Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Country A produces both wheat and cloth but chooses to export only wheat.
B
Country A specializes in wheat production and trades it for cloth with Country B, which specializes in cloth production.
C
Country A decides to produce only cloth to meet its domestic needs without trading.
D
Country A imports both wheat and cloth from other countries without producing any.
Understanding the Answer
Let's break down why this is correct
Answer
Specialization and trade based on comparative advantage occur when individuals or countries focus on producing goods or services they can create most efficiently, then trade for what they need. For example, imagine a farmer who is great at growing apples and a baker who excels at making bread. The farmer can grow many apples quickly, while the baker can make a lot of bread in less time than it would take them to grow apples. Instead of each trying to do both, the farmer grows apples and trades some for bread with the baker. This way, both the farmer and baker get more apples and bread than if they tried to make both on their own, illustrating how specialization and trade can lead to greater efficiency and abundance for everyone involved.
Detailed Explanation
When Country A focuses on making wheat, it can produce more of it efficiently. Other options are incorrect because This option shows a country producing two things but not trading; Here, Country A makes only cloth for itself.
Key Concepts
Specialization
Comparative Advantage
Trade
Topic
Benefits of Specialization and Trade
Difficulty
easy level question
Cognitive Level
understand
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