As the result of specialization and trade, according to the law of comparative advantage, total output will
A) decline because specialization is costly.
B) rise only when there is an accompanying decline in the total output of one's trading partners.
C) rise if a nation is a net exporter and fall if the nation is a net importer of goods and services.
D) increase since resources will be better directed toward their highest-valued use.

Question

Quizplus · Accepted Answer

Specialization and trade according to the law of comparative advantage allow resources to be allocated more efficiently, leading to an increase in total output as each nation focuses on producing goods where they have a comparative advantage.

As the Result of Specialization and Trade, According to the Law