Some markets in Belgium are already in equilibrium. The country makes a broad variety of goods and services that have different levels of price elasticity of demand. The Belgian Government wants the economy to move to a production possibility point beyond its present production possibility curve (PPC). One industry performing strongly is Belgium’s scientific industry. The workers in this industry are highly specialised.
(a)[2]
Define market equilibrium in economics.
(b)[4]
Explain two ways an economy might move to a point outside its current PPC.
(c)[6]
Analyse how price elasticity of demand can shape a firm’s pricing decisions.
(d)[8]
Discuss whether or not firms benefit from their workers undertaking training.
Worked solution & mark scheme
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