Specialization usually increases the output of a country; however effective specialization requires:
A)Everyone in the country producing the same thing
B)That workers have very similar skills
C)An effective low-cost means to exchange goods and services
D)A large stock of capital

Question

Quizplus · Accepted Answer

Specialization allows countries to produce goods and services at a lower cost, which increases their output and efficiency. However, for specialization to be effective, there needs to be a way to exchange these goods and services efficiently and at a low cost. This is why an effective low-cost means to exchange goods and services is necessary for specialization. Choices A and B are not true as everyone in the country producing the same thing or having similar skills would lead to a lack of diversity and potential market saturation. Choice D is also not true as specialization can occur on a small scale without a large amount of capital.

Specialization Usually Increases the Output of a Country; However Effective