Specialization and trade are beneficial to society because:
A) the output of economic goods may be increased with no increase in resources.
B) scarce resources are utilized more efficiently.
C) a division of labor lowers prices for products.
D) all of the above are correct.

Question

Quizplus · Accepted Answer

Specialization allows individuals and firms to produce more goods and services with lower costs and greater efficiency, which leads to an increase in output without an increase in resources (A). By focusing on producing goods and services that best match their resources and skills, individuals and firms can use scarce resources more efficiently (B). Additionally, a division of labor enables economies of scale, which result in lower prices for products (C). Therefore, all three statements are correct, making option D the correct answer.

Specialization and Trade Are Beneficial to Society Because