ASSIGNMENT QUESTION B.docx - ASSIGNMENT INTRODUCTORY TO...

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ASSIGNMENT INTRODUCTORY TO ECONOMICS b) Explain the concept of specialization theoretically and its advantages relate it with the country of interest. (ZAFIRA) Explain inputs and outputs and link it to specialization (example resource constraint) (JASMINE) Specialization is a method of production whereby a nation or individual concentrates on the production of limited variety of products or services to gain greater degrees of productive efficiency. Many countries specialize in producing products and services that are native to their part of the world and they trade their products for other goods and services. This specialization is therefore the basis of global trade, as few countries have enough production capacity to be completely self-sustaining. The concept of specialization has a comparative advantage in the production of a good or service. A producer has a comparative advantage over another in the production of good or service if he or she can produce that product at a lower opportunity cost. When an economy can specialize in production, it can benefit from international trade. For example if Country A can produce apple at a lower cost than oranges, it can choose to specialize and

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