O Levels Economics (2281)•2281/12/M/J/20

Explanation
Specialization Increases Import Dependence
Steps:
- Define specialization: A country focuses production on goods it produces most efficiently.
- Link to trade: Specialization encourages exporting specialized goods and importing others.
- Identify disadvantage: This creates reliance on foreign suppliers for non-specialized needs.
- Evaluate options: Check which describes a drawback, not a benefit.
Why A is correct:
- According to comparative advantage theory, specialization boosts efficiency but requires imports for diverse needs, heightening vulnerability to supply disruptions.
Why the others are wrong:
- B: Specialization expands trade opportunities, not reduces them.
- C: It increases variety through imports, benefiting consumers.
- D: It lowers costs via efficiency gains in specialized production.
Final answer: A
Topic: International specialisation
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