Cambridge O Level Economics: Differences in economic development between countries (2281) – Practice Questions

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs – examination boards hold copyright in their own papers. Use these alongside the official past papers from your board or school.

These questions cover section 5.4 (5.4.1) of the Cambridge O Level Economics (2281) syllabus for examination in 2026, version 2. Tiers do not apply to this course, and every country and figure is made up for illustration. Start with the study guide and the revision notes. Other links: the Cambridge O Level Economics hub and the printable checklist. Write your own answer before reading the worked answer.

Questions

1. Define productivity. [2]

2. Country W has GDP of 21,600 million and 9 million people. Country X has GDP of 270,000 million and 4.5 million people.

(a) Calculate income per head in W. [1] (b) Calculate income per head in X. [1] (c) State how many times larger income per head is in X than in W. [1]

3. Country Y produces 30,000 million with 4 million workers. A year later it produces 32,400 million with the same workers. Calculate the percentage rise in output per worker. [4]

4. In Country S, GDP grows by 3.6% and the population by 2.4%.

(a) Calculate the approximate and the exact growth in income per head. [2] (b) Explain why growth in income per head is lower than growth in GDP. [2]

5. Country Z has a GDP of 40,000 million. The primary sector produces 38% of it, the secondary sector 17% and the tertiary sector 45%.

(a) Calculate the value of primary output. [1] (b) Explain why a large primary sector may keep income per head low. [3]

6. Country V has GDP of 50,000 million and 5 million workers, and invests 9% of GDP. Country U has GDP of 200,000 million and 2 million workers, and invests 24% of GDP.

(a) Calculate investment per worker in each country. [3] (b) Explain how this difference could affect future incomes. [3]

7. Explain two reasons why saving is low in a low-income country. [4]

8. Explain two ways in which low spending on education could lead to lower income per head. [4]

9. In Country T, workers lose 20 of 250 working days a year to illness. The workforce is 3 million and output per worker is 7,000.

(a) Calculate the percentage of working time lost. [1] (b) Calculate the number of full-time worker-years lost. [1] (c) Calculate the output lost, in millions, assuming it falls in proportion. [1] (d) Explain one other impact of poor healthcare on development. [2]

10. Explain why a country with a high birth rate may have a low level of saving. [4]

11. Evaluate whether investment is the most important cause of differences in economic development between countries. [8]

Answers

1. Productivity is the output [1] obtained from each unit of a resource used, such as per worker or per hour [1]. [2] Examiner insight: “Output” alone, or “how much a firm produces”, does not show the per-input idea; name the input.

2. (a) 21,600 ÷ 9 = 2,400 [1]. (b) 270,000 ÷ 4.5 = 60,000 [1]. (c) 60,000 ÷ 2,400 = 25 times [1]. [3] Examiner insight: Write out each division so that your method is visible even if one figure is wrong.

3. Output per worker at first: 30,000 ÷ 4 = 7,500 [1]. A year later: 32,400 ÷ 4 = 8,100 [1]. Change = (8,100 − 7,500) ÷ 7,500 [1] = 8% [1]. [4] Examiner insight: The base of a percentage change is the starting figure. Using the later figure is a common slip, and a bare percentage leaves nothing to show your method.

4. (a) Approximate 3.6 − 2.4 = 1.2% [1]. Exact 1.036 ÷ 1.024 − 1 = 1.17% [1]. (b) Population growth must be subtracted [1] because the same output is shared among more people, so each person’s share grows more slowly [1]. [4] Examiner insight: Tie the explanation to sharing output among people; “population is growing” without that link is only a restatement.

5. (a) 0.38 × 40,000 = 15,200 million [1]. (b) Output per worker in primary activity is often low, so the sector adds little value per worker [1]. Raw material prices fluctuate with weather and world demand, so incomes are unstable [1]. If most workers are in this sector, average income per head stays low [1]. [4] Examiner insight: A three-mark explanation usually needs a cause, a link and an impact, not three separate statements.

6. (a) V: 0.09 × 50,000 = 4,500 million, so 4,500 ÷ 5 = 900 per worker [1]. U: 0.24 × 200,000 = 48,000 million [1], so 48,000 ÷ 2 = 24,000 per worker [1]. (b) Less capital per worker in V [1] means lower productivity [1] and lower output and incomes, and the gap widens as U’s capital grows faster [1]. [6] Examiner insight: Work out total investment first, then divide by workers. Giving only the percentages misses the per-worker comparison the question asks for.

7. Reason one: incomes are low [1], so most is spent on necessities and little remains to save [1]. Reason two: weak or distant banks [1], so people hold cash or goods rather than deposits [1]. (Other valid reasons include high inflation or political risk.) [4] Examiner insight: Each reason needs developing. “Low income” alone is a statement, so add what happens to spending and saving.

8. Way one: fewer skilled workers [1], so productivity is lower and output per worker is low [1]. Way two: less ability to use new technology [1], so firms cannot adopt methods that raise output, or foreign firms do not invest [1]. [4] Examiner insight: Finish each chain at income per head or output, which is what the question asks about.

9. (a) 20 ÷ 250 × 100 = 8% [1]. (b) 0.08 × 3 million = 240,000 worker-years [1]. (c) 240,000 × 7,000 = 1,680,000,000, which is 1,680 million [1]. (d) Poor health lowers school attendance [1], so fewer skills are built and productivity stays low [1]. (Other valid impacts include shorter working lives and higher family spending on medicine.) [5] Examiner insight: Convert units carefully, because the output is in millions: 240,000 workers multiplied by 7,000 gives 1,680,000,000, not 1,680. State the unit with the final answer, and show the multiplication so the method is visible.

10. A high birth rate means many children [1], so a large share of the population are dependants [1]. Households spend more on food and schooling [1], leaving little to save, so fewer funds reach banks for investment [1]. [4] Examiner insight: Move step by step from births to dependants to household spending to saving. A skipped link leaves the reasoning incomplete, so write each one out, even if it feels obvious. Saying only that children are costly does not reach saving.

11. Argument for [1]: investment adds capital per worker, which raises productivity and income [1]. Without it, skilled and healthy workers have too few machines [1]. Argument against [1]: investment needs saving, which depends on income and confidence, so it is often an effect, not a first cause [1]. Education and health raise the benefit of each machine, since skilled, healthy workers use capital more productively [1]. Judgement: investment is the most direct route to higher output, but it works best alongside skills and stability [1], and the answer depends on which factor is scarcest in the country [1]. [8] Examiner insight: A strong evaluation weighs factors and reaches a reasoned conclusion. A list of causes with no judgement stays at description.

Where marks are usually lost

• Giving income per head when the question asks about GDP, or the reverse.
• Using the later year as the base of a percentage change.
• Using the approximate rule when the question asks for an exact figure.
• Explaining causes only, when impacts are also required.
• Stating “low income” or “poor health” with no chain to output or income.
• Leaving units out of calculations, especially “million”.
• Treating a large population as always good or always bad.
• Writing an evaluation with no conclusion, or a conclusion that ignores the points above it.

Next steps

• Review the revision notes and the study guide.
• Open the Cambridge O Level Economics hub and the printable checklist.
• Try a free 10-minute diagnostic.
• Book a free trial class.

Official syllabus

Cambridge O Level Economics 2281 syllabus for examination in 2026, version 2, published by Cambridge University Press & Assessment (Cambridge International Education).