Economics 2281 · O Level · International specialisation
International specialisation — practice question
In 2016, a worldwide peanut shortage pushed up their price. China, which has long been a net exporter of peanuts, was close to becoming a net importer. South Africa, an exporter of premium, high-cost peanuts used in chocolate confectionery, suffered the worst drought on record. In that same year, a larger number of South African farmers applied for bank loans.
(a)[2]
How does a product’s price differ from its cost?
(b)[4]
Explain two factors that affect a country’s demand for food.
(c)[6]
Analyse the reasons why a country might move from being a net exporter of a product to becoming a net importer of that product.
(d)[8]
Discuss whether a central bank ought to restrict how much a commercial bank may lend to its customers.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme.