What might encourage international specialisation between countries?
free trade
inefficiencies in production
labour immobility
tariffs
Which condition would most effectively promote involvement in international trade?
Global shipping costs fall significantly due to improvements in transport technology
Fuel taxes increase sharply, raising the cost of transporting goods abroad
Communication systems become less reliable, disrupting coordination with buyers
Export regulations require additional inspections for every overseas shipment
What is most likely to promote international specialisation?
similarities in climate in different countries
similarities in the availability of natural resources in different countries
instability in foreign exchange rates
the abolition of tariffs and customs duties
What will increase the level of specialisation in an economy?
A computer manufacturer takes over an advertising company.
A retail store issues its own credit card.
A travel agent provides transport to the airport.
A vehicle assembler reduces its range of vehicles.
What is an advantage of international specialisation?
Choice is limited.
Countries become over-dependent on each other.
Resources are used more efficiently.
Transport costs are decreased.
A nation is deciding whether to specialise in high-technology production. Which factor would provide the strongest economic justification for this choice?
A labour force with advanced engineering skills that supports innovation
A strict import-control system limiting access to essential electronic components
A rise in taxes on high-value goods produced for the international market
A shortage of modern equipment due to outdated production facilities
A country aims to increase efficiency by concentrating its resources on goods where it has advantages. Which factor most strongly supports specialisation?
Natural cost advantages arising from unique environmental conditions
Frequent power shortages that interrupt production processes in key industries
Newly introduced legal barriers that complicate international marketing
Rising import prices for essential materials used in manufacturing
A student claims that globalisation encourages countries to specialise. Which situation best supports this statement?
Access to global supply chains allows firms to reduce costs
Strict border closures prevent firms from exporting or importing goods
New certification requirements increase the cost of international trade
Regulations become more detailed, slowing down import procedures
A nation debates whether its heavy specialisation in electronics is beneficial. Which option best reflects a major advantage of specialisation?
The country must invest more heavily in diversification to stabilise its economy
The country becomes more exposed to external shocks affecting global supply chains
The country benefits from economies of scale as firms expand high-volume production
The country faces higher risks if demand for electronic goods declines sharply
What is an advantage for consumers from international specialisation?
competition between firms results in lower prices
labour can move more freely between countries
less wealth is created throughout the world
multinational companies can increase their profits
A country specialises in the production of steel, toys and textiles. What is a disadvantage of specialisation for the country’s workers?
They cannot afford to buy products from other countries.
They could become structurally unemployed if global demand changes.
They have to learn a variety of skills.
They have too much choice which wastes their time.
A country specialising in tourism may be vulnerable to:
Global economic downturns
Rising commodity prices
Technological improvements
Exchange rate stability
A country identifies several concerns on specialisation in primary commodities. Which concern best highlights a limitation of specialising in this area?
The country becomes vulnerable to volatile global prices for primary commodities
The country may adopt new training programmes that improve labour productivity
The country may enjoy more reliable transport links as infrastructure improves
The country may attract additional foreign investment into domestic industries
A country has abundant oil, but it produces a wide range of goods rather than specialise in oil production. What is not a reason in favour of this decision?
Oil is a non-renewable resource that could be exhausted quickly.
Producing a wide range of goods increases the benefits from free trade.
Relying on other countries for vital goods and services makes a country vulnerable.
The price of oil is volatile, making export revenue unstable.
Chile specialises in producing copper for export. In what way is the Chilean economy likely to be affected by a large rise in the global supply of copper?
employment falls; economic growth falls.
employment falls; economic growth rises.
employment rises; economic growth falls.
employment rises; economic growth rises.