CRP LULU

1. Which of the following does NOT explain why comparative advantage is used in determining specialization?

O

By using comparative advantage, we determine which nations are best fit to produce a specific product.

O

Comparative advantage allows country's to produce goods for themselves as much as possible without relying on other countries

O

By determining comparative advantage we find out who can produce goods by giving up the least.

O

Comparative advantage assures that the factors of production are used in the most efficient way possible.

Comparative advantage is used to determine specialization but it is not because Comparative advantage allows country's to produce goods for themselves as much as possible without relying on other countries.

Explanation:

Comparative advantage can only be employed in setting that is globalized and countries are seen as efficient or not efficient for certain products to be made and if not then other countries are chosen as more viable options.

Comparative advantage does allow countries to see what goods they can produce the best but it does not allow countries to produce goods for themselves as much as possible without relying on other countries. It is determined by the free market.