World output of goods and services increases with specialization because

Question

Quizplus · Accepted Answer

Specialization allows countries to focus on producing goods and services that they have a comparative advantage in, which means that they can produce these goods and services with fewer resources or at a lower opportunity cost than other countries. This leads to more efficient use of resources and an increase in the overall output of goods and services in the world. Therefore, choice A is the best answer. Choice B is incorrect, as specialization does not necessarily shift the production possibilities curve rightward, but rather allows countries to operate more efficiently along their existing curve. Choice C is also incorrect, as willingness to work harder does not necessarily lead to an increase in output unless paired with specialization and efficient use of resources.

World Output of Goods and Services Increases with Specialization Because