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WorksheetsSpecialisation and Trade
Total questions: 10
Worksheet time: 5mins
Which of the following is a benefit of international trade?
Increase in human rights violations
Production of CO2 emissions
An increase in living standards
Increased employment in the importing country
What is absolute advantage?
When one country can produce a good or service at a lower opportunity cost
Refers to the difference between consumers willingness to pay for a product and the market price
Refer to costs to third parties who are involved in trade
Implies that a country can produce more of a good or service with the same amount of resources.
What is comparative advantage?
When another country can produce a good/service at a lower opportunity cost
When a country can produce more with the same amount of resources
Refers to the price that has been charged by one part of a company for products and services to another part of the same company
The interconnectedness between countries
Which country has the comparative advantage in ‘maize’?
Country A
Country B
Country A and Country B
Neither
Which is an assumption of the law of comparative advantage?
Constant returns to scale
No transport costs
No trade barriers
All of the above
What is an advantage of specialisation and trade?
Increase in power of domestic monopolies
Diseconomies of scale
Lower prices; increased choice
Lower living standards
An advantage of specialisation and trade is increased employment resulting from an increase in world output.
True
False
A disadvantage of specialisation of trade is a balanced development of economies, having every industry in the economy developing at the same time.
True
False
Which is a problem for developing economies from specialisation and trade?
Higher living standards
Lower prices
Infant industries may be unable to compete and go out of business
Developed industries may be unable to compete
Which country has absolute advantage in smartphones?
Country A
Country B
Neither
Both
