A country has a specialist marine navigation equipment industry. High productivity allows it to exchange exports for imported food. The government plans to develop battery production as a second export specialism without reducing navigation equipment output. Which evaluation is most accurate?
The country may retain productivity and exchange gains, while reducing its exposure to a fall in the world price of one export.
The country may gain battery exports, while reducing productivity because national specialisation is weaker when two products are produced.
The country may maintain navigation equipment output, while gaining less from exchange because it produces two export goods.
The country may receive income from two exports, while becoming more exposed because each industry could experience a price fall.
76 exam-style questions on OCR GCSE Economics 2.1 The role of markets, covering 2.1.1 What is a market, 2.1.2 Primary, secondary and tertiary sectors, 2.1.3 Factor and product markets, and 2.1.4 Specialisation and exchange. Each one has a worked solution and a mark scheme showing where the marks go.