Asked by Haktan Öztürkçü on Jun 22, 2024
Verified
Specialization and trade allow a country to
A) produce and consume on its production possibility frontier.
B) produce and consume inside its production possibility frontier.
C) produce and consume outside its production possibility frontier.
D) produce on its production possibility frontier and consume outside it.
Specialization
The process by which individuals, businesses, or countries focus on producing a narrow range of products or services to gain greater efficiencies.
Production Possibility Frontier
A curve depicting the maximum feasible combinations of two products that a society can produce with existing resources and technology.
Trade
The act of buying, selling, or exchanging goods and services between people, firms, or countries.
- Understand the gains of specialization and international trade for the participating countries.
- Implement the concept of comparative advantage for problem-solving within the context of international commerce.
Verified Answer
AO
Ashly OlsenJun 29, 2024
Final Answer :
D
Explanation :
Specialization and trade enable a country to focus on producing goods in which it has a comparative advantage and trade for other goods. This allows the country to consume at a point that is outside its production possibility frontier (PPF), which represents the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently utilized.
Learning Objectives
- Understand the gains of specialization and international trade for the participating countries.
- Implement the concept of comparative advantage for problem-solving within the context of international commerce.