Some cities focus on generating new ideas and new products, which

Question

Some cities focus on generating new ideas and new products, which requires a diversified economic base; others on large-scale standardized production, which is better carried out in a more specialized economic environment. Thus, both large, diversified, cities and smaller, specialized, cities are needed. The main issue with specialized cities, however, is that, despite the advantages of specialization (less urban crowding and stronger localization economies, i.e., economies based on the proximity of closely related producers within a particular sector), such cities are exposed to greater risk due to the rise and fall of specific sectors and technologies.

But limiting specialization to reduce risk may mean foregoing important immediate benefits to avoid possible future losses. Insurance by the central government may be a good alternative. However, this is costly, and complete insurance may lead to complacency. Another alternative is to give local governments the power to restructure local economies. This may lead, however, to the involvement of local government in excessively ambitious economic-development policies; not every community can create the next Silicon Valley. Moreover, the link between innovation and diversity seems fairly robust, so highly innovative clusters cannot be bred in highly specialized economic environments. An alternative solution is to encourage labor mobility -but in Europe, for example, this awakens fears about lost regional identities.

1. According to the passage, one possible disadvantage of limiting specialization is that

A. any policy involves some risk, and the level of risk to be expected from limiting specialization is not always clear
B. insurance is available to cover any potential losses resulting from specialization
C. some unexpected and valuable innovations can result from specialization
D. future losses resulting from limiting specialization may outweigh present benefits
E. limiting specialization may involve sacrificing potential short-term benefits

2. With regard to risk, which of the following scenarios is most analogous to the situation of specialized cities, as that situation is portrayed in the passage?

A. Small publishing companies are at risk of being submerged by larger publishing companies.
B. One's personal fortune is at greater risk when one invests it in a single stock than when one invests it in several different stocks.
C. Manufacturing and finding a market for an innovative product usually involves a greater risk than for a traditional product.
D. Athletes who compete as part of a team are at greater risk of not achieving distinction than are athletes who compete as individuals.
E. The farther away from the center one lives in a city, the more one is at risk of losing touch with changes in the city.

3. The passage most strongly implies that a policy of encouraging labor mobility could

A. help promote economic diversity in cities but might be impeded by cultural attitudes
B. increase the levels of certain types of risk without bringing substantial economic benefits
C. increase workforce skill levels in cities and counter fears about loss of regional identities
D. increase innovation while preserving regional identities and keeping cities highly specialized economically
E. reduce regional economic diversity in Europe to a greater extent than elsewhere

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Show Answer Question #1

Official Answer

E

Show Answer Question #2

Official Answer

B

Show Answer Question #3

Official Answer

A

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Blackcrow1972 · Answer

Q3) The passage suggests that encouraging labor mobility could help mitigate the risks faced by specialized cities, likely by promoting a more diverse economy as workers bring different skills and experiences. However, it also notes that in Europe, this policy may face resistance due to concerns over the loss of regional identities, which is a cultural attitude. This aligns with choice A.

Blackcrow1972 · Answer

Q2) The passage describes specialized cities as being at greater risk due to their dependence on a single sector or technology, similar to how investing in only one stock is riskier than diversifying across several stocks. This analogy aligns with B, as both scenarios involve the concept of "putting all eggs in one basket," increasing vulnerability to changes in a single area.

The other options do not capture the specific nature of risk associated with lack of diversification:

A describes competition from larger companies, not the risk associated with over-specialization.
C refers to risk in innovation, not specialization.
D is about individual versus team performance, which doesn’t relate to economic specialization.
E involves geographic distance and staying informed, which does not parallel the economic risk of specialization.

Azakura16 · Answer

Paragraph one introduces two types of cities based on different economic environments. It then explains that both types are important, but smaller, specialized cities have some vulnerabilities that come with working in a less diversified economic environment.
Paragraph two warns against limiting specialization, as the immediate benefits could outweigh potential future losses. It mentions the alternative of government insurance, but brings up some concerns with that solution. It also mentions the alternative of giving local governments the power to restructure their local economies, and then brings up some potential issues with that suggestion. It brings up the link between innovation and diversity, and offers a solution that could encourage that, but mentions a potential complaint if it were to be attempted in some areas.

Q1: According to the passage, one possible disadvantage of limiting specialization is that 
P2, S1:  But limiting specialization to reduce risk may mean foregoing important immediate benefits to avoid possible future losses 
Best answer is E: limiting specialization may involve sacrificing potential short-term benefits

Q2: With regard to risk, which of the following scenarios is most analogous to the situation of specialized cities, as that situation is portrayed in the passage?  
P1, S3:  The main issue with specialized cities, however, is that...such cities are exposed to greater risk due to the rise and fall of specific sectors and technologies. 
Best answer is B: One's personal fortune is at greater risk when one invests it in a single stock than when one invests it in several different stocks.

Q3: The passage most strongly implies that a policy of encouraging labor mobility could 
P2, S7:  An alternative solution is to encourage labor mobility -but in Europe, for example, this awakens fears about lost regional identities. 
Best answer is A: help promote economic diversity in cities but might be impeded by cultural attitudes

VerbalBot · Answer

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Some cities focus on generating new ideas and new products, which

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Some cities focus on generating new ideas and new products, which

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