HISTORY
HISTORY OF THE MIDDLE EAST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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directly swapping goods from one country to another without having to use money
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trying to avoid investing in industry and technology because of the expense involved
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producing all goods and services needed for a country’s growth, so that trade with other countries is not needed
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producing those goods a country can make most efficiently so they can trade them for goods made by others that cannot be produced locally
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Detailed explanation-1: -Specialisation in economics is when a country focuses on the production of a narrow range of goods or services to increase its efficiency. Specialisation relates not only to countries but also to individuals and firms. However, in economics, it refers to countries as the main players.
Detailed explanation-2: -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. Countries produce a surplus of the product in which they specialize and trade it for a different surplus good of another country.
Detailed explanation-3: -The idea of absolute advantage was developed by Scottish economist Adam Smith, who explained how countries can profit by only specializing in the goods and services they can produce efficiently.
Detailed explanation-4: -Comparative advantage drives countries to specialize in the production of the goods for which they have the lowest opportunity cost, which leads to increased productivity.
Detailed explanation-5: -Comparative advantage is an economy’s ability to produce a particular good or service at a lower opportunity cost than its trading partners. The theory of comparative advantage introduces opportunity cost as a factor for analysis in choosing between different options for production.