Learning Path
Question & Answer
Choose the Best Answer
Country A has a higher production cost for other goods.
Country A has a comparative advantage in wheat production.
Country A has fewer natural resources than Country B.
Country A wants to increase its trade deficit.
Understanding the Answer
Let's break down why this is correct
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 and Trade
medium level question
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Deep Dive: Specialization and Trade
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Definition
Specialization and trade refer to countries focusing on producing goods they have a comparative advantage in and trading with other countries. This concept allows nations to benefit from producing efficiently and trading for goods they cannot efficiently produce, leading to overall economic growth and welfare improvements.
Topic Definition
Specialization and trade refer to countries focusing on producing goods they have a comparative advantage in and trading with other countries. This concept allows nations to benefit from producing efficiently and trading for goods they cannot efficiently produce, leading to overall economic growth and welfare improvements.
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