Cambridge O Level Economics: International specialisation (2281) – Practice Questions

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs – examination boards hold copyright in their own papers. Use these alongside the official past papers from your board or school.

These questions cover section 6.1 (6.1.1 and 6.1.2, international specialisation) of the Cambridge O Level Economics (2281) syllabus for examination in 2026, version 2. There are no tiers. Every country, firm and figure is invented and illustrative. Revise first with the study guide and the revision notes. Other links: the Cambridge O Level Economics hub, the printable checklist and the free diagnostics. Write your own answer before reading the worked answer.

Questions

1. Define specialisation at a national level. [2]

2. Explain how superior resource allocation can be the basis for a country to specialise. [3]

3. In Country X, 80 days of work make 160 tonnes of wheat or 40 machines. In Country Y, 80 days make 60 tonnes of wheat or 60 machines.

(a) Work out how much wheat each country gives up for each machine it makes. [2] (b) State which country should specialise in machines. [1] (c) State which country should specialise in wheat. [1]

4. Countries M and N each have 100 days of work. M can make 50 units of cloth or 25 tools. N can make 30 units of cloth or 45 tools. Before specialisation M uses 60% of its days on cloth and the rest on tools. N uses 40% on cloth and the rest on tools.

(a) Calculate total output of cloth and of tools before specialisation. [2] (b) Calculate total output of each good if M makes only cloth and N makes only tools. [1] (c) State the gain in each good. [1] (d) Explain why the countries must trade for specialisation to benefit them. [2]

5. In Country T a worker is paid 40 per day and makes 8 units. In Country U a worker is paid 15 per day and makes 2 units.

(a) Calculate the labour cost per unit in each country. [2] (b) State which country has the cheaper production method on this measure. [1] (c) Country U buys machines that raise output to 4 units per worker per day. Calculate the new labour cost per unit. [1] (d) Explain one reason why low wages do not always mean low cost per unit. [1]

6. A shoe industry has fixed costs of 480,000 and variable costs of 12 per pair.

(a) Calculate average cost when it sells 12,000 pairs at home. [2] (b) Calculate average cost when exports raise sales to 60,000 pairs. [1] (c) Work out by what percentage average cost has fallen, giving the answer to one decimal place. [2]

7. Explain two advantages of national specialisation for consumers. [4]

8. Explain one disadvantage of specialisation for firms and one for the economy. [4]

9. Country Z (illustrative) exports 90 million a year, of which fuel is 72 million. Its GDP is 450 million. The world price of fuel falls by 35% and the volume sold is unchanged.

(a) Calculate fuel exports as a percentage of total exports. [1] (b) Calculate total exports as a percentage of GDP. [1] (c) Calculate the fall in earnings from fuel. [2] (d) Express the fall as a percentage of GDP. [1] (e) State one possible effect on the economy other than lower export earnings. [1]

10. In Country V (illustrative), closing textile mills cost 9,000 jobs. Export firms create 4,000 jobs, filled by mill workers. The labour force is 300,000.

(a) Calculate how many mill workers remain unemployed. [1] (b) Express this as a percentage of the labour force, to two decimal places. [2] (c) Explain why some mill workers may not find new work easily. [2]

11. The price of imported shoes in Country F falls from 25 to 20.

(a) Calculate the percentage change in price. [1] (b) A household spends 500 on shoes. Calculate the percentage increase in the number of pairs it can buy. [2] (c) Explain how this change could hurt a local shoemaker. [2]

12. Country G (illustrative) earns 80% of its export revenue from tinned fish. Output has grown, prices to consumers have fallen and the economy has expanded. The world price of fish is unstable and fish stocks in local waters are falling. Evaluate whether Country G has gained from specialising in tinned fish. [8]

Answers

1. A country puts most of its productive capacity into a limited range of products [1] and exchanges part of that output for goods it does not make [1]. [2] Examiner insight: A definition scores best when it contains both ideas, concentration and trade. “Being good at one thing” omits the part about the whole country.

2. Resources such as land, labour, capital and enterprise are not spread evenly between countries [1]. A country uses resources where they produce the most output, for example fertile land for farming [1]. Total output from the same resources rises, so it can trade the surplus for other goods [1]. [3] Examiner insight: Link the resource to a particular good and say why output rises. Naming a resource alone leaves out the reasoning.

3. (a) Country X: 160 / 40 = 4 tonnes of wheat [1]. Country Y: 60 / 60 = 1 tonne [1]. [2] (b) Country Y, the lower opportunity cost [1]. [1] (c) Country X [1]. [1] Examiner insight: Show which good is divided by which. In (c), the opportunity cost of wheat in X is 0.25 machines, below Y’s 1 machine, and the working supports your choice.

4. (a) Cloth: M 50 x 0.6 = 30, N 30 x 0.4 = 12, total 42 [1]. Tools: M 25 x 0.4 = 10, N 45 x 0.6 = 27, total 37 [1]. [2] (b) Cloth 50 and tools 45 [1]. [1] (c) Cloth +8 and tools +8 [1]. [1] (d) Each country makes only one good, so it needs the other country’s good to consume both [1]. Trade at a rate that suits both lets each end up with more than before [1]. [2] Examiner insight: Keep the two goods in separate rows or columns. The explanation in (d) needs the reason, which is that output of the other good has dropped to zero.

5. (a) T: 40 / 8 = 5 per unit [1]. U: 15 / 2 = 7.50 per unit [1]. [2] (b) Country T [1]. [1] (c) 15 / 4 = 3.75 [1]. [1] (d) A low-wage worker may make few units, because of poor machines or training, so the cost per unit stays high [1]. [1] Examiner insight: Cost per unit divides the wage by output, and a low wage can sit with a high unit cost. State that link in (d) rather than “wages are low”.

6. (a) (480,000 + 12 x 12,000) / 12,000 = 624,000 / 12,000 [1] = 52 [1]. [2] (b) (480,000 + 12 x 60,000) / 60,000 = 1,200,000 / 60,000 = 20 [1]. [1] (c) (52 - 20) / 52 x 100 [1] = 61.5% [1]. [2] Examiner insight: Use the original cost of 52 as the base for the percentage. Using 20 gives 160%, a figure that is too large for a fall.

7. Lower prices, because specialised producers make goods at lower cost per unit [1], so consumers can buy more with their income [1]. Wider choice, because the country can import goods it does not produce [1], so consumers can enjoy a greater variety of goods and services [1]. (Other valid advantages: better quality through competition.) [4] Examiner insight: Each advantage needs a reason after it. “Lower prices” alone earns the first mark at most.

8. Firms: those in industries that do not specialise face cheaper imports and may close [1], because they cannot match foreign prices or quality [1]. (Alternative: dependence on a few foreign customers.) Economy: over-dependence on a few exports means a fall in their world price lowers income and jobs [1] and may cut tax revenue [1]. [4] Examiner insight: Mark two separate points under two headings. A point fits one group, so check that your firm point is about firms and the economy point is about the whole economy.

9. (a) 72 / 90 x 100 = 80% [1]. [1] (b) 90 / 450 x 100 = 20% [1]. [1] (c) 72 x 0.35 [1] = 25.2 million [1]. [2] (d) 25.2 / 450 x 100 = 5.6% [1]. [1] (e) For example, lower tax revenue, job losses in the fuel industry or less money to pay for imports [1]. [1] Examiner insight: Apply the 35% to the fuel figure, not to total exports. Giving the units (million) with the final value shows what the number measures.

10. (a) 9,000 - 4,000 = 5,000 [1]. [1] (b) 5,000 / 300,000 x 100 [1] = 1.67% [1]. [2] (c) Their skills may not match the new jobs [1], so they may need retraining, and they may live far from the new firms [1]. [2] Examiner insight: Name the idea behind (c), structural unemployment, and the cause, which is a skills or location mismatch. A comment that “there are no jobs” does not explain why this group is affected.

11. (a) (20 - 25) / 25 x 100 = -20% [1]. [1] (b) Before: 500 / 25 = 20 pairs [1]. After: 500 / 20 = 25 pairs, an increase of 5 / 20 x 100 = 25% [1]. [2] (c) Buyers switch to the cheaper imported shoes [1], so the local firm sells fewer pairs and may make a loss or close [1]. [2] Examiner insight: A 20% fall in price raises purchasing power by 25%, and the two are different. In (c) follow the chain from lower import prices to the local firm’s sales.

12. Gains: lower prices for consumers [1] and economic expansion mean more income and jobs, and exports bring in foreign currency [1]. Costs: 80% of exports come from one product, so a fall in world price cuts earnings, jobs and tax revenue together [1], and falling fish stocks mean the resource may be used up, which would harm future output and jobs [1]. Further analysis: the effect of a price fall depends on how large fish is in total income, and the loss of fish would leave workers with skills that do not match other jobs, causing structural unemployment [1]. A balanced view: the gains so far are real [1], but the country is exposed, so it has not gained clearly in the long run unless it diversifies, protects stocks or retrains workers [1]. Judgement on whether gains outweigh costs, based on how stable prices are, how well stocks are managed and how fast new industries grow [1]. [8] Examiner insight: A strong evaluation ends with a judgement that follows from the evidence in the case. Repeating the case study without weighing the gains against the risks usually stays at description.

Where marks are usually lost

• Defining specialisation without mentioning trade.
• Naming a benefit without a reason after it.
• Putting a benefit under the wrong group, such as lower prices under firms.
• Taking the opportunity cost the wrong way up.
• Using the new cost as the base for a percentage fall.
• Assuming low wages always mean low unit cost.
• Describing a disadvantage in general terms with no effect on income, jobs or prices.
• Giving only advantages when the question asks about both sides.
• Ending an evaluation without a judgement or a “depends on” point.

Next steps

• Return to the revision notes and the study guide.
• Check your coverage on the printable checklist and the Cambridge O Level Economics hub.
• Try a free 10-minute diagnostic to find weak spots.
• Book a free trial class.

Official syllabus

Cambridge O Level Economics (2281) syllabus for examination in 2026, version 2, published by Cambridge University Press & Assessment: section 6.1 International specialisation.