0.5mm diameter or do you mean 0.5mm² CSA (2.1mm diameter)? they are very different.

0,5mm diameter is the thickness of the multi-strand if I expose it, lightly twist it and measure it with a vernier.

Would I be correct to think that if I use a wire that is too thin, it risks burning out, and a wire too thick will have too much resistance for the lower voltage and therefore too much current drop over the distance ?

In our area, there is only a limited choice of supplies available, so finding an online calculator that tells me I need 1 strand 0.7mm wire or 12 strand 0.2mm wire is really not much help.

So as a re-phrase to the question, is there a good practice method to determine if some available wire is suitable. For example, apply 12V to a 1m or 5m length of wire and measure the voltage at the other end ? Of course, I am (again) assuming that a too thin wire will have too much voltage drop ? What would the effect be if the wire was too thick for the application ?