Question

[3] Specialization:

A) increases dependence on markets and trade.

B) permits greater levels of production than would be attained without it.

C) both of the above.

D) none of the above.

3A You would expect an increase in international specialization among nations that:

A) restrict trade with one another.

B) face widening differences in the costs of different resources among those nations.

C) experience an increase in a mentality that each nation is best at producing everything it needs.

D) all of the above.

3B According to the principle of comparative advantage, the main reason two countries should each produce a single good and trade with the other country for the good they do not produce is:

A) differences in access to capital.

B) different technological endowments.

C) greater efficiency due to specialization.

D) differences in the skills of their labor forces.

3C A nation is said to have a comparative advantage when it has a:

A) larger demand for a product than does another nation.

B) larger inventory of a product to sell than does another nation.

C) lower opportunity cost of producing a product than does another nation.

D) monopoly over a product and, through that, complete control over its price.

Answer 1

1)Specialization:permits greater levels of production than would be attained without it

2)You would expect an increase in international specialization among nations that:face widening differences in the costs of different resources among those nations.

3)According to the principle of comparative advantage, the main reason two countries should each produce a single good and trade with the other country for the good they do not produce is:greater efficiency due to specialization.

4)A nation is said to have a comparative advantage when it has a  lower opportunity cost of producing a product than does another nation.