2019 H2 Economics Paper 1 Case Study 2: Suggested Answers
The case study examines the changing landscape of international trade, including US manufacturing productivity, global value chains, tariff protection, China's Belt and Road Initiative, and whether globalisation is reversible.
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A two mark evidence question drawing on Figures 1 and 2 for signs of rising US manufacturing labour productivity from 1987 to 2017.
Productivity of workers can be measured by output per unit of labour input. The evidence of an increase in US manufacturing productivity from 1987 to 2017 can be seen in the trends in Figures 1 and 2. Over this period manufacturing employment fell, yet real manufacturing output rose. This means each unit of labour was producing more output, and an increase in output despite a fall in labour signifies an improvement in labour productivity.
Define productivity and use both figures to show falling employment alongside rising output.
A two mark explanation, with an example, of one gain a firm enjoys from larger scale production via the global value chain.
A key benefit to a firm of producing on a larger scale through participation in the global value chain is the realisation of internal economies of scale. For instance, a firm specialising in manufacturing a specific component for a global product can invest in advanced machinery and technology. This specialisation and large scale production raise efficiency and lower production costs per unit, as the firm spreads fixed costs over a larger output, thereby reducing the average cost of production.
Name a specific benefit, internal economies of scale, and develop it with an example and the average cost link.
A two mark explanation of one reason behind Singapore's high share of foreign inputs and deep global value chain participation.
One possible reason for Singapore's high participation rate in the global value chain is its application of the theory of comparative advantage. Singapore, with an abundance of skilled labour and technical knowledge, focuses on producing and exporting high value goods where it has a comparative advantage and incurs lower opportunity costs. This is reflected in its significant use of foreign inputs for exports, suggesting a focus on the final stages of production. This strategy lets Singapore integrate efficiently into the global value chain, specialising where it holds a competitive edge.
Give one developed reason, here comparative advantage, linked to Singapore's high foreign input share.
A six mark explanation of two motives behind the US push to protect its manufacturing sector with tariffs.
- Set up the two arguments for protection as distinct objectives a tariff could serve.
- Develop the first reason, tracing how a tariff feeds through to domestic production and the labour market.
- Develop the second reason, tracing how a tariff feeds through to imports and the trade balance, with the relevant elasticity condition.
This part is gated. The full model answer developing both reasons in detail, with the diagrams and the full evaluation, is in the ETG TYS Answers book from SAP and is worked live in the TYS Crashcourse. ETG students also get the AI TYS coach that guides them through this exact question. Message the team to find out more.
Tests: Protectionism, Balance of payments
An eight mark assessment weighing the gains and risks of China's Belt and Road Initiative for Pakistan's economy and its overall benefit.
- Build the advantages around the demand side stimulus and the connectivity gains, drawing on the case evidence.
- Build the disadvantages around the capacity constraint and the financing risk.
- Bring in the case study context on global value chain participation and the trade relationship with China.
- Weigh advantages against disadvantages, identifying the factor the overall benefit hinges on.
- Reach an evaluative judgment on whether the initiative is of overall benefit.
This part is gated. The full model answer with the worked aggregate demand analysis and the evaluative judgment, with the diagrams and the full evaluation, is in the ETG TYS Answers book from SAP and is worked live in the TYS Crashcourse. ETG students also get the AI TYS coach that guides them through this exact question. Message the team to find out more.
A ten mark discussion, using the case evidence and economic analysis, of how far globalisation can be considered reversible.
- Set up the indicators in the evidence that point towards a slowdown in globalisation.
- Develop the case that geopolitical events and protectionism could drive a retreat.
- Build the counter case from the evidence that global trade and integration remain robust.
- Distinguish a slowdown or evolution of globalisation from a full reversal.
- Reach a reasoned judgment on the extent to which globalisation is reversible.
This part is gated. The full model answer weighing the evidence and the evaluative judgment, with the diagrams and the full evaluation, is in the ETG TYS Answers book from SAP and is worked live in the TYS Crashcourse. ETG students also get the AI TYS coach that guides them through this exact question. Message the team to find out more.
Tests: Protectionism, Comparative advantage
Questions students ask
Where can I get the full worked answers to the 2019 H2 Economics paper 1 case study 2?
The full model answers, with the diagrams and the higher mark evaluation, are in the ETG TYS Answers book published by SAP and sold at Popular, and are worked live in the TYS Crashcourse. Every ETG student also gets the AI TYS coach on our learning management system, which guides you through how to tackle every essay and every case study question from the last ten years.
Are these the official 2019 A Level Economics answers?
No. SEAB sets and marks the A Level paper. These are suggested answers by Mr Eugene Toh, author of the H1 and H2 A Level Economics TYS answer keys, published by SAP and sold at Popular.
How are these case study suggested answers structured?
The lower mark parts are answered in full. The higher mark parts are outlined here, with the full worked answers reserved for the ETG TYS Answers book and the TYS Crashcourse.
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