Specialization will increase output when it is based on:

Question

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Specialization based on comparative advantage means that each individual or country specializes in producing the goods and services for which they have the lowest opportunity cost. This results in a more efficient allocation of resources and increased output overall. Specialization based on who can produce at the least comparative cost (A) is essentially the same as comparative advantage. Absolute advantage (B) is based on who can produce more of a good or service using the same amount of resources, which may not lead to the most efficient allocation of resources. Speed of production (C) is not necessarily indicative of efficiency or the best use of resources.

Specialization Will Increase Output When It Is Based On