Productivity rises more quickly when countries produce goods and services for which they have a natural talent.

Question

Quizplus · Accepted Answer

When countries specialize in goods and services for which they have a natural talent, they can produce them efficiently, leading to increased productivity. This is because they are using their resources (such as labor, capital, and land) more effectively, and can produce more output with the same level of inputs. On the other hand, if countries try to produce goods and services that are not well-suited to their resources or skills, they are likely to experience lower productivity and higher costs. Therefore, it is generally advantageous for countries to specialize in areas where they have a comparative advantage.

Productivity Rises More Quickly When Countries Produce Goods and Services