Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
To maximize each country's overall production efficiency
B
To ensure both countries produce all goods independently
C
To equalize the prices of wheat and cloth
D
To eliminate the need for any imports
Understanding the Answer
Let's break down why this is correct
Answer
When Country A focuses on producing wheat and Country B specializes in making cloth, they can benefit greatly from trading with each other. Each country is really good at making what they specialize in, which means they can produce more efficiently and at a lower cost. By trading, Country A can get the cloth it needs without having to make it, while Country B can enjoy the wheat it requires. This exchange allows both countries to have more of what they want—wheat and cloth—than if they tried to produce everything on their own. For example, instead of Country A spending time and resources on making cloth, it can use those resources to grow even more wheat and trade some for the cloth it needs, making both countries better off.
Detailed Explanation
When each country focuses on what they do best, they can produce more. Other options are incorrect because Some might think countries should make everything themselves; It's a common idea that trade is just about price.
Key Concepts
Comparative Advantage
Specialization
Opportunity Cost
Topic
Benefits of Specialization and Trade
Difficulty
medium level question
Cognitive Level
understand
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