In 2015, Puerto Rico said it was thinking about removing some of its trade embargoes. At the same time, its government was re-examining how much it intended to spend. Incomes have been rising in Puerto Rico, although some workers have improved their position more than others. There have also been changes at the micro level, with the price elasticities of demand and supply shifting in some markets.
(a)[2]
Identify two reasons why a government might place an embargo on the import of a product.
(b)[4]
Explain two reasons why some young workers may earn more than some old workers.
(c)[6]
Analyse the factors that can cause the supply of a product to become more price-elastic.
(d)[8]
Discuss whether lower government spending would benefit an economy.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “improve the current account balance” …