ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The concept of absolute advantage was developed by 18th-century economist Adam Smith in his book The Wealth of Nations to show how countries can gain from trade by specializing in producing and exporting the goods that they can produce more efficiently than other countries.

Detailed explanation-2: -Specialization in economics is the process of an organization concentrating its labor and resources on a certain type of production to be more efficient and create a comparative advantage for an economy.

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: -Specialization refers to the tendency of countries to specialize in certain products which they trade for other goods, rather than producing all consumption goods on their own.

Detailed explanation-5: -Specialization-A method of production in which each agent (firm) concentrates on a limited number of activities. Specialization and exchange. Exchange-The act of trading with others to obtain what we desire.