Question

Countries around the world specialize production, and trade with other countries based upon A) the overall size of the economy. B) the rate of inflation in the economy. C) the comparative advantage in production. D) the amount of capital available to produce products with.

Answer 1

Answer:

Explanation:

Your answer is option D

Answer 2

It is based upon the comparative advantage in production.

• The phenomenon is the total capacity of an economy to produce a certain item or service at a lower opportunity cost than its trade counterparts.
• Opportunity cost is a new consideration in the idea of this method when comparing various manufacturing possibilities.
• It is employed to describe how businesses, nations, or people may profit through trade.

For instance:

• If a nation excels in producing both cheese and candy, it can choose to allocate the appropriate amount of labour to each product.
• This nation has a comparative advantage in producing chocolate if it takes one hour of labour to make 12 units of cheese and one hour of labour to manufacture 24 units of candy.

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