Economics 2281 · O Level · Globalisation, free trade and protection
Globalisation, free trade and protection — practice question
The Tripartite Free Trade Area (TFTA) was created in 2015. It brings together 26 countries and is the largest free trade area in Africa. When trade barriers are removed, economies can benefit more from economies of scale. Some economists, however, believe that upgrading Africa’s roads would yield greater gains and would reduce a current account deficit on the balance of payments more effectively, while also improving living standards.
(a)[2]
Define the term economies of scale.
(b)[4]
Explain two advantages consumers might receive from free trade.
(c)[6]
Analyse how lower transport costs could raise a country's exports and imports.
(d)[8]
Discuss whether improving 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” …