A-LevelEconomicsInternational economic issues9708/12 · Feb/Mar 2019 · Q221 Mark

Countries M and N produce the world supply of machines and textiles. The table shows what each country produces when it divides its resources equally between the two products. What should happen according to the principle of comparative advantage?

ACountry M should produce both machines and textiles.

BCountry M should specialise in the production of machines, country N should specialise in production of textiles.

CCountry M should specialise in the production of textiles, country N should specialise in production of machines.

DCountry N should produce both machines and textiles.

✓ Correct answer

C: Country M should specialise in the production of textiles, country N should specialise in production of machines.

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Topic: International economic issues, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source: A-Level Economics, Feb/Mar 2019 Paper 1 Variant 2, question 22.

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