy and has gained from the expansion of the insurance industry. At present, this industry is dominated by a single firm and remains far from perfect competition. The economy has also seen an overall rise in labour productivity. However, economists disagree about the exact link between free trade and economic growth.
(a)[2]
Define the term ‘perfect competition’.
(b)[4]
Explain two influences on firms’ size.
(c)[6]
Analyse the causes of a rise in labour productivity.
(d)[8]
Discuss whether a country that participates in free trade is likely to have a higher economic growth rate than one that uses trade protection.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Firms act as price takers” …