The figure given below represents the PPC in two nations

Question

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4
 
-Individuals, firms, and nations should specialize in those activities which have the highest marginal cost.

Quizplus · Accepted Answer

Individuals, firms, and nations should specialize in those activities which have the lowest marginal cost, not the highest. This is because specializing in activities with low marginal costs allows for the most efficient use of resources and will result in higher overall production and output.