ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Macroeconomic Specialization. Economies that realize specialization have a comparative advantage in the production of a good or service. Comparative advantage refers to the ability to produce a good or service at a lower marginal cost and opportunity cost than another good or service.

Detailed explanation-2: -Comparative advantage refers to a country’s ability to produce a specific good or service at a lower opportunity cost than its trading partners.

Detailed explanation-3: -Countries specialize in producing certain goods to gain a comparative advantage. Economies that promote their comparative advantages in producing a particular good are able to maximize the benefits of international trade.

Detailed explanation-4: -Countries have a comparative advantage in production when they can produce a good or service at a lower opportunity cost than other producers. Countries are better off if they specialize in producing the goods for which they have a comparative advantage.