Most trading nations do not completely specialize. Incomplete specialization is mainly due to:
A) decreasing opportunity costs.
B) increasing opportunity costs.
C) constant opportunity costs.
D) perfectly substitutable resources.

Question

Quizplus · Accepted Answer

Incomplete specialization is mainly due to increasing opportunity costs. As a country specializes in a particular product, the opportunity cost of producing that product increases due to the increasing value of the resources required to produce it. This makes it less efficient to continue specializing in that product and leads to incomplete specialization.

Most Trading Nations Do Not Completely Specialize