Suggested Answers of BT2 Revision Package - ASKnLearn

Singapore does not specialise completely in areas where it has CA but will produce some of the same types of goods that it imports, for example, telecommunications equipment. 4. Singapore’s patterns of trade do not agree with the predictions of economic theory because of strategic goods. a. Goods such as weapons, for example, are produced in Singapore rather than imported from countries with CA in producing weapons, such as Israel and the US, because they are considered strategic in nature and are essential for national defence. 5. Singapore’s patterns of trade do not agree with the predictions of economic theory because of intra-­‐industry trade driven by demand for a variety of goods and services. a. Singapore also imports goods that it has CA in, for example, pharmaceuticals and personal computers from USA and Europe. Such intra-­‐industry trade occurs as consumers prefer a variety of goods given their differing taste and preferences.Eg, although Singapore produces heart stents with CA, some consumers prefer the branded stents made by the US and French pharmaceutical giants. L3(9-12m)L2(6-8m)L1(1-5m)For a well-developed answer that explains and illustrates how Singapore’strade with its trading partners may or may not conform to the theory ofcomparative advantage:• Makes clear references to the theory of CA, using the “opportunity costs” nomenclature judiciously. • Accounts for both exports and imports • Explains a range of reasons why Singapore’s pattern of trade may not conform to the predictions of CA. • Answer is clearly applied in the context of Singapore. • Only minor misconceptions are made. For an under-developed answer that explains and illustrates how Singapore’strade with its trading partners may or may not conform to the theory ofcomparative advantage.• Max 6 for a one-sided answer.For an undeveloped answer demonstrates some knowledge of comparativeadvantage.• Answer contains severe misconceptions. • Answer is not applied to the context of Singapore. • Max 2 marks if theory of CA not used.