Answer:
Specialized economies use resources more efficiently.
Explanation:
Factors of production can be defined as the fundamental building blocks used by individuals or business firms for the manufacturing of finished goods and services in order to meet the unending needs and requirements of their customers.
The four factors of production are;
I. Land: this refers to the natural resources and raw materials extracted from the ground or grown in the soil e.g oil, gold, rubber, cocoa, etc.
II. Labor (working): this is the human capital or workers who are saddled with the responsibility of overseeing and managing all the aspects of production.
III. Capital resources: it includes the physical assets used for production of goods and services such as equipment, money, plant, etc.
IV. Entrepreneurship: it is intellectual capacity required to drive a business and the skills to develop an idea into a money making venture (business).
It is important for nations to economically specialize because specialized economies use resources more efficiently in the production of goods and services, so as to have a comparative advantage.
Comparative advantage in economics is the ability of an individual or country to produce a specific good or service at a lower opportunity cost better than another individual or country.
The comparative advantage gives a country a stronger sales margin than their competitors as they are able to sell their specific products or render their peculiar services at a lower opportunity cost.
