Question

Why is specialization so valuable in international trade today?

A) Most countries only make one product very well.
B) Specialization limits the amount of agriculture a country allows.
C) Specialization keeps the prices low on goods that are imported into a country.
D) Specialization allows people to do a more efficient job at producing what they make best and trade for the things they need.

Answer 1

Specialization leverages comparative advantage, allowing countries to focus on producing goods they're most efficient at and trade for others, thus boosting productivity and economic efficiency.

Step-by-step explanation:

Specialization is so valuable in international trade today because it allows each country to produce what they are best at and then trade for what they need. This concept, known as comparative advantage, demonstrates that economic efficiency and productivity are increased when countries concentrate on the goods and services they can produce most effectively and trade for the rest needed.

For instance, the climate in the United States is conducive to grain production, whereas Brazil's climate is ideal for coffee production. Hence, both countries benefit from trading these respective products instead of trying to produce them domestically, where they may have less of an advantage.