Question

1.)How are the factors of production related to the need to specialize?

Answer 1

ANSWER:

1) The main factors of production, which are: Land, Capital, Labor, and Entrepreneurship. These factors of production are related to the need to specialize in a particular goods, because the opportunity cost of production determines how convenient it will be for an entrepreneur to specialize in that good. For instance: when the opportunity cost for producing a particular goods is low in a place, more people tends to specialize in such business.

2) Specialization; which is to master in a particular goods, is related to trade because, when more people specialize in a particular goods, it will reduce the price of such goods. And when less people specialize in a particular goods, it will make the goods scars, thereby increasing the price of the goods. This is in accordance to principles of economics which states that, increase in supply; decrease in price. Decrease in supply; increase in price.

3) The law of comparative advantage describes that a country will make more profit, if they export a particular goods, which cost of production is very low at the country, to a country where the cost of production is very high, and sell the goods at such country, to so many other countries.

This law helps the use of resources, as it will add more international value to the resources been used in production. Since this resources are low cost in a country, it will become high cost in another country where it is scars.