Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Country A produces only wheat while Country B produces only cars, and they trade wheat for cars.
B
Country A produces wheat and cars, while Country B produces cars and computers, and they trade cars for wheat and computers.
C
Country A produces wheat and shares it equally with Country B, which produces nothing.
D
Country A produces wheat and imports everything else, while Country B produces a variety of goods without trading.
Understanding the Answer
Let's break down why this is correct
Answer
Specialization and trade happen when each person or country focuses on producing what they do best and then exchanges goods with others. For example, a farmer who grows wheat efficiently can trade wheat for a carpenter’s chairs, while the carpenter focuses on making chairs. This exchange lets both parties obtain more goods than if they tried to produce everything themselves. The scenario where a farmer sells wheat to a carpenter in return for chairs best illustrates this idea, because each trades a product they specialize in for something they need. The result is higher overall satisfaction for both parties.
Detailed Explanation
In this scenario, each country chooses to make the product they can produce most efficiently. Other options are incorrect because Both countries try to make many things, so they do not pick a single strong area; This choice has no trade, so there is no exchange of goods.
Key Concepts
Specialization
Comparative Advantage
Trade
Topic
Specialization and Trade
Difficulty
easy level question
Cognitive Level
understand
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