📚 Learning Guide
Specialization and Trade
medium

If Country A specializes in the production of wheat and exports it, what is the most likely underlying reason for this specialization?

Master this concept with our detailed explanation and step-by-step learning approach

Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
Learn Explanation
4
Explore Topic

Choose the Best Answer

A

Country A has a higher production cost for other goods.

B

Country A has a comparative advantage in wheat production.

C

Country A has fewer natural resources than Country B.

D

Country A wants to increase its trade deficit.

Understanding the Answer

Let's break down why this is correct

Answer

Country A probably has a comparative advantage in wheat, meaning it can produce wheat more efficiently or at a lower opportunity cost than other goods. Because of this advantage, the country can grow wheat using less labor, capital, or land than it would need for other products, making wheat a cheaper and higher‑quality export. This efficiency lets the country sell wheat abroad while still meeting its domestic needs. For example, if Country A has fertile plains and a mild climate, it can grow wheat faster and cheaper than neighboring countries that rely on machinery and irrigation for the same crop. Thus, the specialization is driven by the desire to use resources where they are most productive and to earn profits from exporting surplus.

Detailed Explanation

Country A can grow wheat using fewer resources or less effort than it can produce other goods. Other options are incorrect because This idea mixes cost with efficiency; Having fewer natural resources does not decide what a country makes.

Key Concepts

Specialization
Comparative Advantage
Trade
Topic

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.