Question

When two countries decide to engage in specialization and exchange the advantage is: Group of answer choices Their production possibilities frontier will shift outward. They will be able to consume at a point outside their production possibilities frontier. They will be able to produce and consume at a point outside their production possibilities frontier. They will be able to produce at a point outside their production possibilities frontier.

Answer 1

Answer:

They will be able to consume at a point outside their production possibilities frontier.

Explanation:

The Production possibilities frontiers is a curve that shows the various combination of two goods a company can produce when all its resources are fully utilised.  

The PPC is concave to the origin. This means that as more quantities of a product is produced, the fewer resources it has available to produce another good. As a result, less of the other product would be produced. So, the opportunity cost of producing a good increase as more and more of that good is produced.  

Factors that cause the PPF to shift  

1. changes in technology.  

2. changes in available resources.  

3. changes in the labour force.  

A country engages in the specialisation of a good for which it has a comparative advantage in its production and purchases goods for which it has a comparative disadvantage in its production .

an advantage of specialisation is that it allows countries to consume goods for which its not efficient in its production. Thus it allows to consume unattainable goods given the resources of the country. As a result, they will be able to consume at a point outside their production possibilities frontier.