Question

Nations usually __________ industries and activities in which they have a comparative advantage over other nations.

A.
negotiate treaties for
B.
specialize in
C.
avoid
D.
give the government control over

Please select the best answer from the choices provided.

A
B
C
D

Answer 1

B. specialize in

Step-by-step explanation:

• As regards with the David Ricardo principles of the comparative advantage the two commodities and the two countries tend to produce the different commodities.

• Then tends to specialize in that commodities by the division of the labor and thus tends to have a diverse range of product that benefits both the nations in terms of equal trade.

• Thus the governments of these nations give the incentives for the performance in the same or to specialize in a single set of commodity and hence creating an equal opportunity for both the countries. So as to have a high return value.

Answer 2

B. specialize in

Step-by-step explanation:

When it comes to production, trade, and making profit of them, the nations have the tendency to specialize in particular industries and activities in which they have a comparative advantage. The reason for this is that they can have less competition on the market, so they will have no problem in selling their products or services, thus they will have certain profit coming in.

With the globalization, the economies around the world have become very connected, and the world became like one major economy where everyone can trade with everyone. The nations started to only focus on production of few goods in which they are the best, knowing that the other goods they need can be obtained by trade with the other nations that have specialized in them.

As examples we can take Ghana with its cocoa bean plantations, Saudi Arabia with the petroleum, Mexico with the corn, Argentina with the beef production etc.