When Might a Country Specialize in Producing a Particular Good

Economist Adam Smith advocated the theory of absolute advantage where he argued that a country should choose to produce a good if it can produce more of the good with the same or fewer resources than another country. The country with the lower opportunity cost for a good should specialize in that good.

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They benefit from economies of scale which means that the average cost of producing the good falls to a certain point because more goods are being produced.

. Countries specialize in producing certain goods for many reasons but the most common is. The concept of opportunity cost arises because of the scarcity of resources. When might a country specialize in producing a particular good.

Why do countries specialize in prducing certain goods. Germany has very strong very. Specialization is a method of production whereby an entity focuses on the production of a limited scope of goods to gain a greater degree of efficiency.

In a country-by-country basis the nation ranked 1 in 13 other countries and respondents lauded the quality and high security standards of German production. Similarly countries can benefit from increased. B all producers win.

- This point is especially relevant in poor countries that might have a comparative advantage in the production of some agricultural good. Japan may be better served to devote the limited resources and manpower. Countries specialize in the production of goods for which they have a comparative advantage true.

The resources of a country is limited View the full answer. Countries generally specialize in producing particular goods. So if each country specializes in the good for which it has a comparative advantage then the global production of both goods increases for England can spend 220 labor hours to produce 22 units of cloth while Portugal can spend 170 hours to produce 2125 units of wine.

Country B can produce c number of units of good 1 or it can produce d number of units of good 2. - If a country specializes very heavily in some good and world tastes change or the price falls dramatically this could be very painful. Because of this comparative advantage countries benefit when they specialize and trade with each other The following graphs show the production possibilities curves PPCS for Maldonia and Lamponia.

ExplanationBy specializing in the goods that the country produces most efficiently more of those goods are produced and thus the country can trade for more of other goods than it would have been able to produce on its own. The correct answer is that countries specialize in producing goods with which they have a comparative advantage rather than an absolute advantage because they can produce more of certain products and services in a more efficient way. When it has high opportunity costs for producing that good O B.

A country specializes in the production of goods for which it has a comparative advantage so. When its costs of transportation are particularly low C D. What is one result of such specialization.

Thus by producing a single good or those goods that the country produces best it can consume more of all goods. Then the country will specialize in the production of this good and trade it for other goods. Countries can also trade with other nations for products and services they cant provide on their own and countries produce.

Countries sometimes want to limit trade for insurance purposes. A country should specialize in producing a good or service for which it has a lower opportunity cost. It can be mutually beneficial for two nations to specialize in goods for which they have a comparative advantage and then trade with one another true.

This theory is different from comparative advantage. It has an absolute advantage. A nation will not have a comparative.

Many countries for example specialize in. A Countries become less interdependent B Production and consumption gradually decreases C Countries depend on trade to obtain other goods D Prices increase as goods become more rare. Absolute advantage is the source of potential gains from specialization and trade false.

It can produce a larger quantity than any other country. David Ricardo another economist suggested that a country only needs to have a. Which good should each country specialize in.

If countries specialize in what they are best at producing the output should be higher and hence their. A some producers and consumers win some lose but overall the gains exceed the losses. When it has a well-developed productive infrastructure.

What countries are good at producing is influenced by the quantity and quality of their resources. Specialization and trade A country may specialize in the production ofa good that it can produce at a lower opportunity cost than its trading partners. Absolute advantage refers to the uncontested superiority of a country or business to produce a particular good better.

When it has an absolute advantage in production of that good O C. Countries specialize in areas that they are naturally good at and also benefit from increasing returns to scale for the production of these goods. It has a comparative advantage.

For instance a country with a good climate good beaches and a good supply of labour may decide to concentrate on tourism. It has the highest opportunity cost. When a country has a comparative advantage in the production of a good it means that it can produce this good at a lower opportunity cost than its trading partner.

C all consumers win. The answer using a formula involves figuring the opportunity cost of each good for each country. A country should specialize in producing the goods for which a.

Asked Jul 6 2016 in Economics by Kabecilla.

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