Economics 0455 · IGCSE · Globalisation, free trade and protection
Globalisation, free trade and protection — practice question
The Tripartite Free Trade Area (TFTA) was created in 2015. It spans 26 countries and is Africa’s largest free trade area. When trade barriers are removed, economies can exploit economies of scale more fully. However, some economists think that improving Africa’s roads would be more effective and would do more to cut a current account deficit on the balance of payments and improve living standards.
(a)[2]
Define what is meant by economies of scale.
(b)[4]
Explain two benefits consumers may receive from free trade.
(c)[6]
Analyse how lower transport costs could raise a country’s exports and imports.
(d)[8]
Discuss whether or not raising living standards is the most important economic objective for developing countries.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “A reduction in average costs” …