Answer to o level question - size, sectors, government

(a) Identify two methods of measuring the size of a business. [2] Size of a business usually measured by capital employed/value of turnover/number of employees/market share (2). One mark per point identified. (b) Explain what is meant by ‘the public sector should expand’. [2] The public sector refers to those activities that are owned and managed by the government or its agencies (1). Expanding it simply implies that the government play a larger role in the economy (such as employment in the sector increases) (1). (c) Identify and explain two reasons why offering financial support to businesses might disadvantage consumers. [4] Consumers might not gain because the supported businesses might be producing poor quality products while better ones could be imported/funds for the subsidies will come out of taxes that consumers (and society) pay/methods used in production are high pollution ones. The explanation marks will be for development showing why the stated disadvantage might occur. (Identification 2, explanation 2) (d) Identify and explain three methods that the government could use to reduce the level of pollution that a business creates. [6] Ways of reducing pollution fall under a number of groups – legislation/financial penalties/public pressure through exposure/threats of action such as closure. Legislation would simply mean that certain practices would be illegal. This would reduce pollution because non complying businesses would be fined or perhaps even closed down. Financial penalties would impose costs on businesses that would mean that they would be unable to survive in the long run if their activities did not change. Public pressure would expose the business and that would result in a loss of public respect and a fall in its reputation. (Identification 3, explanation 3) (e) Do you think that the benefits of expanding the public sector would be greater than the disadvantages in country D? Justify your answer. [6] The benefits of expansion would include – lower prices/possibly free at point of consumption/greater access for all/protection and certainty/less likelihood of exploitation/perhaps the creation of more jobs/given the recession it might help stabilise the economy and the business sector. However the disadvantages might include – lack of product innovation/inefficiency tolerated/lack of choice/lower standards acceptable/higher taxes. Identification of issues (2) Analysis of issues (2) Evaluation of issues (2) Thus an answer might look as follows: If the public sector was expanded this would help protect jobs and might allow businesses to charge lower prices which would benefit consumers (2 identification/knowledge marks). This would benefit employees and consumers. The public sector is not interested specifically in profits and is more interested in making products and services to be more readily available. Thus prices might fall and employment levels would rise (2 analysis marks). Therefore the increase in the public sector would benefit certain stakeholders in society. However the level of taxes might have to rise and so some people might lose. On balance the benefits are greater than the costs (2 evaluation marks). This answer concentrates more on the advantages but does refer to a possible disadvantage and its evaluation is simple. Nevertheless the range and balance of points is worthy of full marks.