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.

Comparative advantage allows country's to produce goods for themselves as much as possible without relying on other countries not explain why comparative advantage is used in determining specialization.

Option: B

Explanation:

In determining specialization comparative advantage plays a vital role. Study of comparative advantage means a comparison between the quality, price of the product. Which commodity has these two mentioned advantage over other commodity hold the market at peak point and earn specialization for determining the flow of pattern.

By using this theory economist determine which nation is best to fit this product on the basis of favorable condition. To gain full control over the production of a particular product one must have knowledge about the factors which influencing at its best in production of that product.

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