Question 22M.1.HL.TZ0.3a
| Date | May 2022 | Marks available | [Maximum mark: 10] | Reference code | 22M.1.HL.TZ0.3a |
| Level | HL | Paper | 1 | Time zone | TZ0 |
| Command term | Explain | Question number | a | Adapted from | N/A |
Countries often specialize and trade according to the theory of comparative advantage. Explain the limitations of this approach.
[10]
Marks should be allocated according to the paper 1 markbands for May 2022 forward, part A.
Answers may include:
- Terminology: comparative advantage
- Explanation: of any limitations, such as it may lead to excessive specialization, specialization according to comparative advantage may not allow necessary structural changes to occur in an economy, viewed as the “rich man’s theory” by poorer nations as it mostly benefits the MDCs/MNCs, unrealistic assumptions, e.g. immobile and fixed factors of production, fixed technology, free trade, an absence of transport costs
- Diagram: PPC diagram to illustrate comparative advantage.
Candidates appeared to find question 3 a challenge judging by the relatively few candidates who chose to respond to it.
It was interesting to note, however, that whilst this question was unpopular, nevertheless some of the best responses seen were to this question. A significant number of candidates produced focused and precise answers, detailing the limitations of the theory of comparative advantage.
However, it was not uncommon for candidates to treat part (a) as a discussion of the merits of free trade. Alternatively, absolute advantage was explained, with no consideration of the concept of comparative advantage as asked by the question. Such candidates therefore struggled to provide the limitations of the theory of comparative advantage as asked.
