Specialization of labour led to greater efficiency in the allocation of resources because of
A)the opportunity cost of labour increased.
B)the principle of comparative advantage.
C)an increase in total work effort.
D)greater reliance on self- sufficiency.
E)the use of barter.

Question

Quizplus · Accepted Answer

The principle of comparative advantage states that individuals or countries should specialize in producing goods or services for which they have the lowest opportunity cost, and trade with others to obtain goods or services for which they have a higher opportunity cost. Specialization of labor allows individuals to produce more efficiently which in turn results in greater productivity and lower opportunity cost. Thus, specialization of labor leads to greater efficiency in the allocation of resources because of the principle of comparative advantage. Therefore, option B is the correct choice.

Specialization of Labour Led to Greater Efficiency in the Allocation