In The Wealth of Nations, Adam Smith mentions that very good grapes could be grown in Scotland. However, growing high quality grapes in Scotland would be about 30 times as expensive as purchasing grapes from foreign countries. Some nations are better than others at producing things due to the availability of natural resources and other factors.

With which statement regarding single resource and diversified economies would Adam Smith most likely agree?

Question

Social Studies

Livia Goodwin

30 December, 02:48

In The Wealth of Nations, Adam Smith mentions that very good grapes could be grown in Scotland. However, growing high quality grapes in Scotland would be about 30 times as expensive as purchasing grapes from foreign countries. Some nations are better than others at producing things due to the availability of natural resources and other factors.

With which statement regarding single resource and diversified economies would Adam Smith most likely agree?

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Damien Arias · Answer 1

In the Wealth of Nations, Adam Smith makes the case for comparative advantage or the production of goods by nations or peoples which they are best at and trading for the goods with a higher opportunity cost. Therefore, he would say that a nation should diversity when it can to use its resources to produce goods and services more efficiently than other nations and also that nations should export and import as many different types of goods as possible.