Economics Questions Plan

Analyse why there might be a conflict between ethical behaviour and profitability in the cigarette industry. (6)

I believe there might be a conflict between ethical behaviour and profitability because the cigarette industry is highly profitable for governments and therefore if governments made cigarettes illegal they would not get any of the $494 million that the fourth biggest tobacco firm makes. On the other hand it would benefit people’s health a lot. However there will just become a black market for cigarettes as there is with other illegal substances and therefore people that are addicted will still be able to get hold of them.

If cigarettes remain legalised the government can argue that people have a choice of whether they wish to smoke or not and the revenue cigarettes can benefit for the country in other ways for example, by providing money for the NHS.

Evaluate whether the Indian Government should encourage further foreign investment into the country. (15)

Yes because…

• They bring in revenue for the country they are in
• They can improve the country’s infrastructure
• They teach employees skills which are transferable – e.g. technological skills
• Joint ventures can be formed which can bring more revenue into the country – The Indian company gets to keep 51% of the revenue therefore protecting them and keeping more profit in the country.

No because…

• The MNC can have more power than the government in the long term and leave the government powerless

Assess the extent to which the activities of a multinational, such as Enel, can be controlled by pressure groups. (9)

• Pressure groups can influence consumers into decisions

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