Specialization in production and then trading with other countries
A)Change the mix of output for rich countries but not for poor countries.
B)Change the mix of output for each country and increase total world output.
C)Increase the standard of living for rich countries but not for poor countries.
D)Mean that every citizen in every country is better off.

Question

Quizplus · Accepted Answer

Specialization in production and then trading with other countries allows each country to focus on producing the goods and services in which they have a comparative advantage. This can lead to a change in the mix of output for each country and an increase in total world output. As a result, every citizen in every country has the potential to be better off. While this process may have a greater impact on rich countries initially, over time it can also benefit poorer countries by encouraging economic growth and job creation.

Specialization in Production and Then Trading with Other Countries