The problem of increasing costs from specialization put limits on the gains from trade.

Name: The problem of increasing costs from specialization put limits on the gains from trade.
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Question

Quizplus · Accepted Answer

When economies specialize in producing goods and services that they have a comparative advantage in, there is an increase in efficiency and productivity. However, as specialization increases, so do the costs, which can ultimately limit the gains from trade. Thus, the statement is true.

The Problem of Increasing Costs from Specialization Put Limits on the Gains