Patterns of Specialization and Trade Are Explained By

question 182

Multiple Choice

Patterns of specialization and trade are explained by:

• A) the principle of comparative advantage.
• B) the principle of absolute advantage.
• C) people's productivity.
• D) government control and regulation.

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Definitions:

Allocative Efficiency

A state of the economy where the distribution of resources among different uses is optimal, ensuring that the goods being produced are what consumers prefer the most.

Producing Output

The process of generating goods or services as the result of economic activity.

Additional Unit

The next unit of product or service that could be produced or acquired.

Decreasing-Cost Industry

An industry in which costs per unit of output decrease as the scale of production increases, often due to factors like improved technologies or economies of scale.