Economics 0455 · IGCSE · International specialisation
International specialisation — practice question
Free trade has enabled the Mexican economy to specialise in low-cost manufacturing. Unemployment nationwide is fairly low, but about 50 million people were still judged to be in poverty in 2016. In addition, there are concerns that technological advances will soon substitute capital for labour.
(a)[2]
State the reward paid to labour and to capital.
(b)[4]
Explain what is meant by the two types of poverty.
(c)[6]
Analyse the ways in which firms can gain from specialisation.
(d)[8]
Discuss whether supply-side policy measures are capable of reducing unemployment.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Labour is rewarded by wages” …