Question

Why is specialization a good idea in trade?

A. It increases the maximum combinations of products an economy can import when all productive resources are fully employed.
B. It allows nations to import the products they produce best and export the products that other nations produce best.
C. It allows nations to export the products they produce best and import the products that other nations produce best.
D. It increases the opportunity cost of exports and lowers the opportunity cost of imports.

Answer 1

Specialization is a good idea in trade because it allows nations to import the products they produce best and export the products that other nations produce best.

Step-by-step explanation:

Specialization is a good idea in trade because it allows nations to import the products they produce best and export the products that other nations produce best. This concept is based on the principle of comparative advantage, which states that nations should focus on producing goods and services for which they have a lower opportunity cost compared to other nations. By specializing in certain products, nations can increase their efficiency and productivity, leading to economic gains and increased access to a wider variety of goods and services.