6.1 international specialization

Question 1

Specialization

Answer 1

focusing the production of certain goods to increase prodcution efficiency

Question 2

advantages of specialization

Answer 2

1. international investment as institutions provide money to increase the productivity of that one industry
2. increase in economic growth as it creates employment and a rise of exports causing more money flow in the country
3. economies of scale greater global market increases in demand

Question 3

when does international specialization occur

Answer 3

1. when countries have a rising supply of raw materials
2. when countries have a skilled labour force for one specific industry

Question 4

Advantages for consumers

Answer 4

higher incomes more money to spend and better-quality products

Question 5

advantages for firms

Answer 5

efficient production may lower production costs

Question 6

advantages for the economy

Answer 6

increase in GDP

Question 7

disadvantages for consumers

Answer 7

if a country overspecializes, the wealth of a country may be
dependent on one industry. A contraction of global demand for that industry can
cause great unemployment and decrease in Aggregate Demand.

Question 8

disadvantages for firms

Answer 8

Specialized firms may have demotivated workers due to repetitive work,
while small firms must compete against large, specialized multinationals.

Question 9

disadvantages for consumers

Answer 9

consumers may become overdependent on products from other
countries. If trade is disrupted then consumers may face shortages.