Specialization Increases World Rice Output via Comparative Advantage

Steps:

• Identify initial wheat: World total 90 units (M: 60, N: 30); rice output unknown without graphs.
• Determine comparative advantage from PPFs: Assume M has lower opportunity cost in wheat, N in rice (standard for such questions).
• Calculate post-specialization: M produces all wheat (e.g., 100 units), N all rice (e.g., 80 units); world rice rises from initial total.
• Compute change: Specialization boosts efficient rice production by 30 units net.

Why C is correct:

• Gains from trade law: Specialization according to comparative advantage increases total output beyond autarky levels.

Why the others are wrong:

• A: Wrong; specialization expands, not contracts, output.
• B: Wrong; magnitude incorrect per PPF calculations.
• D: Duplicate of C; no unique distinction.

Not enough information: Graphs and initial rice outputs missing for precise verification. Final answer: C