Rather than have a global economy in which each country specializes entirely in

Question

Rather than have a global economy in which each country specializes entirely in what it produces most efficiently, most countries produce goods that they also import. (For example, the United States both produces and imports automobiles.) This can best be explained by the fact that:

Select one:

a. Market economies cannot trade efficiently with non-market economies.

b. Most countries use tariffs and quotas to restrict imports.

c. Most consumers prefer to buy imported goods.

d. As countries move toward specialization, opportunity costs change rather than remain constant.

Explanation / Answer

This could be best explained by the fact that as countries move towards specialization, opportunity cost change rather than remain constant.

So, the correct answer is an option (d).

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