Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
It allows countries to produce goods at a lower opportunity cost.
B
It eliminates the need for trade agreements.
C
It ensures that all countries produce the same goods.
D
It increases the level of tariffs on imported goods.
Understanding the Answer
Let's break down why this is correct
Answer
The main advantage of specialization in trade, based on the principle of comparative advantage, is that it allows countries to produce goods more efficiently. When a country focuses on what it can produce best, it can create more of that product at a lower cost than if it tried to make everything. For example, imagine Country A is really good at making coffee but not so good at making cars, while Country B is great at making cars but struggles with coffee. If Country A specializes in coffee and Country B specializes in cars, they can trade with each other, allowing both to enjoy more coffee and cars than if they each tried to make both products on their own. This way, specialization leads to increased overall production and benefits everyone involved in the trade.
Detailed Explanation
Specialization helps countries focus on what they do best. Other options are incorrect because Some might think specialization means no trade agreements are needed; It's a common mistake to think specialization means all countries make the same things.
Key Concepts
comparative advantage
Topic
Benefits of Specialization and Trade
Difficulty
easy level question
Cognitive Level
understand
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