Exam code: 0455 & 0987
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Define specialisation.
Specialisation is when individuals, businesses, regions, or countries focus on producing one type of good or service to increase efficiency and expertise.
What is an example of specialisation at the national level?
An example of national specialisation is Bangladesh specialising in textiles and exporting them to the world.
What factor allows a country to specialise by charging higher prices for its products?
A country can charge higher prices for its products if it has superior quality resources.
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Define specialisation.
Specialisation is when individuals, businesses, regions, or countries focus on producing one type of good or service to increase efficiency and expertise.
What is an example of specialisation at the national level?
An example of national specialisation is Bangladesh specialising in textiles and exporting them to the world.
What factor allows a country to specialise by charging higher prices for its products?
A country can charge higher prices for its products if it has superior quality resources.
Name one advantage and one disadvantage of national specialisation.
An advantage is more efficient use of resources; a disadvantage is over-dependence on certain industries.
True or False?
Specialisation can make a country's economy less flexible if global demand changes.
True.
Specialisation can reduce a country’s flexibility, making it hard to adapt quickly to new industries if global demand shifts.
How does national specialisation encourage trade and variety for consumers?
National specialisation allows countries to export goods they produce efficiently and import others, giving consumers more choice.
What risk does over-dependence on one industry pose to a country?
Over-dependence on one industry means that if demand falls or the sector declines, the whole economy may suffer.
Define economies of scale.
Economies of scale are the cost advantages that businesses obtain due to increased production, leading to lower average costs.
Define free trade.
Free trade is the exchange of goods and services between countries without trade barriers, such as tariffs, quotas or import bans.
Free trade leads to choice as countries can access a wider variety of goods and services.
Free trade leads to greater choice as countries can access a wider variety of goods and services.
How does free trade affect prices for consumers?
Free trade usually leads to lower prices for consumers due to increased international competition.
Without protection from foreign competition, firms may struggle to survive, leading to closures and job losses.
Without protection from foreign competition, domestic firms may struggle to survive, leading to closures and job losses.
What is over-dependence on imports and why is it a risk?
Over-dependence on imports happens when a country relies heavily on foreign goods, which risks shortages if global supply chains are disrupted.
Define structural unemployment.
Structural unemployment is when jobs are lost in industries that shrink or close due to competition, such as from imports.
True or False?
Free trade can lead to trade deficits if a country imports more than it exports.
True.
A trade deficit occurs when imports exceed exports, which can cause long-term economic issues.
International competition through free trade increases , allowing the most efficient firms to thrive.
International competition through free trade increases efficiency, allowing the most efficient firms to thrive.
How can free trade contribute to economic growth in a country?
Free trade can lead to economic growth by increasing exports, which boosts GDP and creates jobs.
What are two potential environmental impacts of free trade?
Free trade can increase carbon emissions from transporting goods and may encourage lower environmental standards in some countries.