World output will be maximized if each country

Question

Quizplus · Accepted Answer

Specializing in producing goods in which a country has a comparative advantage allows for maximum efficiency in production and trade. This leads to better allocation of resources and higher output for all countries involved in the global market. Attempting to be self-sufficient or reducing consumption possibilities can lead to inefficiencies and higher costs. Specializing in producing goods with the lowest demand would not make economic sense as it would result in low profitability. Specializing in producing goods in which a country has an absolute advantage may not necessarily lead to global output maximization, as it does not consider comparative advantage among other countries in the market.

World Output Will Be Maximized If Each Country