Specialization in production
A)raises productivity.
B)requires money.
C)stimulates exchange.
D)All of the responses are correct.

Question

Quizplus · Accepted Answer

Specialization in production allows individuals or firms to focus on producing goods or services in which they have a comparative advantage. This leads to an increase in productivity because they become more efficient and effective in producing those goods or services. However, specialization also requires investment in resources, including money and technology, to support and maintain the production process. Finally, specialization stimulates exchange because it encourages individuals or firms to trade goods or services they specialize in, which leads to more efficient allocation of resources and increases the overall level of consumption.

Specialization in Production