Question:

4 In 2021, the Suez Canal was blocked by one of the world’s biggest container ships. This affected
some firms’ profits and caused a shortage in a number of products. The delivery of luxury chocolate
and salt, for example, was delayed. These two goods have differences in their price elasticity
of demand. The disruption to international trade created particular difficulties for those countries
which import most of the food they consume.
(a) Define a shortage. [2]
(b) Explain two ways a firm can increase its profit. [4]
(c) Analyse the reasons why the price elasticity of demand for one brand of luxury chocolates is
likely to be different from that of salt. [6]
(d) Discuss whether or not a country should import most of the food it consumes. [8]

Sample Answers: