Asked by Allie Luker on Apr 29, 2024
Verified
The law of increasing opportunity costs limits international specialization.
International Specialization
The economic strategy where countries focus on producing goods and services they are most efficient at in order to trade for goods they are less efficient at producing.
- Understand the impact of opportunity costs on determining the patterns of specialization and trade.
Verified Answer
ZK
Zybrea KnightMay 05, 2024
Final Answer :
True
Explanation :
The law of increasing opportunity costs states that as production of one good increases, the opportunity cost of producing an additional unit (in terms of other goods that must be foregone) will increase. This means that it becomes less efficient to continue producing more of a particular good, and instead it may be more efficient to switch to producing a different good. This can limit international specialization, as countries may face increasing opportunity costs in producing certain goods and can therefore benefit more from diversifying their production.
Learning Objectives
- Understand the impact of opportunity costs on determining the patterns of specialization and trade.
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