In 2016, a global peanut shortage pushed up their price. China, which had usually been a net exporter of peanuts, was on the point of becoming a net importer. South Africa, an exporter of premium, high-priced peanuts used in chocolate confectionery, suffered the worst drought on record. In the same year, more South African farmers applied for bank loans.
(a)[2]
What is the difference between a product’s price and its cost?
(b)[4]
Explain two influences on a country’s demand for food.
(c)[6]
Analyse why a country may shift from being a net exporter of a product to becoming a net importer of that product.
(d)[8]
Discuss whether a central bank ought to place a limit on the amount a commercial bank may lend to its customers.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Price means the amount paid by the consumer” …