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Consider two countries that trade with each other. The degree of specialization according to their respective comparative advantages will be greater if the countries face:

A. Increasing costs.
B. Constant opportunity costs.
C. Decreasing costs.
D. Perfect competition.

User Gerron
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Final answer:

The degree of specialization according to comparative advantages will be greater if the countries face constant opportunity costs.

Step-by-step explanation:

Comparative advantage refers to the ability of a country to produce a good or service at a lower opportunity cost compared to another country. It is determined by the concept of opportunity cost, which is the value of the next best alternative that must be sacrificed to produce a certain good or service. When countries have constant opportunity costs, it means that the trade-off between producing different goods remains the same as production levels change. This leads to greater specialization and increased trade between the countries, resulting in greater overall gains from trade.

For example, let's consider two countries: Country A and Country B. If Country A has constant opportunity costs, it means that the trade-off between producing different goods remains constant. This allows Country A to specialize in producing the good for which it has a comparative advantage, leading to greater efficiency and productivity. Country B can then specialize in the good for which it has a comparative advantage, and both countries can trade with each other to benefit from the goods they don't produce efficiently.

Therefore, the degree of specialization according to comparative advantages will be greater if the countries face constant opportunity costs.

User Hiveer
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