Paper 2 Qu 1 Cuban Farming DR

Question 1:

           

a. Define the following terms:

i. Allocation of resources (paragraph 3)

The process by which economic resources get allotted to their particular uses
for directly or indirectly satisfying human wants.

ii. Infrastructure (paragraph 4)

Numerous type of physical capital resulting from investments, making major
contributions to economic growth and development by lowering costs of
production and increasing productivity; include power, telecommunication,
major dam and etc 

iii. Competition (paragraph 5) 

Occurs when there are many buyers and sellers acting independently, none of
whom has any ability to influence the price of the product.

b. Explain, using a relevant diagram, what will happen in the market for organic food if
many urban dwellers leave their jobs and move into organic farming (paragraph 1 &
2). (4 marks)

Then there will be an an excess quantity of organic food and there will be a lower
cost for it 
 c. Explain, using a relevant diagram, what may happen in the market for non-organic
vegetables if there is an increase in the market supply of organic vegetables due to
the greater number of urban farms.

Then there will be a decrease in price since there is excess supply and little demand to keep
up

(4 marks)

d. Calculate how much food by value the average private Cuban farm produces on each
hectare of land (a unit of land) if Cuba produced US$ 50bn worth of food, on 600,000
hectares of land, using the figures given in paragraph 2.

50,000,000,000/ 600,000 x 40% = $20.833 (2

marks)
 e. Explain, using a relevant diagram, what might happen in the market for agricultural
land near urban areas as a result of this Cuban government programme, and why
existing land-owners may benefit as a result.

due to the government intervention allows other local businesses

(4 marks)

f. Organic farming is likely to be more environmentally friendly than non-organic

farming, which uses fertilizers and pesticides, yet it may result in less output per
hectare of land farmed. Discuss the advisability of the Cuban government’s decision
to promote more organic farming. (10 marks)