Question

Division of labor in some cases is used to explain why countries gain when specializing in producing fewer goods and services.

a. True
b. False

Answer 1

False. Anything that leads to different levels of productivity between two economies can be a source of comparative advantage. Specialization allows workers to focus on the parts of the production process where they have an advantage.

Step-by-step explanation:

False. Anything that leads to different levels of productivity between two economies can be a source of comparative advantage. For example, the education of workers, the knowledge base of engineers and scientists in a country, the part of a split-up value chain where they have their specialized learning, economies of scale, and other factors can all determine comparative advantage.

First, specialization in a particular small job allows workers to focus on the parts of the production process where they have an advantage. People have different skills, talents, and interests, so they will be better at some jobs than at others. Whatever the reason, if people specialize in the production of what they do best, they will be more effective than if they produce a combination of things, some of which they are good at and some of which they are not.