Disadvantage of Economic Specialization

Steps:

• Specialization means countries focus on producing goods they make most efficiently, like palm oil for Malaysia and Indonesia.
• This boosts efficiency and trade but creates risks from over-reliance on one product.
• Evaluate options: advantages involve productivity and jobs; disadvantages involve vulnerabilities like trade dependence.
• Identify C as the clear drawback, as others describe benefits or unrelated effects.

Why C is correct:

• Specialization fosters comparative advantage but increases interdependence, requiring trade for diverse goods (per Ricardo's theory of comparative advantage).

Why the others are wrong:

• A: Describes an advantage of efficient resource allocation.
• B: Highlights a benefit through expanded employment.
• D: Reflects market dynamics, not a direct specialization risk.

Final answer: C