Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
By producing all goods at the same level of efficiency
B
By trading its specialized goods for those produced at a higher opportunity cost
C
By reducing the overall production of all goods
D
By prioritizing self-sufficiency over trade
Understanding the Answer
Let's break down why this is correct
Answer
A country benefits from specializing in goods where it has a comparative advantage because it can produce those goods more efficiently than others. This means that the country can make more of a product using the same resources or make the product at a lower cost. For example, if Country A is great at growing coffee but not very good at making cars, it should focus on coffee production and trade some of that coffee for cars from Country B, which is better at making cars. By doing this, both countries can enjoy more goods than if they tried to produce everything themselves. This specialization leads to increased overall production and can improve the economy by creating jobs and boosting trade.
Detailed Explanation
When a country focuses on making goods it can produce best, it can trade these for other goods. Other options are incorrect because Some might think that making everything equally well is best; It's a common mistake to think that producing less of everything helps.
Key Concepts
Comparative Advantage
Opportunity Cost
International Trade
Topic
Comparative Advantage Analysis
Difficulty
medium level question
Cognitive Level
understand
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