A High World Price For A Good C. Differing Consumer Tastes D. Diminishing Returns To A Variable Factor Of Production E. Differences In The Benefits That Consumers And Producers Get From The Exchange Of Goods And Services Some countries produce more goods than their own requirement. The outcome of international specialization and trade is equivalent to a nation having more and/or better resources or discovering improved production techniques. Specialization is a method of production whereby an entity focuses on the production of a limited scope of goods to gain a greater degree of efficiency. Germany can produce one watch for every 100 pounds of cheese it produces. But Country A has a comparative advantage in the production of good X. Specialization according to comparative advantage results in a more efficient allocation of world resources. Which of the following is not a reason for international specialization? Specialization, in economic terms, means focusing on one task rather than multiple tasks, which allows workers to perfect that one task. Larger outputs of both products become available to both nations. Vertical specialization refers to international specialization in different production stages in the same industry. 3. However, free trade is not observed at a global scale despite that. c. the differences in opportunity costs between countries are small. Specialization can be something that is within a single country’s economy or within the international trade economy as a whole. b. trade does not increase the total value of goods and services produced by a nation. They sell this surplus production in other countries and they avoid the occurrences of deflationary pressures in the domestic economy. Surplus production: International specialization enables every country to dispose off its surplus production. It is 9/10ths as efficient at producing good X but it is only 3/5ths as efficient at producing good Y. Comparative advantage exists when a country has lower opportunity cost, i.e., it gives up less of one … Instead countries adopt trade policies to restrict imports and promote exports to other countries. “And our natural urge for specialization is also one of the main reasons why professional services exist. Disadvantages of international specialization: Structural unemployment: even though national level specialisation usually creates more jobs, there is a risk that certain types of structural unemployment might occur. As the country moves towards specialisation, the workers in … d. not everyone benefits from trade. This is a basic concept of learning. links worldwide, vertical specialization is becoming the new type of intra-industry division. For example Italians export olive oil, France exports wine, ect. 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