Practise evaluating absolute and comparative advantage when transport costs, trade barriers, factor immobility, changing costs, strategic aims and distribution alter predicted…
Assess the extent to which the principle of comparative advantage should be the main factor to consider when countries decide whether to trade with each other.
OR
to trade with each other.
Use Table A: AO1 Knowledge and understanding and AO2 Analysis and Table B: AO3 Evaluation to mark candidate responses to this question.
AO1 and AO2 out of 8 marks. AO3 out of 4 marks.
Indicative content
Responses may include:
AO1 Knowledge and understanding and AO2 Analysis
- Knowledge and understanding of the principle of comparative advantage.
- An explanation of the main benefits, e.g., an efficient allocation of resources, an increase in world output and employment, lower world prices and better and a wider choice of products all derive from specialisation due to comparative advantage.
- An explanation of the limitations of the theory, e.g., the danger of over specialisation, high transport costs offsetting the benefits, possible increase in unemployment, maybe strategic problems.
Level 1 responses will be assertive and lacking in explanations/mainly descriptive and/or or mainly lacking in relevance to the question.
Level 2 responses may contain some inaccuracies and may be one sided. Analysis will be explained at least in part and will be largely relevant to the question.
Level 3 responses will consider alternative policies/concepts, etc. and will be balanced. Explanations of points raised will be offered and will be accurate and relevant to the question.
AO3 Evaluation
Of the extent to which comparative advantage should be the main determinant for international trade between countries, considering the importance of other factors, e.g. strategic, that arrives at a reasoned and justified conclusion. A one-sided response cannot gain any marks for evaluation.
Accept all valid responses.
AO1 Knowledge and understanding and AO2 Analysis
AO3 Evaluation
OR