Specialization and trade between individuals or between nations leads to

Question

Quizplus · Accepted Answer

Specialization and trade allow individuals or nations to focus on producing goods or services in which they have a comparative advantage, which leads to higher total output. This is because each person or nation can produce the goods or services at a lower opportunity cost, which means they are using their resources more efficiently. This leads to a higher level of productivity and economic growth. Self-sufficiency, on the other hand, limits the ability to take advantage of economies of scale and comparative advantage, leading to lower total output. Higher product prices may occur in the short term due to the costs of specialization and trade, but in the long term, competition and efficiency lead to lower prices.

Specialization and Trade Between Individuals or Between Nations Leads to