Question

Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. In this case, the country that produces corn will produce

Answer 1

Answer:

Will specializes in producing corns.

Explanation:

The law of comparative advantage dictates that a country should only produce that good, in which its opportunity cost is lowest among its trade partner countries. In this way, that country will specialize in the way in producing that thing. In the long run, due to the specialization, the productivity level of that country will increase which might be inform of more skilled labor or the development of new technologies that increase the production output. The increased productivity due to specialization leads to the increased output for that nation.

In case of corn, the country might specialize in producing corn, and might develop more skilled labor and more value added products from corn to increase the economic output of the country.