In 2019, China recorded an economic growth rate of 6.1%, and households in China spent more. Attendance at sports events among Chinese people rose, so the income of leading sportspeople also went up. China exported more even though tariffs increased on some of its products. For instance, the US raised tariffs on imports of Chinese tea and coffee.
(a)[2]
Identify the opportunity cost of households using their income for spending and the opportunity cost of Chinese firms exporting goods and services.
(b)[4]
Explain two reasons why some top sportspeople earn high incomes.
(c)[6]
Analyse the reasons for putting tariffs on imports.
(d)[8]
Discuss whether a country with a high economic growth rate will or will not have a deficit on the current account of its balance of payments.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “For households, the opportunity cost is saving or spending on home-produced goods” …