Question
In: Economics
True or False? Because of specialization and trade, it is possible to produce some goods that...
True or False?
Because of specialization and trade, it is possible to produce some goods that would not otherwise exist.
Solutions
Expert Solution
- The statement is true.
- Specialization is the method of producing goods which are having lower oppurtunity cost. When a country can produce certain good on comparitive advantage than other goods, then the country should specialise in producing that good. For example, if a country's climate is suitable for producing orange rather than producing watermelons, then the country should produce oranges in a surplus basis. These surplus goods can be traded with other countries.
- Specialization utilizes the existing goods for trade and to earn maximum profits out of it. It produce goods which wouldn't be exist if specialization and trade were not there. For example, consider a new electronic device. There are chances that a company residing in one country depends on other countries for getting their needed raw matetrials. If specialization and trade were not there, then it wouldn't be possible to make the new product.
Rahul Sunny answered 1 year agoRelated Solutions
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Sri Lanka, using all her resources efficiently, can produce either
1,000 bags of rice OR 3,000 bags of tea. Let's also assume that,
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Here are some hypothetical numbers used to illustrate the ideas of trade-offs, specialization, and comparative advantage....
Here are some hypothetical numbers used to illustrate the ideas
of trade-offs, specialization, and comparative advantage. Assume
Sri Lanka, using all her resources efficiently, can produce either
1,000 bags of rice OR 3,000 bags of tea. Let's also assume that,
using all her resources efficiently, Kenya can produce either 1,000
bags of rice OR 1,000 bags of tea. Further, assume that the
countries have similar resource endowments and that, initially,
they are not trading with each other. Therefore, each of...
Here are some hypothetical numbers used to illustrate the ideas of trade-offs, specialization, and comparative advantage....
Here are some hypothetical numbers used to illustrate the ideas
of trade-offs, specialization, and comparative advantage. Assume
Sri Lanka, using all her resources efficiently, can produce either
1,000 bags of rice OR 3,000 bags of tea. Let's also assume that,
using all her resources efficiently, Kenya can produce either 1,000
bags of rice OR 1,000 bags of tea. Further, assume that the
countries have similar resource endowments and that, initially,
they are not trading with each other. Therefore, each of...
Here are some hypothetical numbers used to illustrate the ideas of trade-offs, specialization, and comparative advantage....
Here are some hypothetical numbers used to illustrate the ideas
of trade-offs, specialization, and comparative advantage. Assume
Sri Lanka, using all her resources efficiently, can produce either
1,000 bags of rice OR 3,000 bags of tea. Let's also assume that,
using all her resources efficiently, Kenya can produce either 1,000
bags of rice OR 1,000 bags of tea. Further, assume that the
countries have similar resource endowments and that, initially,
they are not trading with each other. Therefore, each of...
Here are some hypothetical numbers used to illustrate the ideas of trade-offs, specialization, and comparative advantage....
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of trade-offs, specialization, and comparative advantage. Assume
Sri Lanka, using all her resources efficiently, can produce either
1,000 bags of rice OR 3,000 bags of tea. Let's also assume that,
using all her resources efficiently, Kenya can produce either 1,000
bags of rice OR 1,000 bags of tea. Further, assume that the
countries have similar resource endowments and that, initially,
they are not trading with each other. Therefore, each of...
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