Posted by Anonymous on .
In The Wealth of Nations, Adam Smith mentions that very good grapes could be grown in Scotland. However, growing high quality grapdes in Scotland would be about 30 times as expensive as purchasing grapes from foreign countries. Some nations are better than other at producing things due to the availablity of natural resouces and other factors. With which statement regarding single resource ad diversified economies would Adam Smith most likely agree?
-Nations should export as many different types of goods or services as possible.
-Nations should do their best to produce all goods locally, to minimize the risks associated with dependence on foreign goods.
-A nation should diversify when it can use its resources to produce goods and services more efficiently than other nations.
-Each nations should specialize in producing only the goods or services that it uses.
I those the third choice. I was also thinking about the first one.