Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
By ensuring all countries produce the same goods
B
By allowing countries to specialize in goods they produce most efficiently
C
By increasing tariffs on imported goods
D
By decreasing competition among domestic producers
Understanding the Answer
Let's break down why this is correct
Answer
Comparative advantage is the idea that countries can produce certain goods more efficiently than others, which leads to economic efficiency when they trade. When countries specialize in what they are best at, they can produce more of that good at a lower cost. For example, if Country A is great at making cars and Country B is excellent at growing coffee, it makes sense for Country A to focus on cars while Country B focuses on coffee. By trading cars for coffee, both countries can enjoy more of both products than they could if each tried to make everything on their own. This specialization and trade not only increase overall production but also provide consumers with a greater variety of goods at lower prices, benefiting everyone involved.
Detailed Explanation
When countries focus on making what they are best at, they can produce more efficiently. Other options are incorrect because Some might think that if all countries make the same things, it would be fair; Increasing tariffs means raising taxes on imports, which can make goods more expensive.
Key Concepts
comparative advantage
economic efficiency
consumer benefits
Topic
Benefits of Specialization and Trade
Difficulty
hard level question
Cognitive Level
understand
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