A-LevelEconomicsInternational economic issues9708/12 · May/June 2012 · Q201 Mark

The diagram shows the production possibility curves for two countries, X and Y. [Figure 20.1] A decrease in productivity moves country X's production possibility curve from X₁ to X₂. Which statement is correct?

This question uses a diagram from the original paper, which isn't shown here. Open the full paper from the past papers archive to see it.

AAfter the change X would export raw materials and import manufactured goods.

BAfter the change there is no economic basis for trade.

CBefore the change Y had an absolute advantage in the production of raw materials.

DBefore the change X had a comparative advantage in both products.

✓ Correct answer

A: After the change X would export raw materials and import manufactured goods.

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Topic: International economic issues, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source: A-Level Economics, May/June 2012 Paper 1 Variant 2, question 20.

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