The productivity gains achieved by specialization are due to

Part 2
A.
lower opportunity costs from switching production from one good to another.
B.
comparative advantage.
C.
scarcity.
D.
absolute advantage.

2 answers

B. comparative advantage.

Did you know?

Did you know that the productivity gains achieved by specialization are mainly due to comparative advantage? Comparative advantage is the ability of an individual, business, or country to produce a particular good or service at a lower opportunity cost compared to others. By focusing on what they do best and trading with others who have different comparative advantages, individuals and businesses can increase their productivity and overall output. This concept helps optimize resources in the face of scarcity, where limited resources need to be allocated efficiently to meet various needs and wants. Absolute advantage, on the other hand, focuses on the ability to produce more of a good or service using the same amount of resources, which is not necessarily the main driver of productivity gains in specialization.