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Sustainable Development · Paper 1 — Free Economics HL Practice Questions
1MasterySAQ-SEnvironmental and social implications of economic growth8 marksPaper 1~12 min
A developing nation, Country Y, has pursued rapid industrialisation to boost economic growth. Its GDP has grown by annually for five years. Air pollution levels in its capital city have tripled, and the incidence of respiratory diseases has increased by .
(a)
Draw a correctly labelled Production Possibility Frontier (PPF) with environmental quality on the vertical axis and real GDP on the horizontal axis. On your , show a movement from point A to point B that illustrates the trade-off Country Y faces. [2 marks]
(b)
Explain, using your , how rapid industrialisation in Country Y has led to negative externalities. [2 marks]
(c)
Evaluate whether the trade-off between economic growth and environmental quality in Country Y is permanent. [4 marks]
Solutions
2MasterySAQ-SEnvironmental and social implications of economic growth8 marksPaper 1~12 min
A coastal community relies on fishing for its livelihood. A factory is built nearby, creating 200 jobs and increasing local GDP by . The factory releases untreated wastewater into the sea, reducing local fish stocks by .
(a)
Draw a fully labelled for the factory's output market, showing the negative externality arising from wastewater pollution. [2 marks]
(b)
Using your , explain why the factory's production leads to a market failure. [2 marks]
(c)
Evaluate whether a government-imposed tax on the factory's output is the most appropriate policy to correct this market failure. [4 marks]
Solutions
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