National Specialization Boosts Efficiency Through Scale

Steps:

• Identify the question: Focus on advantages of national-level specialization in production.
• Recall specialization: Countries focus on goods they produce efficiently, trading for others.
• Link to economics: Specialization increases output volume, enabling cost reductions.
• Evaluate options: Select the one describing a benefit, not a drawback.

Why D is correct:

• Economies of scale define lower average costs from higher production volumes, as fixed costs spread over more units (e.g., Average Cost = Total Cost / Quantity).

Why the others are wrong:

• A: Creates reliance on imports, increasing vulnerability to supply disruptions.
• B: Exposes the firm to international rivals, potentially eroding market share.
• C: Accelerates resource use in the specialized sector, leading to environmental strain.

Final answer: D