Compared with constant cost production, if production occurs under
Increasing cost conditions, it is MORE likely that countries will:
A)completely specialize.
B)incompletely specialize.
C)not engage in international trade.
D)trade with one another.

Question

Quizplus · Accepted Answer

When production occurs under increasing cost conditions, countries are less likely to completely specialize because the additional resources required to produce more units become more expensive. Incomplete specialization allows for countries to still trade and benefit from their comparative advantages while avoiding the higher costs associated with complete specialization. Therefore, it is more likely that countries will incompletely specialize rather than completely specialize or not engage in international trade.

Compared with Constant Cost Production, If Production Occurs Under