WHSS Economics 2281: Specialization

If a country places a tax on imports of food, which group in the country is most likely to benefit?

A consumers

B farmers

C food importers

D supermarkets

• A

• B

• C

• D

In Indonesia the opportunity cost of producing timber is lower than in any other country. To protect the environment, the Indonesian government decides to conserve its timber and ban timber exports. What would happen in Indonesia to the balance of trade and external costs?

• A

• B

• C

• D

Chile specializes in the production of copper for export. How would the Chilean economy be affected by a large rise in the supply of copper from other countries?

• A

• B

• C

• D

What is an advantage of international specialisation?

A Choice is limited.

B Countries become over-dependent on each other.

C Resources are used more efficiently.

D Transport costs are decreased

• A

• B

• C

• D

Which economic argument is in favour of free trade?

A It allows countries to benefit from comparative advantage.

B It encourages the protection of domestic industries.

C It helps declining industries by slowing the rate of decline.

D It results in the expansion of all industries in a country.

• A

• B

• C

• D

The table shows the main source of export earnings by product for selected countries.

From this table we can conclude that

A all these countries specialise in the production of primary products.

B W and X specialise in the production of tertiary products.

C the largest % of export earnings from Y is from the sale of secondary products.

D export earnings of W and Z are identical.

• A

• B

• C

• D

Assuming nothing else is changed, what will be the effect if a country imposes tariffs?

A increased import prices

B increased export prices

C reduced government revenue

D reduced home production

• A

• B

• C

• D

The central area of a country produces tea for which it has an ideal climate. The coastal area produces coconuts because its climate is different. Assuming there is no change in market conditions, what will happen if this country subsequently produces only tea in both areas?

A It will increase its costs of production.

B It will increase the productivity of its land.

C It will increase its total income.

D It will make the best use of its resources.

• A

• B

• C

• D

What would contribute to a fall in the value of the UK pound (£)?

A a fall in interest rates in other countries

B a rise in the number of foreign tourists visiting the UK

C the removal of import tariffs by the USA

D the value of UK imports increasing more than the value of UK export

• A

• B

• C

• D

Why might a government encourage a monopoly?

A It can have high average costs.

B It can compete against foreign firms.

C It can prevent innovation.

D It can make excessive profits.

• A

• B

• C

• D