Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Country X will import electronics from Country Y, leading to increased production costs in both countries.
B
Country X will export electronics to Country Y, and in return, import agricultural products, resulting in overall economic growth.
C
Country Y will not benefit from trade as it would prefer to produce everything domestically.
D
Both countries will experience a decrease in total production due to trade restrictions.
Understanding the Answer
Let's break down why this is correct
Answer
Country X will focus on making electronics while Country Y will concentrate on growing crops. By each country producing the good they can make most efficiently, they produce more of each good than if they tried to make everything. After trade, X can exchange some of its electronics for Y’s crops, and Y can trade crops for electronics, giving each country a larger quantity of both goods. This results in higher overall consumption and a more efficient use of resources for both countries. The key idea is that specialization and trade let each country enjoy a greater variety and quantity of products than it could produce alone.
Detailed Explanation
Country X uses its skill in electronics to make more of it, and Country Y uses its skill in farming to make more food. Other options are incorrect because This answer assumes Country Y makes electronics, but it is actually good at farming; The idea that a country can be happy making everything by itself ignores the fact that it could use other country’s cheaper goods.
Key Concepts
Comparative Advantage
Specialization
Trade
Topic
Specialization and Trade
Difficulty
hard level question
Cognitive Level
understand
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