Practise evaluating arguments for and against protectionism by weighing consumer, producer, employment and welfare effects.
Assess whether free trade is always better than a policy of protectionism for a developing economy that wishes to trade internationally.
Use Table A: AO1 Knowledge and understanding and AO2 Analysis and Table B: AO3 Evaluation to mark candidate responses to this question.
AO1 and AO2 out of 8 marks. AO3 out of 4 marks.
Indicative content
Responses may include:
AO1 Knowledge and understanding and AO2 Analysis
- Analysis of the advantages and disadvantages of free trade and
- Analysis of the advantages and disadvantages of protectionism
- Both in the context of a developing economy.
Guidance:
The advantages of free trade may include:
- Efficient allocation of resources due to specialisation and comparative advantage.
- An opportunity to take advantage of different factor endowments.
- Competitive pressure to keep costs down / increase efficiency / lower prices for consumers.
- Higher output / economies of scale and increased choice and availability for consumers.
- Disadvantages may include:
- Over exploitation of scarce resources.
- Closure of domestic industries and /or problems for developing industries leading to unemployment particularly in a developing economy.
- Dumping / unfair competition.
- It is likely that the advantages of protectionism will result from the disadvantages of free trade and the disadvantages of protectionism will result from the advantages of free trade.
Level 1 responses will be assertive and lacking in explanations / mainly descriptive and/or or mainly lacking in relevance to the question.
Level 2 responses may contain some inaccuracies and will be one sided. Analysis will be explained at least in part and will be largely relevant to the question.
Level 3 responses will consider alternative policies / concepts etc. and will be balanced. Explanations of points raised will be offered and will be accurate and relevant to the question.
NOTE: if the analysis is not in the context of a developing economy, then L2 maximum.
5(b)
AO3 Evaluation
- Requires an assessment of the advantages and disadvantages of both free trade and protectionism in the context of a developing economy and a comparison of both policies which leads to
- A justified conclusion as to which policy may be best for a developing economy that wishes to trade internationally.
- Note: if the evaluation is not in the context of a developing economy, then no evaluation marks can be awarded.
A one-sided response cannot gain any marks for evaluation.
Please use a text box to show the mark split e.g., L2 5 L1 2
AO1 Knowledge and understanding and AO2 Analysis
AO3 Evaluation