Specialising in the production of a good or service in which one has a comparative advantage enables a country to do all of the following except:
A)engage in mutually beneficial trade with other nations.
B)increase the variety of products that it can consume with no increase in resources.
C)consume a combination of goods that lies outside its own production possibility frontier.
D)produce a combination of goods that lies outside its own production possibility frontier.

Question

Quizplus · Accepted Answer

Specialising in a good or service in which a country has a comparative advantage will allow it to produce more of that good or service using the same amount of resources as before, thus increasing the total output and potentially allowing for mutually beneficial trade and increased consumption of a variety of goods. However, specialisation cannot allow a country to produce a combination of goods that lies outside its own production possibility frontier. This is because the production possibility frontier represents the maximum amount of a combination of goods that a country can produce with its available resources and technology. Specialisation can help a country move closer to its production possibility frontier, but it cannot enable it to produce beyond it. Therefore, D is the correct answer.

Specialising in the Production of a Good or Service in Which