Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Specialization allows individuals to produce goods at a lower opportunity cost, enhancing trade benefits.
B
Opportunity cost is irrelevant in the context of specialization and trade.
C
Specialization increases the opportunity cost of goods, discouraging trade.
D
Trade eliminates the concept of opportunity cost completely.
Understanding the Answer
Let's break down why this is correct
Answer
Opportunity cost is the idea that when we choose one option, we give up the chance to do something else. In a market economy, specialization allows people or businesses to focus on what they do best, which can lead to greater efficiency and better products. For example, if a farmer specializes in growing corn, they can produce more corn than if they tried to grow many different crops. When this farmer trades their corn for other goods, like clothes or electronics, both they and the other party benefit because they each get what they need while giving up less valuable alternatives. This way, opportunity cost shows how making smart choices in specialization and trade can lead to better overall outcomes for everyone involved.
Detailed Explanation
When people focus on what they do best, they can make things more efficiently. Other options are incorrect because Some might think opportunity cost doesn't matter when trading; This option suggests that focusing on one thing makes it harder to trade.
Key Concepts
opportunity cost
market exchange
Topic
Benefits of Specialization and Trade
Difficulty
medium level question
Cognitive Level
understand
Ready to Master More Topics?
Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.