The problem of increasing costs from specialization puts limits on the gains from trade.

Name: The problem of increasing costs from specialization puts limits on the gains from trade.
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Question

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Specialization can lead to increasing costs as resources are shifted from producing one good to producing another. This limits the gains from trade because as the costs of specialization increase, the price that a country can charge for its specialized goods may also increase, reducing the potential benefits of trade.

The Problem of Increasing Costs from Specialization Puts Limits on the Gains