Specialization Quiz

Why do countries specialize in certain goods, then trade with others to get what they need?

• transportation costs are lower than they were a century ago

• Greater investment of capital goods increases productivity

• People have limited resources to satisfy unlimited wants

• Resources are not evenly distributed among countries

Country X manufactures a product better & at a lower cost than country Y. What should happen?

• Country X has solved the problem of scarcity

• Country Y should try to produce the same product

• Country X should discontinue making that product

• Country X should sell that product to Country Y

Nation A makes cars better than crops. Nation A buys food from nation B. What principle is this?

• Laws of Supply and Demand

• The Factors of Production

• Specialization

• Scarcity

Countries specialize in the production of limited # of goods. How does this encourage trade?

• It doesn't encourage trade, all countries produce whatever.

• A country cannot produce all of its needs so it specializes

• Countries have unlimited resources so they don't specialize

• Because Mr. Randa and Miss Elliott say so!

Specialization leads to _____

• Voluntary Exchange

• Private Property

• Price system

• Market Competition

Specialization increases efficiency by

• Increasing amount of labor

• Giving workers more breaks

• Allowing workers to become experts at one task

• Working employees longer hours