Because of the existence of comparative advantage, the total output of goods is higher when each producer
A) produces at the midpoint of its PPF.
B) produces many different goods.
C) specializes in the production of one good or a few goods.
D) makes both intermediate and final goods.

Question

Quizplus · Accepted Answer

Specializing in the production of one or a few goods allows producers to focus on producing those goods more efficiently, which leads to higher productivity and a higher total output of goods. This is the basis of comparative advantage, where countries specialize in the production of goods in which they have a lower opportunity cost, and then trade those goods with other countries to mutually benefit from the higher total output.

Because of the Existence of Comparative Advantage, the Total Output