Question

How does specialization enable countries to trade with one another

Answer 1

Specialization focuses on the production of a limited scope of products and services in order to have vast degrees of efficiency in production. Many countries specialize in producing their native goods and services, then trade them for other goods and services to other countries. Specialization has a comparative advantage in the production of goods and services. Any business that specializes in production can benefit from international trade. For example, when a country produces apples at a lower price than bananas, it can choose to specialize in the production of apples to trade for bananas.