An isolated economy
A) is less likely than an easily accessible economy to take advantage of specialization.
B) is more likely than an easily accessible economy to take advantage of specialization.
C) is equally likely to take advantage of specialization when compared to an easily accessible economy.
D) would gain no advantage from specialization.
E) has easy access to large markets.

Question

Quizplus · Accepted Answer

An isolated economy is characterized by limited or no access to external markets, which means that it will have less exposure to new and different resources, products, and technologies. As a result, an isolated economy is less likely than an easily accessible economy to take advantage of specialization. Specialization involves allocating resources to the production of goods and services in which a country or region has a comparative advantage, which can lead to increased efficiency, productivity, and economic growth. In an isolated economy, however, it may be difficult to identify, develop, and exploit such advantages, and trade may be limited by transportation costs and other barriers.

An Isolated Economy