Markets and Specialisation

A tailor has four customers for her range of suits. The table shows the yearly demand for the suits she makes. Which price should be charged to maximise the tailor's yearly revenue?

• $800

• $900

• $1000

• $1100

Saudi Arabia specialises in oil extraction and refining. This is a capital-intensive industry with highly skilled labour. What might be a disadvantage of this specialisation?

• Oil companies have increased training costs as each worker needs many different skills.

• Oil companies may find it difficult to achieve economies of scale.

• Resource allocation is not efficient because a narrow range of goods is being produced.

• Workers may face a restricted range of job opportunities.

What would be a disadvantage of specialisation for a worker?

• a low price of the product that they make

• boredom due to repetition of the same task

• higher quality of the good

• the opportunity to undertake training

Unlike the UK and US, a significant proportion of the shares on the stock exchanges of China and Russia are of state-owned enterprises. Which judgement about China and Russia can be made from this information?

• their distribution of income and wealth

• their level of development

• their stages of production

• their type of economic system

Why does specialisation increase the productivity of employees?

• Average cost of production increases.

• Staff turnover is high.

• Time is saved by not moving between tasks.

• Workers lose interest in their job.