4.8 ECON

Question 1 Max
Evaluate the effects of schemes aimed at stabilizing the prices of primary commodity on producers and consumers.
In LDCs, money raised from sale of primary goods is used to pay for manufactured imports: very high (90%) for most African LDCs
Primary have a high price volatility, meaning that they change in price very quickly; that makes dependant nations unstable
To counter volatility, countries enter sellers’ agreement, which creates more stable prices; however this can lead to:
Overproduction
Failure to get all producers to join the ‘club’
Storage of some commodities (esp. agricultural; go bad)
‘Floor prices’ are too high and encourage overproduction (funds have to be used to sponge up surplus, potentially retarding other projects)
Further, sellers’ agreements are ineffective at helping against upward pressures in price
Leads to further dependence on the primary products
Puts an upward pressure on a country’s exchange rate
Leads to inflationary pressures
Worsens corruption
A government could also use monetary policy to try and manipulate the exchange rate; however, developing countries tend not to have large amounts of foreign reserves and don’t have established financial systems like banks and credit systems that would make monetary policy effective

Question 2 EVANGEL
Explain the reasons for the growth, and increasing importance, of MNCs over the last half century.
Foreign direct investment (FDI) refers to the net inflows of investment to acquire a lasting management interest in an enterprise operating in an economy other than that of the investor. It is mainly undertaken through multinational corporations (MNCs)—a company that possesses and controls the means of production or services outside the country in which it was established. (e.g. Nike)
Reasons for the MDC to provide FDI
Economies of scale: any fall in long-run unit costs that come about as a result of a firm increasing its scale of production
Access to new markets
Access to cheap resources
Less regulation
Positive:
More stable and long-term than aid
Stimulate export markets in the host nation
Transfer technology from developed countries to developing nations
Boosts economic growth
Provide employment in the host nation
Provides training and education for local employees
Contributes tax revenue to the local government
MNCs may contribute other funds to local development projects or invest in other related assets in the host country
Create multiplier effect (more money -> consume more -> provide jobs -> more consumption)
Negative:
Loss of sovereignty to some extent
Dependency issue
May employ largely expatriate managers, ensuring that incomes generated are maintained within a relatively small group of people.
Exploit a large and cheap supply of local manual labor
Can have influence on governments to get tax breaks, grants, and subsidies
Drive out local businesses (Crowding out effect)
Environmental degradation
May worsen income distribution (Lorenz curve)

Question 3 KOKI
“The benefits of economic growth will, without any government intervention, trickle down to benefit the poor.” Do you agree with this statement? Justify your answer.

I disagree to this statement. Although economic growth can benefit the whole society in general, there are always people that lose out. The benefits that can trickle down to the poor are things such as demand of employment from the rich. The firms and households will always need workers and the poor can fulfil this need. The rich will collect money, and the government will earn more revenue from this as they can tax the rich. This increased revenue will allow the government to renew infrastructure and build a better city. The poor may also have access to these benefits. These benefits seem to help all the members of society, but there are members that lose out. The poor with a low level of education may be exploited to work at lower pay rates than they deserve. As more advancements appear in the city, living costs will increase, and to sustain a adequate level of living, children may be forced to work at a young age. This will cause a negative spiral, causing the poor to stay poor. Without government intervention, the poor will be poor, the rich to be rich.

Question 4 TOMOYO
Analyse the advantages and disadvantages of foreign direct investment for developing countries.
Advantages:
causes a flow of money into the economy which stimulates economic activity
more employment opportunities
long run aggregate supply will shift right
aggregate demand will also shift outwards as investment is a component of aggregate demand
it may give domestic producers an incentive to become more efficient and competitive
FDI allows the transfer of technology—particularly in the form of new varieties of capital inputs—that cannot be achieved through financial investments or trade in goods and services. FDI can also promote competition in the domestic input market.
Recipients of FDI often gain employee training in the course of operating the new businesses, which contributes to human capital development in the host country.
Profits generated by FDI contribute to corporate tax revenues in the host country.
the government of the country experiencing increasing levels of FDI will have a greater voice at international summits as their country will have more stakeholders in it

Disadvantages:-
inflation may increase slightly
domestic firms may suffer if they are relatively uncompetitive
if there is a lot of FDI into one industry; the automotive industry then a country can become too dependent on it and it may turn into a risk

Question 5 Max
Explain why a floating exchange rate may be considered as a market oriented growth strategy.
Floating Exchange Rate
A system of exchange rate in which the exchange rate, the price of one currency in terms of another, is determined by the powers of supply and demand rather than government intervention
The positive effects for growth are:
The promotion of competition – LDCs specialize in the production and export of those goods and services where they hold a comparative advantage.
Increases in efficiency as domestic exporters are forced to become more competitive.
Increased profitability and higher incomes, inducing greater savings and investment.
Encouraging foreign direct investment and inflows of overseas capital and enterprise.
The freeing up of markets – the removal of subsidies and price controls reduces government costs, opportunities for corruption and growth in black markets.

E.3b Innate & Learned Behavior-2

1.

The second sonogram contains repeated sections of relatively short alternations between high and low pitches. The first contains slower detentions from a high pitch to a low pitch between sections of very short alternations. The beginning section differs and the second sonogram shows a short dip in pitch in the middle of the section.

 

2.

(a) Sonogram three is similar to sonogram two, But the repeated sections of relatively short alternations are segmented. Other sections are similar, but the fist section is broader.

(b) It is both innate and acquired. The sparrow from sonogram 3 is able to produce the sounds needed for the song, but does not know the pattern. For the sparrow to be able to produce a complete song, it needs other individuals that have acquired this song to sing it. This allows the sparrow to learn the patterns needed to produce the song.

3

(a) Both are similar, and there is a general trend of a beginning section with a steady pitch, and then a desention from a high pitch to a low pitch.

(b) Sonogram V differs with sonograms I and II, but there are some sections where the indivisual in sonogram V show very short alternations between high and low pitch. This is done in both sonograms I and II and show that there is some similarity.

(c) It is more difficult for them to produce the sounds of other species and imitate them completely. Birds probably acquire their songs from their parents and other members of their species surrounding them when they are born. After acquiring, they probably do not change their songs after that.

(d) It is both, as it shows that the birds have the ability to produce sounds that other species of birds use. This shows the innate abilities that birds have. Also it shows that birds learn their calls at a young age hearing their surroundings, when exposed only to calls from another species, they can learn this song and imitate it.

E.3a Innate & Learned Behavior

1. Placing a food source in one of the arms so that the lice can sense the smell of the food

2. All the speces of wood lice seem to get attracted to scents of their own speces

3. The lice must have olfactory sensing receptors that receive the pheromones and other secretions produced by members of their own species. By having a receptor, the wood lice can notice molecules of these secretions in the air. The fact that the scented arm attracted far more lice show support this.

4.

(a) The wood lice are ready for reproduction, and they are attracted to members of their own species to mate. Attraction to mates increase chance of survival for the species.

(b) The wood lice are repelled from the scent of their own species to lessen competition. The competition may be for things such as food and habitat.

 

 

E.1 Stimulus and Response

1. Lassen:82,18

Humboldt: 67, 33

Santa Cruz: 15, 85

 

2 The inland populations come in contact with less slugs, and over the couse of evolution, they did not acquire the genes to make them eat slugs. Costal populations came in contact with more slugs, selecting the genes that induce more slug consumption.

 

3 (i) slug response is inherited. This is seen from the comparison between the lassen and F1 population. Both do not consume slugs. The fact that there is a pattern and is not random shows that there is inheritance of slug consumption.

(ii) Alleles for slug response is recessive. Looking at the Lassen and S. Cruz populations,  Lassen probably has alleles for less consumption of slugs. S.Cruz populations probably have alleles for consumption of slugs. When these two populations are cross bred, the populations show a tendency to not consume slugs. This shows that slug consumption is a recessive allele.

4 Olfactory, as the genes allow the snake to recognize some molecules that the slug gives off into the air

The Secrets of Cuban Medicine

Question 1

Identify the indicators of development the article identifies as priorities for the Cuban government.

For the Cuban government, indicators such as longevity and obese rates are important. The people could not be as wealthy as citizens of US or Japan, but can gain a long life instead. They spend the income gained from foreign visitors on hospitals so that the people in need of healthcare facilities can easily access them. By making healthcare free, the people will not have to worry about their economic status and refrain from using the hospital, even if their healthcare conditions require care. By focusing on these indicators, the nation can maintain a healthy life.

Question 2

Examine the evidence in the article that suggests the inhabitants of Cuba experience low livings standards.

The article mentions some evidence that shows that although the citizens of cuba have a high level of healthcare, their economic status is low. The official says that there is no gasoline in Cuba to fill the car up before heading off to work in the morning, or they don’t have meat for lunch everywhere. This is what the Cuban citizens do not get, as all the resources are allocated to healthcare. This also makes Cuba appear as a very poor nation in economic terms.

Question 3

Analyse the advantages and disadvantages to the Cuban economy as a result of allocating resources to the health sector.

Allocating resources to healthcare brings about large disadvantages on the economy. As all the tax is spent of healthcare, subsidized to be free from the government, the patents that arrive at the Cuban hospitals do not need to pay. This benefits the patents but decreases the flow of cash in the economy. Most of their income relies of foreigners coming to Cuba, and so the economy is still very weak. As the average income does not change very much, peoples’ lives do not change. They appear poor in economic scales and this gives a image of Cuba as a poor, unhealthy nation, despite the government allocating money to healthcare.

The benefits from the heavy healthcare is also very large. As even some of the poorest citizens do not have to worry about expenses on healthcare, they can allocate the money to different things. Each citizen lives longer and contributes to the economy as they can stay healthy for longer. Foreigners come to receive medical aid, and this makes the economy thrive from the money they spend while inside the nation.

ECON DBQ Maasai

Question 1

Empowerment means gaining control of more economic goods to be able to sustain life alone or affect other people. By gaining more capital such as a field for a food source, house, livestock, and money these women can sustain life by themselves. Because these Maasai women did not have any of these capital, they had very little power and could not live alone without someone caring for them. Empowering these women will make them able to affect their surroundings and make a change.

Question 2

Since roughly half of the population of any society is half women, men not letting these women own anything and not have a choice means half of the available human workforce is disabled. Because the resources are not being fully used, there is little economic development. The women cant work for themselves, and the men taking care of them also puts more stress on the men.

Question 3
The policies that are introduced into these Massai communities will benefit to increase the level of intelligence in the entire female population in these communities. As the young girls obtain more information from education provided by this aid, they will spread this information to other women in the population. Increased confidence and more information will let these women live more independently. There are problems in this aid too. As the Maasai women live in a more traditional lifestyle than women in other communities, policies that work in other more modern communities may not work. Since the Maasai are pastoralists, they do not stay in one area. This makes it more difficult to give women economic goods. Except for cattle, they cannot take large quantities of goods. Education is also difficult as they are constantly moving round and do not live in a specific location. Education will have to be done living and moving with them, and this is difficult for an outsider to enter into their culture. The men may not accept this new aid and protest to this. Capital aid may leak to uses other than initially intended, as the less educated may not allocate it effectively.

Question 4
Of all the policies possible to aid women, education is the most effective. By the women holding more knowledge, they are able to make independent choices about their lives. The men that look down on women will have to realize when the women gain more intelligence that they cannot keep on gaining control. By educating women, they can start to earn their own living. By gaining more capital, they will hold more power. There is risk as there can be violence in objection to these women gaining power. There are terrorist acts in Muslim countries to protest against educating women and there is risk that things like this will happen.

ECON Short questions

Question 1: Explain the importance of human capital in contributing to economic development.

The quality of the working population, the human capital, is the result of knowledge, skills, education and training. The benefits of enhancing human resources (investment in human resources) go far beyond economic growth. A short list of positive effects resulting from investment in human capital would have both economic and social benefits:
economic benefits would be higher productivity in the economy; increased labour mobility as more people would be attractive on the job market; more dynamism as a result of entrepreneurial spirit; and better use of finite resources
social benefits include better health and longer lives, greater participation and democratisation in local and municipal issues; better opportunities for women in choosing their own lives; and thee ability to partake in a wider range of cultural offerings

Quantity: Increases in the population can increase the number of young people entering the labour force and these increases in the supply of labour can increase economic growth. Increases in the population can also lead to an increase in market demand thus stimulating production. However, if the population grows at a faster rate than the level of GDP, the GDP per capita will fall.

Quality: Improving the skills of the work force is seen as being a key factor in promoting economic growth. Many LDCs have made enormous efforts to provide universal primary education. As more and more capital is used, labour has to be better trained in the skills to use the capital, such as servicing tractors and water pumps, running hotels and installing electricity. It should always be remembered that education spending involves an opportunity cost in terms of current consumption and thus it is often referred to as investment spending on human capital.

Question 2: Explain the difference between economic growth and economic development.

Many developing nations have managed to achieve high rates of economic growth, yet failed to experience any positive change in standards of living for the majority of their people. Thus, the definition of economic development had to be changed.

Economic growth is where there is an increase in the productive potential of the economy and is best measured by the increase in a country’s real level of output over a period of time, i.e. the increase in real Gross Domestic Product (real means adjusted for inflation).

Economic development, on the other hand, is a process where there is improvement in the lives of all people in the country. This involves not only living standards, such as greater availability of goods and services (and also the ability to purchase them) but also the promotion of attributes such as self-esteem, dignity and respect, and the enlarging of people’s freedom to choose and to take control of their own lives. While a country may grow richer therefore, through the growth of its real output, it does not necessarily mean that it will develop.

Question 3: Discuss the view that the achievement of higher economic growth rates should be the priority of developing economies.

It was believed that economic development occurred when there was a high level of industrialisation and economic growth; social factors, such as poverty and unemployment were of lesser importance. It was also believed that the material benefits of growth would trickle down from the better off to the rest of the population, causing development.

Question 4: Explain what is meant by sustainable development.

Sustainability is the ability of the environment to survive its use for economic activity. For economic growth to be sustainable, it must have a neutral effect on resources. Any resources used must be renewable and there must be no lasting impact on the environment. It is important that development is sustainable to ensure that it can endure in the long-term and is not built on the exploitation of natural resources that may run out in the future.

Question 5: Explain how extending property rights and land ownership can help bring about more sustainable development.

Extending property rights means extending ownership of resources to allow people to protect the environment and other resources more effectively..

Extending property rights protection to the poor is one of the most important poverty reduction strategies a nation can implement. Securing property rights to land, the largest asset for most societies, is vital to their economic freedom.The World Bank concludes that increasing land rights is ‘the key to reducing poverty’ citing that land rights greatly increase poor people’s wealth, in some cases doubling it. (Wikipedia)

(source)↓
Some nations grant ownership of what is above and below the land when a individual owns a piece of land. By doing this, the owners can ask for a subsidy or payment when resources such as coal or other minerals are found on their land. The state has to ask the owner to do anything. This allows for more development compared to other countries that only grant the subsoil to be owned. This means that the owner is allowed to make use of the land itself to build and farm, but decisions of anything below that such as subways, sewers, and minerals are done by the state. When individuals have the rights and responsibility to make decisions about the land, they can benefit more.

Question 6: Discuss the view that economic growth will inevitably conflict with sustainable development.
Inequality of income — growth rarely delivers its benefits evenly. It often rewards the strong, but gives little to the economically weak. This will widen the income distribution in the economy. In developing economies, income distribution is frequently unequal and many of the benefits of growth may go to the better-off in society and flow overseas in the form of increased profit for multinational corporations.
Pollution (and other negative externalities) — the drive for increased output tends to put more and more pressure on the environment and the result will often be increased pollution and resource degradation. This may be water or air pollution, but growth also creates significantly increased noise pollution. Deforestation and environmental degradation are likely to result from growth. This is particularly true in developing countries as they tend to have little legal protection of the environment.
Loss of non-renewable resources – the more we want to produce, the more resources we need to do that. The faster we use these resources, the less time they will last.
Loss of land — increased output puts further pressure on the available land. This may gradually erode the available countryside. In many developing economies there will also be additional problems resulting from the movement of people from country to urban areas.
Lifestyle changes — the push for growth has in many areas put a great deal of pressure on individuals. This may have costs in terms of family and community life in many economies.

E.4b Drugs & the Nervous System

1. The producers that gain large amounts of profits from the tabacco products. They purposely put large amounts of addictive goods into tobacco products so that they can keep gaining profit.

2. The negative externalities come from the costs that come from the healthcare needed from the various respiratory deseases that come from smoking.

3. Since these externalities can seriously damage society, it is important for governments to control the circulation of these goods so society doesn’t get damaged severely.

E.2b Perception: hearing

1. (a) The percentages of the two groups are the following
Lassen: 83, 16
Humboldt: 30, 65
S.Cruz: 15, 84

(b) There are more slugs inland, and the individuals with habits of eating slugs is selected as they get more axess to food.

3(a) There is more possibility for the non slug eating habits to be inherited.
(b) In F1, more individuals show non slug eating habits. The two parent groups show eating and non eating, so the allele is recessive.
4. Olfactory, by smelling the chemicals that a slug produces.

E.2a Perception: vision

Visual perseption

Light entering the eye is focused with a biological lens and is captured by the retina. 2 different types of cells capture different signals. These signals are then converted to nerve signals and sent to the brain. The brain interprets the signals and composes a visual image.

Processing of visual stimuli
The brain flips around the image that is produced, as the lens in the eye creates a mirror image. The image is then interpreted by the rest of the brain to use for living.