Incomplete specialization may be caused by
A) increasing opportunity cost.
B) unrestricted trade.
C) constant opportunity cost.
D) decreasing opportunity cost.

Question

Quizplus · Accepted Answer

Incomplete specialization occurs when a country does not fully specialize in producing the goods and services that it is best suited to produce because of increasing opportunity cost. As a country produces more of a particular good, the opportunity cost of producing each additional unit of that good increases. This is due to the fact that resources are not always perfectly adaptable to different uses. Therefore, if a country specializes completely in producing a single good, it will eventually start to face increasing opportunity costs as it tries to produce more of that good.

Incomplete Specialization May Be Caused by