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1.4 Production, costs and revenue

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Question 17

A remote island economy has a highly developed division of labour where households specialise in distinct tasks, such as boat-building, net-weaving, or deep-sea fishing, and trade their outputs.

Which of the following changes is most likely to undermine this division of labour, forcing households to become more self-sufficient?

The construction of a deep-water harbor that allows large merchant ships from neighbouring islands to dock

The introduction of a state-funded vocational institute teaching advanced maritime engineering and fabrication

A decline in trust in the local fiat currency, leading islanders to reject it in favour of direct commodity-for-commodity trade

The deregulation of the island's domestic transport sector, lowering the cost of moving goods across the island

1.4 Production, costs and revenue Questions

  1. A Level
  2. /Economics
  3. /1.4 Production, costs and revenue