In the real world, we don't observe countries completely specializing in the production of goods for which they have a comparative advantage.One reasons for this is
A)comparative advantage works better in theory than in practice.
B)because some countries also have an absolute advantage in the production of those goods.
C)tastes for many traded goods are similar in many countries because of globalization.
D)production of most goods involves increasing opportunity costs.

Question

Quizplus · Accepted Answer

Production of most goods involves increasing opportunity costs, which means that as a country produces more of a good, the opportunity cost of producing that good increases. Therefore, it becomes less efficient for a country to specialize completely in the production of one good, as the opportunity cost of producing that good becomes higher and higher. Additionally, other factors such as transportation costs, trade barriers, and differences in technology and resources also affect the degree to which countries specialize in certain goods.

In the Real World, We Don't Observe Countries Completely Specializing