Business 7115 · O Level · Business and the international economy
Business and the international economy — practice question
Raul runs a small orange farm in country Z. As with every primary sector activity, farming generates external costs and external benefits. Raul sells all 600 tonnes of his oranges straight to a drinks manufacturer in country E. The Government of country E plans to bring in either import tariffs or quotas. Raul commented: ‘This might help country E’s Government meet one of its economic objectives, but what effect will it have on firms that export to country E?’
(a)[2]
Define the term ‘primary sector’.
(b)[2]
Identify two government economic objectives.
(c)[4]
Outline one external benefit and one external cost that could arise from Raul's business activity.
(d)[6]
Explain two advantages to Raul's business of selling directly to a manufacturer.
(e)[6]
Do you think import tariffs are likely to have a bigger effect on an exporting business than import quotas? Justify your answer.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Extracts natural resources from the Earth and uses them to produce raw materials” …