Nauru is among the world's smallest countries, with a population of only 10 000. Fifty years ago, its population was one of the richest per head in the world, mainly because it exported phosphate that had built up over many centuries from sea-bird droppings. This labour-intensive industry has shrunk sharply. Today, incomes are much lower and one third of workers are jobless.
(a)[2]
What is meant by the term ‘labour-intensive industry’?
(b)[4]
Explain two reasons why a country may stop exporting a product.
(c)[6]
Analyse the effects on inflation of an increase in unemployment.
(d)[8]
Discuss whether a relatively small population is an advantage or a disadvantage for an economy.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “A high proportion of labour is used” …