Specialisation/Comparative Advantage

Question 1

Define comparative advantage

Answer 1

States country should specialise in producing relatively cheaper (eg lower opportunity costs) than other countries

Question 2

Benefits of specialisation

Answer 2

Trade liberalisation
Increased productivity
Greater economic growth, high incomes - increases standards of living
- rising incomes abroad mean EXPORT OPPORTUNITIES for UK

Question 3

Drawback of specialisation 1

Answer 3

Can become over reliant
Decline in industry
Structural unemployment/georgraphiclaly and occupational immobility

Question 4

Drawback of specilisation 2

Answer 4

Specialisation in commodities less value than manufacturing
Industrialisation means rapid rates growth
Comodities suffer from fluctuations

Question 5

Define specialisation

Answer 5

Concentrates on a particular area of the economy