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Which problem will a country that tries to create a self-sufficient economy most likely experience?

A. Decreased cost for physical and human capital nos.
B. Increased voluntary exchange between businesses
C. Increased opportunity costs for failing to specialize
D. Decreased division of labor among its workers

1 Answer

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Final answer:

A country trying to create a self-sufficient economy would likely incur increased opportunity costs due to the lack of specialization, miss out on economies of scale provided by international trade, and witness a decrease in the division of labor that could lead to lower productivity.

Step-by-step explanation:

A country that attempts to create a self-sufficient economy will most likely experience increased opportunity costs for failing to specialize. By not specializing, a country forgoes the economic benefits explained by the law of comparative advantage, which suggests that countries benefit economically by specializing in certain products or services and trading for others. Self-sufficiency can also hinder the possibility of achieving economies of scale which are more feasible when participating in international trade, as it allows even small economies to produce at greater volumes which can lower costs and promote competition. Furthermore, specialization leads to a division of labor, which enhances productivity and efficiency within the workforce. However, a country striving for self-sufficiency would face a decrease in division of labor among its workers, potentially reducing overall economic productivity.

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