2025 Cambridge IGCSE Economics (0455) Practice Paper with Answers

Reallocating resources from consumer goods to capital goods means producing more capital goods (which are on the vertical axis) and fewer consumer goods (which are on the horizontal axis). Point W represents high consumer goods and low capital goods production. Point V represents high capital goods and low consumer goods production. Therefore, the movement is from W to V.

1 mark for the correct option B.

Fertile land is classified under 'land' as a factor of production. Automated irrigation systems are manufactured resources used in production, which are classified under 'capital'. Therefore, land and capital have changed.

1 mark for the correct option B.

The advertising campaign increases demand, shifting the demand curve to the right (increasing both price and quantity). The technological breakthrough increases supply, shifting the supply curve to the right (decreasing price and increasing quantity). Since both shifts increase quantity, the equilibrium quantity will definitely rise. However, the effect on price is uncertain because the demand shift increases price while the supply shift decreases it.

1 mark for the correct option C.

Price elasticity of demand (PED) is calculated as:
$$\text{PED} = \frac{\% \Delta Q_d}{\% \Delta P}$$

Let's test the option from $4 to $2:
- % change in Price = $$\frac{2 - 4}{4} \times 100 = -50\%$$
- % change in Quantity = $$\frac{200 - 130}{130} \times 100 = +53.8\%$$
- $$\text{PED} = \frac{53.8\%}{50\%} = 1.08 > 1$$ (Price-elastic).

For all other options, the absolute value of PED is less than 1 (price-inelastic).

1 mark for the correct option D.

A central bank operates as the government's bank and the bank for commercial banks. One of its key functions is to act as a lender of last resort to commercial banks experiencing liquidity shortages. Accepting deposits and providing loans to individuals/businesses are functions of commercial banks.

1 mark for the correct option B.

Geographical mobility is the ease with which workers can move from one location to another for employment. Regional relocation grants reduce the financial burden of moving, making it easier for workers to relocate to areas where jobs are available.

1 mark for the correct option B.

At 0 output, Total Cost is $50, which represents the Total Fixed Cost (TFC).
At 20 units of output, Total Cost (TC) is $180.
Total Variable Cost (TVC) = TC - TFC = $180 - $50 = $130.
Average Variable Cost (AVC) = TVC / Output = $130 / 20 = $6.50.

1 mark for the correct option B.

Cyclical (or demand-deficient) unemployment occurs due to a lack of aggregate demand in the economy, typically during a recession or economic downturn, which leads to widespread job losses across multiple sectors.

1 mark for the correct option A.

Skilled woodcarvers represent labour, and the reward for labour is wages. Carving machinery is capital (reward is interest), the workshop is land (reward is rent), and the founder represents enterprise (reward is profit).

1 mark for the correct answer C.

Net emigration of skilled workers reduces the total quality and quantity of the labour force available in the economy. This decreases the economy's maximum productive capacity, causing the PPC to shift inwards.

1 mark for the correct answer D.

For the price interval from $6 to $4, the percentage change in price is ((4 - 6) / 6) * 100 = -33.3%. The percentage change in quantity demanded is ((22 - 20) / 20) * 100 = +10%. The PED is 10% / -33.3% = -0.3. Since the absolute value of PED (0.3) is less than 1, demand is inelastic in this range. Other intervals are elastic: from $12 to $10 (PED = 9), from $10 to $8 (PED = 5), and from $8 to $6 (PED = 4).

1 mark for the correct answer D.

High profit margins mean the firm can absorb higher wage costs without reducing output or raising prices. A shortage of skilled labor gives workers strong bargaining power because they cannot be easily replaced, making job cuts highly unlikely.

1 mark for the correct answer D.

At 0 units of output, the total cost is $100, which represents the firm's total fixed cost (TFC). At 20 units of output, the total cost is $240. The total variable cost (TVC) is Total Cost minus TFC, which is $240 - $100 = $140. The average variable cost (AVC) is TVC divided by output: $140 / 20 = $7.00.

1 mark for the correct answer B.

Structural unemployment is caused by a mismatch of skills. Retraining schemes increase the occupational mobility of workers, allowing them to acquire new skills suitable for expanding industries. This is a supply-side policy because it directly improves the productive capacity and skills of the labor force.

1 mark for the correct answer C.

To find the weighted CPI in Year 2, multiply each price index by its respective weight and sum the results: Food: 110 * 0.40 = 44; Housing: 105 * 0.40 = 42; Transport: 120 * 0.20 = 24. Weighted CPI = 44 + 42 + 24 = 110.

1 mark for the correct answer B.

A depreciation of country X's currency means it takes more units of country X's currency to buy foreign goods and raw materials. Consequently, the domestic price of imported raw materials in country X will rise, potentially causing imported cost-push inflation.

1 mark for the correct answer B.

Government relocation grants directly reduce the financial barrier associated with moving to another region, thereby increasing the geographical mobility of labour. Rising rents (A) and lack of information (B) decrease mobility, while regional tax differences (D) can complicate it.

1 mark for the correct option C.

Washing machines are man-made aids to production (capital), and counter staff are human effort in production (labour).

1 mark for the correct option B.

Opportunity cost is the next best alternative forgone. When moving along a PPC to produce more consumer goods, the economy must give up (forgo) some production of capital goods.

1 mark for the correct option A.

Macroeconomics deals with the economy as a whole. A rise in the total level of consumer expenditure is a macroeconomic outcome, whereas smartphone prices, bakery profits, and supermarket wages are microeconomic issues.

1 mark for the correct option B.

An increase in popularity shifts the demand curve to the right, which increases both price and quantity. A reduction in production costs shifts the supply curve to the right, which decreases price and increases quantity. Combining both shifts, the quantity traded definitely increases, but the effect on price is uncertain because it depends on the relative magnitude of the shifts.

1 mark for the correct option D.

Elasticity is calculated as: $\text{PED} = \frac{\% \text{ change in quantity demanded}}{\% \text{ change in price}}$.
- From $10 to $8: Price decreases by $20\%$. Quantity increases by $50\%$. $\text{PED} = 50 / 20 = 2.5$ (elastic).
- From $8 to $6: Price decreases by $25\%$. Quantity increases by $20\%$. $\text{PED} = 20 / 25 = 0.8$ (inelastic).
- From $6 to $4: Price decreases by $33.3\%$. Quantity increases by $11.1\%$. $\text{PED} = 11.1 / 33.3 = 0.33$ (inelastic).

1 mark for the correct option A.

In the long run, all factors of production are variable, meaning growers can purchase more land, glasshouses, and tools to respond more fully to a change in price, making supply more elastic.

1 mark for the correct option B.

Money acts as a unit of account (or measure of value) when it is used to express and compare the relative values/prices of different goods and services.

1 mark for the correct option C.

Relocation grants reduce the financial cost for workers to move from one region to another to find work, thereby increasing their geographical mobility. Higher university fees (A) may discourage training, reducing occupational mobility. Raising the minimum wage (C) does not target geographical barriers directly. Reducing transport (D) would make it harder to travel, decreasing mobility.

1 mark for the correct answer B.

To test if demand is price-elastic, we can look at the change in total revenue (TR = Price × Quantity) as price falls:
- At Price = $10, TR = $1,000.
- At Price = $8, TR = $880 (TR decreased, so demand is inelastic).
- At Price = $6, TR = $780 (TR decreased, so demand is inelastic).
- At Price = $4, TR = $640 (TR decreased, so demand is inelastic).

Since total revenue decreases for every fall in price shown, the demand is inelastic for all price falls.

1 mark for the correct answer D.

Commercial banks provide retail banking services, such as current accounts and personal loans, directly to individuals and businesses. Acting as a lender of last resort (A), managing national debt (B), and regulating the money supply (D) are functions of a central bank.

1 mark for the correct answer C.

Total Cost (TC) is equal to Total Fixed Cost (TFC) + Total Variable Cost (TVC).
First, calculate TVC:
$$\text{TVC} = \text{Average Variable Cost (AVC)} \times \text{Output}$$
$$\text{TVC} = \$6 \times 500 = \$3,000$$
Then, add TFC:
$$\text{TC} = \$2,000 + \$3,000 = \$5,000$$

1 mark for the correct answer C.

The overall percentage change in the CPI is the weighted average of the individual price changes:
$$\text{Overall change} = (10 \times 0.40) + (5 \times 0.50) + (-2 \times 0.10)$$
$$\text{Overall change} = 4.0 + 2.5 - 0.2 = 6.3\%$$

1 mark for the correct answer B.

A higher rate of inflation relative to trading partners makes a country's exports less price-competitive and foreign imports more attractive. This reduces the demand for the domestic currency and increases its supply on the foreign exchange market, leading to a currency depreciation. An increase in domestic interest rates (A), export demand (B), or foreign direct investment (D) would increase demand for the currency, causing it to appreciate.

1 mark for the correct answer C.

### **Worked Solutions**

**1 (a)**
$$\frac{\$24\text{bn}}{\$240\text{bn}} \times 100 = 10\%$$
*(Accept 10 without % sign)*

**1 (b)**
Any two from the text:
* Reduces carbon dioxide / air pollution
* Provides habitats for wildlife
* Prevents soil erosion

**1 (c)**
* Ecotourism is an export of services (invisible export) because foreigners spend money inside Peru **[1]**
* This increases the credit item on the current account, improving the current account balance (reducing a current account deficit or increasing a surplus) **[1]**

**1 (d)**
* **Reason 1:** Copper is a finite / non-renewable resource that will eventually run out **[1]**. Over-reliance on it means that future revenues, employment, and GDP will decline when reserves deplete **[1]**.
* **Reason 2:** Mining creates water and soil contamination (negative externalities/external costs) **[1]**, which damages public health, reduces environmental quality, and negatively impacts other key sectors like agriculture or tourism **[1]**.

**1 (e)**
* Axes correctly labelled: Price (y-axis) and Quantity (x-axis) **[1]**
* Original demand (D) and supply (S) curves correctly drawn and labelled, with initial equilibrium ($P_1, Q_1$) **[1]**
* Supply curve shifted to the right ($S_1$ to $S_2$) **[1]**
* New equilibrium clearly shown with lower price ($P_2$) and higher quantity ($Q_2$) **[1]**

**1 (f)**
* **Expected relationship:** There is an inverse/negative relationship between the secondary school enrollment rate and the percentage of the labor force employed in agriculture **[1]**; as school enrollment rates rise, agricultural employment falls **[1]**.
* **Supporting evidence:** Honduras has the lowest enrollment rate (60%) and the highest agricultural employment (35%), while Chile has the highest school enrollment rate (90%) and the lowest agricultural employment (8%) **[1]**.
* **Economic analysis:** Higher secondary school enrollment rates lead to a more educated, skilled, and literate workforce **[1]**. Skilled workers are more capable of securing employment in higher-paying secondary and tertiary sector industries (such as electronics assembly or services) rather than manual agricultural labor **[1]**.

**1 (g)**
* **Arguments for subsidising wages (Up to 4 marks):**
* It lowers the cost of hiring for private sector firms, encouraging them to take on more young workers **[1]**.
* Apprenticeships help young people gain practical, high-value technical skills, boosting their long-term productivity and structural employability **[1]**.
* It directly reduces youth unemployment, reducing the fiscal burden of unemployment benefits and welfare payments **[1]**.
* Higher employment increases household disposable incomes, boosting aggregate demand and economic growth **[1]**.
* **Arguments against subsidising wages (Up to 4 marks):**
* There is an opportunity cost involved; government funds spent on wage subsidies could instead be allocated to improving public infrastructure or state education **[1]**.
* Firms may act corruptly or offer poor-quality training, using the young workers as cheap, unskilled labor without providing genuine skill development **[1]**.
* It can lead to 'deadweight loss' if private firms would have hired these young workers anyway even without the subsidy **[1]**.
* It represents a major government expenditure that might require tax increases elsewhere, hurting economic efficiency **[1]**.

**1 (h)**
* **Arguments that average costs will fall (Up to 4 marks):**
* Firms can experience internal economies of scale, such as technical economies of scale by investing in advanced, automated assembly machinery **[1]**.
* Purchasing economies of scale can be achieved by buying electronic components (like lithium batteries or copper wires) in bulk at discounted prices **[1]**.
* Division of labor and worker specialization can increase worker productivity, decreasing the cost per unit of production **[1]**.
* Financial economies might allow larger firms to secure loans at lower interest rates from banks **[1]**.
* **Arguments that average costs will not fall (Up to 4 marks):**
* Firms may encounter internal diseconomies of scale, such as communication problems, leading to slow decision-making in giant corporations **[1]**.
* Demotivation of workers doing repetitive assembly-line tasks can lead to labor inefficiency, absenteeism, and lower productivity **[1]**.
* External diseconomies of scale may rise, such as increased local competition for skilled electronics engineers bidding up wages and production costs **[1]**.

### **Marking Scheme**

* **1 (a)**
* 1 mark for correct calculation ($10\%$ or $10$).

* **1 (b)**
* 1 mark for each identified external benefit up to a maximum of 2.
* *Acceptable:* reduces carbon dioxide / air pollution, provides habitats for wildlife, prevents soil erosion.

* **1 (c)**
* 1 mark for explaining that tourism is an export of services (or invisible export).
* 1 mark for explaining that this improves the current account balance (reduces deficit or increases surplus).

* **1 (d)**
* 1 mark for each of two reasons identified **[2]**.
* 1 mark for each of two logical explanations **[2]**.
* *Acceptable reasons:* Non-renewable resources run out, environmental pollution (negative externalities).

* **1 (e)**
* 1 mark for correctly labelled axes (P and Q).
* 1 mark for correctly labelled D and S curves with initial equilibrium.
* 1 mark for showing a rightward shift of the supply curve.
* 1 mark for showing a lower equilibrium price and higher equilibrium quantity.

* **1 (f)**
* 1 mark for identifying the inverse/negative relationship.
* 1 mark for providing data/evidence from Fig 1.1 (such as Honduras vs Chile).
* Up to 3 marks for analyzing how education leads to diversification away from agriculture into tertiary/secondary sectors.

* **1 (g)**
* Up to 4 marks for logical arguments why the government *should* subsidise wages.
* Up to 4 marks for logical arguments why the government *should not* subsidise wages.
* Maximum of 6 marks overall.

* **1 (h)**
* Up to 4 marks for logical reasons why average costs of production *might* fall (identifying/explaining economies of scale).
* Up to 4 marks for logical reasons why average costs of production *might not* fall (identifying/explaining diseconomies of scale).
* Maximum of 6 marks overall.

(a) Factors of production used in agriculture can include:
- Land (e.g., fields, natural soil resources, water)
- Labour (e.g., farmworkers, tractor drivers)
- Capital (e.g., tractors, seeds, irrigation systems, fertilisers)
- Enterprise (e.g., the farm owner making decisions and taking risks)

(b) Reasons why a worker might choose to change occupations:
- Higher wages/salary: Manufacturing jobs may offer a higher pay rate than agricultural jobs, allowing the worker to improve their living standards.
- Better working conditions: Agriculture involves physically demanding manual labour in outdoor conditions exposed to elements, whereas manufacturing might offer indoor, safer, or cleaner environments.
- Shorter or more regular working hours: Farming is often subject to seasonal fluctuations and unpredictable hours, while factory shifts are typically fixed and regular.
- Better career prospects: Larger manufacturing firms may offer promotion opportunities, structured training, and career progression paths that small farms cannot provide.

(c) Analysis of how a national minimum wage causes unemployment:
- A national minimum wage acts as a price floor. If it is set above the current equilibrium wage rate, it makes labour more expensive for employers.
- As a result of higher labour costs, firms will reduce their demand for workers to maintain profitability, leading to job cuts and fewer vacancies.
- Simultaneously, the higher wage rate will attract more individuals to join the labour market, increasing the supply of labour.
- This divergence creates a gap where the quantity of labour supplied exceeds the quantity of labour demanded, resulting in classical (real-wage) unemployment.
- Additionally, firms may choose to replace expensive workers with capital-intensive machinery, further raising structural unemployment.

(d) Balanced discussion:
Arguments that a market economic system benefits consumers more:
- Consumer sovereignty: Resource allocation is guided entirely by consumer preferences and demand.
- Competition: Strong competition between private firms drives down prices and increases quality to win customers.
- Efficiency and Innovation: Firms have a profit incentive to minimise waste and introduce new, innovative products.
- Variety of choice: Private enterprise responds dynamically to consumer desires, leading to a massive range of options.

Arguments that a mixed economic system benefits consumers more (limitations of market systems):
- Provision of public goods: Market systems fail to provide non-excludable and non-rival goods (like street lighting or national defense), which the government provides in a mixed system.
- Under-consumption of merit goods: Healthcare and education are under-provided in free markets; governments subsidise or provide them directly, ensuring access for low-income consumers.
- Control of demerit goods: Market systems over-provide harmful goods like tobacco or pollution; a mixed system regulates or taxes these to protect consumer welfare.
- Protection against monopoly power: Governments in mixed systems can break up monopolies or control prices to prevent consumers from being exploited.

1(a) Identify two factors of production:
- 1 mark for each correct factor identified up to a maximum of 2 marks.
- Accept: Land, Labour, Capital, Enterprise.

1(b) Explain two reasons to change occupations:
- 1 mark for each reason identified (up to 2).
- 1 mark for each logical explanation of how it affects the worker (up to 2).

1(c) Analyse minimum wage and unemployment:
- Up to 6 marks for a coherent chain of analysis:
- Identifies minimum wage as a price floor / above equilibrium (1 mark).
- Explains increase in firm costs (1 mark).
- Explains contraction in demand for labour (1 mark).
- Explains expansion in supply of labour (1 mark).
- Details the resulting excess supply of labour / surplus (1 mark).
- Explains substitution of labour with capital (1 mark).

1(d) Discuss market vs mixed systems for consumers:
- Level 3 (6-8 marks): Balanced discussion examining both sides. Clear analysis of consumer benefits in a market system and how a mixed system resolves market failures to benefit consumers.
- Level 2 (3-5 marks): One-sided discussion or lacks depth in explanation of market failures / government interventions.
- Level 1 (1-2 marks): Simple statements or definitions without deep analysis.

(a) Inflation is defined as a sustained (1) increase in the general price level (1) of goods and services over a period of time.

(b) Consequences of a high rate of inflation:
- Reduction in real purchasing power: If prices rise faster than nominal incomes, consumers will be able to purchase fewer goods and services, reducing their standard of living.
- Loss of international competitiveness: If domestic prices rise faster than overseas prices, exports become relatively more expensive and imports become cheaper, worsening the trade balance.
- Wage-price spiral: Workers demand higher wages to keep up with cost of living increases, which increases production costs for firms, causing them to raise prices further.
- Uncertainty: Rapidly changing prices make it difficult for firms to plan investments, which can slow down long-term economic growth.

(c) Analysis of how an increase in interest rates reduces inflation:
- An increase in interest rates raises the cost of borrowing for both households and firms. This discourages taking out loans for consumption and capital investment.
- Higher interest rates also increase the incentive to save, as savers receive a better return on their money, which diverts funds away from active spending.
- Consequently, consumer expenditure and investment fall, reducing the level of aggregate demand (total demand) in the economy.
- A lower level of aggregate demand reduces the pressure on prices, slowing down demand-pull inflation.
- Additionally, higher interest rates may attract foreign financial investment, appreciating the exchange rate, making imports cheaper and lowering cost-push inflation.

(d) Balanced discussion:
Arguments that a country benefits from a current account surplus:
- Economic growth: A surplus means that exports exceed imports, representing a net injection of demand into the economy, boosting GDP.
- Employment: High export demand creates and sustains employment opportunities in exporting and supporting industries.
- Stronger currency reserves: It allows the country to build up reserves of foreign currency, enhancing financial stability.
- Debt reduction: Surplus funds can be used to pay off external debts or invest in assets overseas, generating future investment income.

Arguments that a country does *not* benefit from a current account surplus:
- Domestic shortages: Focusing heavily on exports can mean fewer goods are available for consumption at home, potentially reducing local living standards.
- Inflationary pressure: The continuous inflow of cash from export revenues can increase the domestic money supply and aggregate demand, causing demand-pull inflation.
- Currency appreciation: A persistent surplus can cause the exchange rate to rise, eventually making exports less competitive and imports cheaper, hurting local manufacturing.
- Protectionist retaliation: Trading partners running trade deficits against the surplus country may impose tariffs or quotas to restrict trade.

2(a) Define inflation:
- 1 mark for 'sustained / persistent / continuous' increase.
- 1 mark for 'general price level' (do not accept 'increase in prices of some goods').

2(b) Explain two consequences of inflation:
- 1 mark for each consequence identified (up to 2).
- 1 mark for each development explaining the impact on the macroeconomy or individuals (up to 2).

2(c) Analyse interest rates and inflation:
- Up to 6 marks for a sequential analysis:
- Higher borrowing cost and higher return on savings (1 mark).
- Decreased consumer spending / credit purchases (1 mark).
- Decreased firm investment (1 mark).
- Shift in aggregate demand downwards/leftwards (1 mark).
- Relieving demand-pull pressure on prices (1 mark).
- Mention of currency appreciation reducing import costs (1 mark).

2(d) Discuss current account surplus benefits:
- Level 3 (6-8 marks): A clear, balanced discussion looking at both economic benefits (growth, job creation) and drawbacks (inflation risk, currency appreciation, protectionism from partners) of a surplus.
- Level 2 (3-5 marks): One-sided analysis of either only benefits or only limitations, or lacks economic depth in explaining balance of payments concepts.
- Level 1 (1-2 marks): Simple descriptions of imports and exports without structured evaluation.

(a) Market failure occurs when the market forces of demand and supply (1) allocate resources inefficiently, leading to a net loss of social welfare (1).

(b) Types of taxes:
- Direct taxes: Taxes levied on income, profits, or wealth, paid directly by individuals or firms to the government (e.g., income tax, corporation tax).
- Indirect taxes: Taxes levied on goods and services, paid by consumers through higher retail prices and passed to the government by sellers (e.g., Value Added Tax, customs duties).
- Progressive taxes: Taxes where the percentage rate paid increases as the taxpayer's income increases, designed to reduce income inequality.
- Regressive taxes: Taxes where the proportion of income paid in tax falls as income rises, taking a larger percentage of a low-income earner's money.

(c) Analysis of how government spending on infrastructure increases economic growth:
- Short-term demand injection: Government expenditure on constructing solar farms, grids, and roads represents an injection into aggregate demand, causing an expansion in national output.
- Employment creation: The projects employ local engineers, construction workers, and specialists, increasing incomes and driving consumer spending (multiplier effect).
- Reduced business costs: Better infrastructure lowers transportation, power, and logistics costs for domestic firms, making production more efficient.
- Expanded productive capacity: Improvements in physical capital shift the economy's Long-Run Aggregate Supply (LRAS) outwards, raising potential GDP.
- Attracts FDI: Reliable infrastructure makes the country more attractive to foreign multinational companies, bringing in capital and technology.

(d) Balanced discussion:
Arguments for protecting domestic solar industries:
- Infant industry argument: Newly established domestic solar firms may have high average costs. Protection shields them from larger, established foreign firms until they achieve economies of scale.
- Job preservation: Restricting cheap imports protects domestic manufacturing jobs in the clean energy sector.
- Strategic energy security: Reducing foreign reliance for solar equipment ensures national control over renewable energy transitions.
- Countering unfair competition: Tariffs can offset foreign dumping if international competitors are subsidised heavily by their home governments.

Arguments against protecting domestic solar industries:
- Increased costs: Tariffs on foreign solar panels raise prices for domestic consumers and installation firms, slowing down the transition to renewable energy.
- Lack of competition: Protection can make domestic firms inefficient, reducing their incentive to innovate or lower prices.
- Risk of retaliation: Affected trading partners might impose retaliatory tariffs on other major domestic export sectors, hurting national trade balance.
- Allocation of resources: Restricting trade prevents the country from exploiting comparative advantage, leading to an inefficient allocation of global resources.

3(a) Define market failure:
- 1 mark for mentioning 'market forces / free market'.
- 1 mark for 'inefficient allocation of resources' or 'welfare loss'.

3(b) Explain two types of taxes:
- 1 mark for each type identified (up to 2).
- 1 mark for each correct description/example explaining how it raising revenue (up to 2).

3(c) Analyse government spending and economic growth:
- Up to 6 marks for a sequential analysis:
- Explains the short-run impact of spending on aggregate demand (1 mark).
- Explains income and employment generation effects (1 mark).
- Explains the long-run impact on costs of production for firms (1 mark).
- Explains the increase in productive capacity / potential GDP (1 mark).
- Links lowering of costs to export competitiveness or attracting FDI (1 mark).

3(d) Discuss protection of solar industries:
- Level 3 (6-8 marks): A well-developed, balanced response showing deep understanding of infant industry arguments, transition speeds of clean energy, job creation, and risks of protectionism (inefficiency and trade wars).
- Level 2 (3-5 marks): Discussion is present but unbalanced, or key terms (like tariffs, economies of scale) are used without clear explanation of their economic consequences.
- Level 1 (1-2 marks): Basic list of pros and cons of protectionism without focus on the solar industry context.