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
156 exam-style questions on AQA A Level Economics 1.4 Production, costs and revenue, covering 1.4.1 Production and productivity, 1.4.2 Specialisation, division of labour and exchange, 1.4.3 The law of diminishing returns and returns to scale (A-level only), 1.4.4 Costs of production, 1.4.5 Economies and diseconomies of scale, 1.4.6 Marginal, average and total revenue, 1.4.7 Profit, and 1.4.8 Technological change (A-level only). Each one has a worked solution and a mark scheme showing where the marks go.