Poverty — practice question

Source material: Cambridge (UK) and Education Cambridge sits at number one among all UK cities for the proportion of workers holding a university qualification. It is also placed number two in the UK for the proportion of people aged 18-29. This reflects the very large student population in Cambridge universities. Even though the city’s population is relatively small, its share in the total size of the UK economy is substantial. A lot of firms in Cambridge are active in education, healthcare, research and development, and hi-tech manufacturing. Cambridge firms’ exports are strongly knowledge-intensive, so they are expensive and price-inelastic in demand. Rising incomes around the world have also pushed up demand for services such as education from Cambridge. An expansion in the education industry could help to cut poverty. A more educated labour force can earn higher wages and can also obtain more information about health. Table 1.1 gives the percentage of the population aged 25-64 with a university degree and the GDP per head in selected countries in 2019. Many residents of Cambridge strongly back globalisation and free trade between countries. A large number of firms in Cambridge rely on export earnings. Cambridge is an appealing place for expanding firms because many highly skilled and educated workers are available from across the world. It also has strong infrastructure, including access to ultra-fast broadband and transport links to other cities and international airports. However, firms may have to deal with high land and office costs. In 2019, Cambridge had the third highest house prices in the UK city ranking. Poor air quality may also put workers off moving to Cambridge.