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Two-stimulus question

Where to build the factory

  • Units 2, 4 and 7
  • 7 points
  • About 25 minutes

Seven short parts (A–G) built around two sources (data, images and/or maps), drawing on ideas from at least two units. You read each source, compare or connect them, and explain them with course ideas, often across different scales. On the exam: Question 3 of 3 in the 1-hour-15-minute free-response section (Section II). The three questions together are 50% of your exam score, so each is worth about 16.7%; 7 points, one for each part A–G. College Board suggests about 25 minutes per question, including up to 5 minutes to plan. No calculator.

The question and its sources

A car-parts company headquartered in Country H, a high-income country, is deciding where to build a new factory to supply car assembly plants in Country H. Use the two sources below to answer all seven parts, (a) through (g). Write in complete sentences.

Source 1: Selected costs for a factory supplying car assembly plants in Country H, 2025

Factory locationAverage manufacturing wage (US$ per hour)Shipping time to Country H's assembly plants (days)Tariff on parts entering Country H (%)
Country H32.0010
Country I (borders H; has a free trade agreement with H)5.1030
Country J (overseas; no trade agreement with H)2.403212

Source: Hypothetical data

Source 2: Map of northern Country I (described in words)

An export-processing zone (EPZ) lies along Country I's border with Country H, next to two highway border crossings and a rail border crossing.

Labels show that most factories in the EPZ are owned by companies headquartered in Country H, Japan and Germany.

A deep-water container port lies on Country I's coast, 300 km south of the EPZ, connected to it by a new rail line.

A note states that the population of the cities inside the EPZ grew from 0.4 million in 1995 to 1.6 million in 2025.

Source: Hypothetical map, described in words

Suggested time: 25 minutes

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Part (a)

1 point

Using Source 1, compare the manufacturing wages in Countries I and J with the wage in Country H.

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Part (b)

1 point

Using Source 1, explain why the company might choose to build its factory in Country I rather than Country J, even though wages are higher in Country I.

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Part (c)

1 point

Explain how just-in-time delivery could influence the company's location decision.

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Part (d)

1 point

Using Source 2, explain how the location of the EPZ supports manufacturing for export.

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Part (e)

1 point

Using Source 2, explain how the EPZ is likely to have affected migration within Country I.

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Part (f)

1 point

Explain how a free trade agreement between Countries H and I could limit Country I's sovereignty.

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Part (g)

1 point

Using BOTH sources, explain the degree to which world-system theory or dependency theory explains Country I's role in the global economy.

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