Economics 2281 · O Level · Employment and unemployment
Employment and unemployment — practice question
Nauru is among the world’s tiniest countries, with a population of just $10\,000$. Half a century ago, it had one of the highest incomes per person in the world, mainly because it exported phosphate that had built up over many centuries from sea-bird droppings. This labour-intensive sector has now shrunk sharply. Today, incomes are much lower and one third of workers are unemployed.
(a)[2]
What does the term ‘labour-intensive industry’ mean?
(b)[4]
Explain two reasons why a country could cease exporting a product.
(c)[6]
Analyse how a rise in unemployment affects inflation.
(d)[8]
Discuss whether having a relatively small population is more of 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 share of labour compared with other factors” …